Saturday, December 05, 2015

Judge: Housing Authority Requirement That Section 8 Tenant Obtain Legal Guardianship Over Minor Niece To Qualify Her As Authorized Household Member Or Risk Rent Subsidy Reduction "Impermissibly Discriminates Against Non-Nuclear Families" In Violation Of Fair Housing Act

In Las Vegas, Nevada, the Las Vegas Sun reports:
  • A federal court struck down a policy [] that required grandparents and other caretakers to obtain legal guardianship of minors living in federally-subsidized housing.

    The Southern Nevada Regional Housing Authority previously required that caretakers be the legal guardians of children living with them in federally-subsidized housing. If not, the caretaker’s housing would be jeopardized.

    District Court Judge James Mahan called the housing authority’s policy “discriminatory on its face” and ruled that it violated federal law. Mahan said in the opinion that “this requirement impermissibly discriminates against non-nuclear families(.)”(1)

    Nevada Legal Services,(2) which represented plaintiff Antoria Pickens in the case, sued the housing authority in February, alleging that the policy violated the Fair Housing Act. Pickens had added a minor to her household as her temporary guardian — with the permission of the minor’s out-of-state, court-appointed guardian — but had not obtained legal guardianship. In August 2014, the housing authority removed the minor from Pickens’ household and her federal housing subsidy was reduced [Editor's Note: The housing authority adjusted Pickens' subsidy from a three-bedroom unit to a two-bedroom unit, clipping her subsidy by $72/month].

    The reality is that a significant number of low-income households feature children who are living with grandparents or aunts and uncles,” said Ron Sung, an attorney for Nevada Legal Services. “SNRHA’s policy of threatening to terminate these families unless they obtain a court-ordered guardianship essentially forced families to go through a time-consuming and potentially expensive court process that might ultimately affect the ability of these children to later reunite with their parents.”
Source: Court strikes down public housing provision discriminating against non-nuclear families.

See also, Court: Housing Authority rule on child residency is unconstitutional:
  • [P]ickens' minor niece was removed from her household earlier this year because Pickens had not obtained the court-ordered guardianship required by the authority, although she had written permission from the minor's legal custodian for the girl to live with her.

    "The court finds that the housing authority's requirement for temporary guardians to obtain court-ordered guardianship imposes an additional burden on non-nuclear families than on nuclear families," according to court records filed last [month].
(1) Pickens v. Southern Nevada Regional Housing Authority, Case No. 2:15-cv-00203-JCM-GWF (D.Nev. November 4, 2015).

(2) Nevada Legal Services is a non-profit statewide organization providing free legal assistance to low-income Nevadans, serving all seventeen counties through offices located in Las Vegas, Reno, Elko, Yerington, and an outreach office in Carson City.

Sexual Harassment & The Fair Housing Act

From the Department of Housing & Urban Development:
  • A home should be a refuge and a place of comfort. But for many women their landlords are a source of fear, demanding sexual favors along with rent money. This kind of sexual harassment isn’t often in the news cycle but it happens routinely, just below the radar, and it’s one of the subjects of a new rule from the U.S. Department of Housing and Urban Development (HUD) to protect the most vulnerable women from predatory landlords or others.
    Even though [] victims may know what happened is wrong, they may not know they have recourse. That is why HUD’s announcement of a proposed rule that would spell out the standards for assessing claims of harassment under the Fair Housing Act is so important.

    HUD’s proposed rule, “Quid Pro Quo and Hostile Environment Harassment and Liability for Discriminatory Housing Practices under the Fair Housing Act,” would define and provide illustrations of two types of harassment claims: (1) quid pro quo harassment, and (2) hostile environment harassment.

    Quid Pro Quo Harassment includes subjecting a person to an unwelcome request or demand and relating that to the person’s housing. For example, an employee of a homeless shelter might request sexual favors from female shelter residents as a condition of staying at the shelter, or a manager of rental properties conditions the rent amount on whether female tenants grant sexual favors.

    Hostile Environment Harassment includes subjecting a person to unwelcome conduct that is sufficiently severe or pervasive such that it interferes with or deprives the person the right to use and enjoy their home. For example, the owner of a rental home enters a tenant’s unit and makes unwelcome sexual advances, or if a landlord allows harassment of a tenant with disabilities, as in a recent Wisconsin case for which HUD charged Wisconsin landlords.(1) Race- and national origin-based harassment is also covered, including, for example, neighbors who create a hostile environment for an African-American family that moves into the neighborhood.

    Absent any standards set by HUD, courts have often applied employment discrimination standards first adopted under Title VII to evaluate claims of harassment under the Fair Housing Act. But given the differences between harassment in the workplace and harassment in one’s home, these workplace standards are not always the most suitable.

    When harassment happens in the workplace, the victim can escape to his home. In contrast, when harassment happens at home, the victim has no escape short of moving or staying away from the home – neither of which should be required.

    This rule is simple: no one should be subject to harassment and especially not in your house, which should be your sanctuary. Please contact HUD if any of these examples sound familiar, or file a fair housing complaint based on harassment: (800) 669-9777.
For more, see New housing rule protects most vulnerable women from sexual harassment in their home.

See also, HUD Proposes Rule To Clarify Protections For Victims Of Harassment In Housing (Rule would formalize standards for bringing harassment claims under the Fair Housing Act).
(1) For more on Hostile Environment Harassment, see New HUD Guidance on Sexual Harassment in Public Housing:
  • While “quid pro quo” is pretty easy to recognize, one’s understanding of hostile environment may benefit from more specific examples, drawn from cases and tenant reports.

    Abusive language/bullying. A male landlord berates female tenant for being late on rent using gender-specific terms and a loud voice and menacing manner, in front of neighbors.

    Abuse of entry. A maintenance man (allegedly) knocks and then, without waiting, keys himself into a female tenant’s apartment finding her in her nightclothes. In another case, a maintenance man only comes to make repairs between 2:30 PM and 4 PM, when teenage daughters are home alone.

    Voyeurism/stalking. A maintenance man hovers outside female tenant’s ground floor window on the pretext of “doing an inspection” of the gutters by her unit. Later, he’s seen hanging around same tenant’s unit entry door after working hours.

    Intrusive inspection. Property owner rifles through female tenant’s lingerie drawers as a part of a “housekeeping” inspection.

    Banned guests. Female tenant threatened with eviction because her former boyfriend was caught trying to break into her apartment.

    Nuisance call evictions. A landlord evicts a female tenant after being advised by local police that the tenant was making too many calls for help.

NYC Building Super Pinched For Burglary As A Sexually Motivated Felony For Sneaking Into Female Tenant's Unoccupied Apartment, Then Sniffing & Swiping Her Undergarments; Alleged Panty Raider Bagged By Smartphone App Loaded On Hidden iPhone Video Camera Planted In Residence; Victim's Lawyer Plans Civil Lawsuit Against Landlord, Managing Agent

In New York City, the New York Post reports:
  • A Manhattan financial analyst went undercover to find out what was happening to her underwear — and nabbed her apartment building’s super by using a hidden smartphone camera to record him sneaking into her pad and then sniffing and swiping her lingerie.

    Disturbing surveillance video captured via an iPhone app allegedly shows José Cedillo, 32, furtively enter Ashley Chase’s East 55th Street apartment on Sept. 4 and flip on the lights.

    After disappearing from view for about six minutes, Cedillo reappears — holding a pair of Chase’s Victoria’s Secret underwear to his face and taking a deep whiff, she says.

    “I don’t want to think what he was doing, but everyone has theories — and I’m sure not good,” Chase told The Post.

    Chase first suspected something strange was happening inside her $1,875-a-month, fifth-floor studio when she returned from a Labor Day trip to the Hamptons last year and couldn’t find a purple lace bra.

    As time passed, a series of undergarments disappeared, including a black-and-gold bikini top, a tan bra and at least three pairs of panties.

    “I also realized at that point that underwear I had worn that weekend that were in the dirty hamper were missing,” she said, describing the moment in July when she put the pieces together.

    Figuring it was an inside job, Chase borrowed an old iPhone from her sister and installed an app called Presence, which automatically activates the phone’s video camera whenever it detects motion. She then hid the phone on an end table with a view of the front door.

    On Sept. 4, she was headed to Montauk for the Labor Day weekend when she rode down in the elevator with Cedillo. About 10 minutes later, she got an alert that the hidden camera had been activated.

    “He saw me leave, he saw me with my bag, and he knew I was heading out,” she concluded after viewing the video clip.

    Chase, 26, called the cops, and Cedillo was busted for burglary as a sexually motivated felony and petit larceny.

    Papers filed in Manhattan Supreme Court say he copped to the panty raid, admitting: “I went in today to look around. I took a pair of panties. I left, I went downstairs, I sniffed them, and I threw them in the garbage.”

    The creep super added, “I went in another time a few months ago. I don’t remember when.”

    Chase’s lawyer, Benedict Morelli, said, “We already got [Cedillo], and he’s going to jail,” but said Chase also plans to file suit Monday in Manhattan Supreme Court against Cedillo, landlords Vito and Michael Sacchetti and building manager TMS Management.(1)

    Neither the Sacchettis nor TMS Management returned phone messages.

    Cedillo — who’s free on $50,000 bond — couldn’t be reached. His lawyer, Theodore Herlich, declined to comment.
Source: I caught my super sniffing my underwear, swiping my lingerie!
(1) Among other causes of action in a civil lawsuit, the tenant may have a viable claim for sexual harassment discrimination in violation of the Fair Housing Act. See generally, Sexual Harassment & The Fair Housing Act.

Friday, December 04, 2015

Hundreds Who Spent Ten$ Of Thousand$ Buying Into The Trump Brand In Fort Lauderdale Luxury Beachfront Condo Left Holding The Bag After Real Estate Mogul Removes Name From Project

Foreign Policy magazine reports:
  • On Nov. 5, 2013, surrounded by a crowd of attorneys, court officials, and four would-be condo buyers, Donald Trump sat down in a conference room in his flagship Fifth Avenue building and began to tell his version of a real estate deal gone awry.

    Trump had licensed his name to a luxury condominium project in Fort Lauderdale, Florida, but the building was never completed and those who had put down deposits, ranging from $85,000 to $500,000, wanted their money back. More than 100 of them would file suit, with the largest group — which swelled to 81 people as it neared trial — suing for $7.8 million. By the time Trump sat down for his deposition, the other defendants in the lawsuits, those who were the actual owners of the building, had settled for undisclosed terms. Trump, who hadn’t invested his own money in the project or overseen any of the construction, fought on. He was fighting for the Trump brand.

    “I’m in a unique position,” Trump testified when asked about licensing his name to buildings he didn’t own or develop himself. “I built up a great name, and the name is something that people like, and it has been very successful.”

    But the name alone was not enough in the case of the Trump International Hotel and Tower, Fort Lauderdale, a 24-story, 298-room beachfront property designed by architect Michael Graves, known for buildings like the Denver Public Library, as well as the line of consumer products he designed for retailers like Target and J.C. Penney.

    No one disputed that the project had ended in failure, with the luxury building never even completed. Plagued by delays in financing, construction, and budgeting, it was ultimately sold in a foreclosure auction for $115 million, far less than the $200 million it cost to build. Would-be buyers didn’t get their money back. Trump’s name, the primary reason many of them had put down deposits in the first place, was removed from the project.

    As a presidential candidate, Trump stresses his track record as a winner. Based on his experience, he says, he’ll pick the best people for his cabinet and put the best people in place to solve foreign crises. He says he doesn’t disappoint people. But a condo deal that was a huge disappointment to hundreds of people who wanted to buy into the Trump brand raises questions about the people Trump picks — and the way he wins.
For more, see Teflon Don: How Trump Survived a Real Estate Deal Gone Bad (His investors lost money. A judge said he broke the rules. So how did the GOP front-runner come through a blizzard of lawsuits unscathed?).

Dead Landlord/Developer Haunting Tenants From The Grave? Recently-Discovered Substandard Structural Steel Used In Construction Results In Vacate Order For Pricey 20-Unit Residential Building; Dozens Get Immediate Boot, Leaving All Their Personal 'Stuff' Behind (Just In Time For The Holidays)

In Brooklyn, New York, the New York Post reports:
  • He’s dead and buried, but landlord Menachem Stark — whose list of enemies was so long that cops were scratching their heads to find a prime suspect in his 2014 murder — is still making life hell for tenants, The Post has learned.

    Occupants of all 20 units in a pricey Williamsburg apartment building have been left homeless for the holidays because Stark had hired contractors who did a shoddy job, causing the Buildings Department to issue an immediate vacate order [], records show.

    A notice left on the front door of 120 S. Fourth St. warned residents that the five-story building “has questionable structural integrity [because of] the installation of substandard structural steel columns, trusses, beams, welds.”

    One of around 50 displaced renters, Cristal Ledesma, 25, lamented the awful timing on Thursday. “It sucks. Why would they do this right before the holiday?” she said. “I’m really starting to get stressed.”

    Units range from studios to three-bedrooms and go for $4,200 to $5,300 a month, listings show.

    We all have stuff trapped in there, textbooks and computers and everything else,” said another tenant, Melissa Yamamoto. “I’m staying with my boyfriend. One of my roommates wasn’t so lucky. He left before we knew, so he’s going to come back and has no work clothes.”

    There was no word on when the tenants could return.

    Stark, whose suffocated and burned body was found in a dumpster in Long Island in January 2014, had many foes, a law enforcement source said. “Any number of people wanted to kill this guy,” the source said. Among them, according to those who knew Stark, were people to whom he owed money, business associates, tenants and stiffed contractors.

    Police arrested construction worker Kendall Felix, 26, who claimed Stark owed him money.

    The millionaire landlord and a partner bought the vacant lot at South Fourth Street and Bedford Avenue in 2006, records show. They were forced to sell the nearly completed building — which had more than 50 violations — in 2013 to Stark’s brother-in-law Abraham Bernat during a bankruptcy proceeding, records show.

    Bernat, 28, hung up on a reporter, and his management firm did not return calls.

    One resident said he wasn’t surprised that a building tied to Stark would be given a vacate order. “Every project he was involved with seemed to end up in the hole one way or another,” he said, declining to give his name. “Now it’s our turn to pay the price for his shady business practices.”

    The Red Cross has offered temporary assistance to the residents.

    Former resident Lindsay Freeman said management was disorganized, noting she got an evacuation notice even though she moved out a year ago. “It’s disgusting. New York is a hard enough place to get by, especially when you’re young and just starting out,” she said. “The building looks beautiful, but it’s all held together with paper clips and gum.

    “To exploit people like this you must literally have no soul.”

Impoverished Tenants In 220-Unit Skid Row Hotel File Suit Accusing New Landlord Of Intimidation Campaign To Drive Them Onto The Streets; Conversion To Market-Rate Housing Would Cost Landlord Thousand$ In Renter Relocation Fees & Million$ To Replace Lost Low-Income Units: Legal Aid Lawyers

In Los Angeles, California, the Los Angeles Times reports:
  • Tenants at a five-story residential hotel on skid row filed suit Monday accusing landlords of launching a campaign of harassment and intimidation to drive them out of the building.

    The lawsuit, filed in Los Angeles County Superior Court, accuses owner Kameron Segal and his management company, William Holdings, of allowing slum-like conditions, including roach and bedbug infestations and clogged toilets, to fester at the 220-unit Madison Hotel on 7th Street.

    The landlords canceled maid service and linen cleaning, quit supplying toilet paper and replacing light bulbs and closed off the lobby and TV room, the suit said. These amenities had long been included for residents, who live in single rooms and share common bathrooms.

    Several tenants accused the on-site manager of berating and threatening them with ouster if they complained, and of barging into their units without notice. Managers also barred organizers from Los Angeles Community Action Network, a skid row anti-poverty group, from entering the premises to talk to tenants, the suit said.

    A third of the residents have fled Madison Hotel because of the alleged intimidation, and there is some evidence that illegal renovations have begun,(1) the suit said.

    A woman who answered the phone at William Holdings offices on Sunset Boulevard in Hollywood declined to comment, saying the business had not been served with the lawsuit. The complaint says Segal bought the hotel in June, and William Holdings, a Segal company, manages it.

    Residential hotels are the housing of last resort for the city's most impoverished, the suit says, and city ordinances protect them from conversion to market housing without compensation.

    Madison Hotel residents pay $290 to $500 a month for single rooms and shared bathrooms. They include many older people and veterans who cannot compete in Los Angeles' overheated rental market, and could end up in the street if forced out of the hotel, lawyers said.

    Landlords would have to pay thousands of dollars in tenant relocation fees, and up to millions of dollars to replace lost low-income units, were they to apply to turn the hotel into market housing legally, lawyers said.

    Several tenants have complained of landlord violations to the city's Housing and Community Investment Department, but response has been slow, lawyers added.

    The complaint was brought by the Legal Aid Foundation of Los Angeles(2) and the Inner City Law Center(3) on behalf of 15 tenants and Cangress, the Los Angeles Community Action Network's parent group.

    It accuses Segal and his companies of violating fair housing and habitability laws and seeks monetary and punitive damages and attorney fees.
Source: Skid row tenants accuse landlord of trying to drive them out of building.
(1) Any renovation of a residential building built before 1978 that disturbs painted surfaces may be subject to environmental laws enforced by the U.S. Environmental Protection Agency, subject to EPA guidelines relating to lead-based paint removal, and may expose landlords to significant penalties for violations thereof.

(2) Legal Aid Foundation of Los Angeles provides civil legal services to poor and low-income people in Los Angeles County, California with five neighborhood offices, three Domestic Violence Clinics and four Self-Help Legal Access Centers.

(3) Inner City Law Center provides a wide variety of legal services focused mainly on housing and homelessness to low-income individuals and families. It is the only provider of legal services on Skid Row in downtown Los Angeles, California.

Code Violations Lead To Shut Down Of 16-Unit Building In Foreclosure, Leaving Most Residents Scrambling While Some Stay Put w/ Nowhere To Go

In Peoria, Illinois, WEEK-TV Channel 25 reports:
  • One week after Peoria code enforcement inspectors shut down a West Bluff apartment building, some residents are still living there. For some of them, getting help has not been easy.

    Charnell Malone was having trouble breathing when an ambulance rushed her from her apartment last Tuesday. Malone says trouble began when her landlord brought in a propane heater to kill bed bugs. "I asked that man not to turn that thing on me. I said, ‘Mr. Gil, you know I have lung spasms.’ You know what he told me--I said, ‘How hot it supposed to get?’ he said, ‘120 degrees.’ I said, ‘Mr. Gil, is you crazy?’ He was like, ‘naw,’" recounted Malone.

    Hours later, Peoria code enforcement inspectors shut the apartment building down due to numerous violations. Code enforcement inspectors found a bed bug infestation among other violations last week.

    Most of the 16 apartment building residents at the Roanoke Avenue apartment have moved out.

    The Bank of Farmington has started foreclosure proceedings against Johnson, but is also offering $250 cash to residents. “They're very concerned with the plight of residents; it's a very unfortunate situation," said Private Investigator Marcella Teplitz. “I believe almost everyone is out and there are several people who are experiencing difficulties in finding the kind of accommodations that may be necessary for their conditions,” Teplitz added.

    Malone, who has a disability, says she has no relatives in the area and--for now--is staying put inside the condemned building. "I'm just taking a chance until somebody can come and help me, ‘cause I can't move nothing around here. I can't move myself half the time,” added Malone.

    We tried to reach out to Johnson and his attorney, who showed up in Peoria County court Wednesday for a foreclosure hearing. The foreclosure hearing has been rescheduled for two weeks to give the landlord Gil Johnson adequate time for a response.

25-Unit Federally Financed Building Offering Low-Income Senior Citizen Housing Faces Foreclosure, Leaving Elderly Residents Wondering Whether Post-Holiday Rent Gouge Looms w/ New Landlord

In Skowhegan, Maine, reports:
  • For the last four years, Marjorie Whipple has called a small apartment in Springhouse Gardens on Silver Street her home. “We’re like family,” said Whipple, 77, of the residents in the low-income senior housing building. “We get together every day, whether it’s for coffee, to socialize or to play bingo twice a week.”

    She and other residents like the fact that the 25-apartment building is centrally located, close to stores and the hospital. They like living there.

    But lately many residents at Springhouse Gardens have been concerned about whether they’ll be able to stay at the building in the coming months. The apartment building, which is owned by Spring House Associates and managed by Portland-based Stanford Management, is for sale after a federal judge ruled to foreclose on the building in August.

    The foreclosure came after the U.S. government filed a complaint earlier this year alleging that Spring House was behind on property tax payments, had failed to maintain the building properly and was behind on loan payments to the U.S. Department of Agriculture, Rural Development and Rural Housing, according to court records filed in U.S. District Court. The loan, which the group entered into in 1984, helped fund the construction of the low-income senior living center in downtown Skowhegan.

    Spring House owes the U.S. government more than $1 million, according to the court records. There is also a lien on the building for $17,261 in overdue property taxes, according to the Somerset County Registry of Deeds.

    Residents said Tuesday that they received letters in the mail about two weeks ago, telling them the building was in foreclosure.

    The letter tells residents that they are eligible to be put on waiting lists for other housing financed by USDA’s Rural Development office. The U.S. government could buy the building and maintain it as low-income housing, but the letter also warns residents that if the Springhouse building is sold to another developer, there is no guarantee that low-income rent rates will stay the same.

    However, some residents could be eligible for vouchers from USDA to help them pay their rent, the letter states.

    A meeting also was held Tuesday in which representatives from the USDA and Stanford Management met with residents to discuss their options. The meeting was not open to the public and representatives from both groups were unavailable for comment afterward. According to the court records, Spring House owed the U.S. government $1.19 million in loan payments and late fees as of February, plus a daily interest rate of $320.

    A consent agreement issued Aug. 31 stated that Spring House had 90 days to settle the debt or the property would be put up for sale.

    Cathy Barton, a senior property manager for Stanford, would not comment on what options residents have and would not say whether residents in other buildings Stanford manages in Skowhegan should have cause for concern. The company manages three other properties in Skowhegan and numerous others in Maine and Pennsylvania.

    Cathy Witham, an area specialist for Rural Development also present at the meeting, did not return a call for comment Tuesday. Other representatives from Rural Development also did not return calls for comment.

    David Johnson, an attorney for Spring House, also did not respond to requests for comment Tuesday.

    “Everybody was devastated by this,” said Whipple, who pays $385 in rent each month. “It’s hard right before the holidays not knowing what’s going to happen.”

    She said residents are worried that they either will have to find new places to live or will see an increase in their rent.

    “Will (a new owner) maintain the rent? They could say no, they don’t want to do it,” Whipple said. “We also don’t know if we’ll be able to get vouchers that will continue from year to year.”

    Whipple and other residents, such as Carol Dorian and Lorraine Hoskins, said they like the fact that Springhouse Gardens is downtown, within walking distance of a grocery store, Wal-Mart and other amenities.

    “You can just zip up to the store or down to the hospital,” said 90-year-old Frances Spaulding. “The hospital is right down the road, so it’s convenient.”

    Spaulding has a monthly income that comes from Social Security and pension payments to her late husband. She said that if there is a rent increase, she thinks she would be able to pay it, but she wasn’t sure about other residents.

    “I probably could stay here, but a lot of people couldn’t, because they only get Social Security,” she said.

    Whipple is one of them. Aside from Social Security, she gets about $50 per month in food stamps, she said.

    “I don’t want to move. I’d really like to stay here,” she said. “This is my home.”
Source: As Skowhegan apartment building faces foreclosure, residents wonder where they’ll go (The owner of Springhouse Gardens, a Silver Street building for low-income seniors, owes more than $1 million to the U.S. government and thousands in taxes and is for sale).

Thursday, December 03, 2015

Bay State Banksters & Title Insurers Rejoice, Screwed Over Foreclosed Massachusetts Homeowners Lament As Governor Signs Bill That Clears So-Called "Ibanez Title Defects" To Homes Sold In Void Foreclosures Three Years After Sale

From the Bay State of Massachusetts, Banker & Tradesman reports:
  • Gov. Charlie Baker last week signed into law a bill that clears the title of previously foreclosed-upon properties, curing the so-called Ibanez defects after a period of three years.

    The law provides a three-year statute of limitations for borrowers to seek to regain title to their property after a foreclosure. The law also says that the affidavit of sale recorded with the foreclosure deed will be considered conclusive evidence of compliance with foreclosure statutes once it has been on record for three years.

    The law does not apply to borrowers currently challenging their foreclosures, nor does it prevent borrowers from raising defects during the three-year period.

    The law also does not prevent borrowers from suing lenders over defective foreclosures, even after the title has cleared. Borrowers who were foreclosed upon three or more years ago will still have a year to pursue claims against their foreclosing lender.

    Peter Wittenborg, executive director of the Real Estate Bar Association for Massachusetts, wrote a letter urging the governor to sign the bill into law last week and said his members were thrilled by the news of its passing.

    “This long-awaited legislation will help innumerable homeowners whose post-foreclosure residential real estate titles have been clouded by the SJC’s 2011 Ibanez v. U.S. Bank decision,” Wittenborg said [Editor's Note: What this hack conveniently leaves out it is that it really helps the title companies who issued insurance policies on these crappy real estate titles].

    In that decision, the Massachusetts SJC ruled that U.S. Bank’s foreclosure on Antonio Ibanez’s property was invalid. U.S. Bank had bought the mortgage from another lender and didn’t record it for more than a year after starting the foreclosure process.

    The SJC invalidated U.S. Bank’s foreclosure on Ibanez because it hadn’t recorded the mortgage and therefore wasn’t the legal mortgagor when the foreclosure commenced.

    Grace Ross, of the Massachusetts Alliance Against Predatory Lending, lobbied against the bill. She said instead of clearing property titles it will “muddy the waters.”

    The bill is the darling of the title insurance industry,” Ross said. “It purports to clear title. We’re still not convinced that it does. It doesn’t comport with any existing laws that clear title going back to the constitution.”

    Ross said the focus should be on repairing each individual title defect is repaired, not by simply declaring them repaired after three years. She also said the bill would disproportionately affect communities of people who were the targets of predatory lending in the first place.

    “The bill is discriminatory because we’re wiping out the money of communities of color and women heads of households,” Ross said. “This bill disparately denies them their right to justice.”

Director Of California Bar's Attorney Ripoff Reimbursement Fund: Great Deal Of Complaints Stem From 2008 Housing Crash & Lawyers Who Fleeced Homeowners In Foreclosure; $18 Million In Claims Applications Currently Pending, But Only $6 Million Available

In Hanford, California, The Sentinel reports:
  • “There are few things as dangerous to the public as a lawyer seduced by money, and instead of helping clients, rips them off,” Los Angeles-based attorney Lori Meloch firmly maintains.

    As director of the State Bar of California Client Security Fund,(1) she has seen — and helped to remedy — horribly tragic examples of lawyers gone bad. Today, a great deal of her work stems from the housing crash of 2008 and lawyers who amassed fortunes, victimizing people facing foreclosure.

    In the Great Recession, often out of a job and upside-down on what was owed on grotesquely overpriced homes they never should have been allowed to get into, “Homeowners paid thousands of dollars to law firms promising to obtain loan modifications or other forms of foreclosure relief, but doing absolutely nothing at all beyond taking money from desperate people,” Meloch points out.

    For a tale of several attorneys who took millions of dollars from clients, we recommend the Bloomberg Business in a Sept. 10 article, “Inside a Deeply Suspect Mortgage-Relief Operation in L.A.” The article focused on attorney Vito Torchia Jr., and his cronies at Irvine-based Brookstone Law Corporation.

    One of our readers, “Linda,” paid Torchia over $12,000 in 2012 to stop the foreclosure on a home when the payments were all current. She received nothing beyond a letter stating all the great things his firm would do for her.

    In May of this year, Torchia was declared ineligible to practice law after the State Bar filed a stomach-churning multi-count notice of disciplinary charges. “When lawyers are disciplined by the Bar, their cases are a public record and available on the California State Bar website. It is information that potential clients need to know,” Meloch underscores.

    Losing your license to practice law is one way lawyers who see Bar membership as a license to steal are dealt with. “But in many instances, the State Bar is able to compensate victims of dishonest lawyers through the Client Security Fund which more people need to know about,” Meloch told You and the Law.

    “To quality for compensation from the Client Security Fund, the loss of money or property must have been the result of the attorney’s dishonesty, but not because of incompetence or malpractice,” she explained.

    “You need to show that the money or property actually came into the lawyer’s possession. If you pay your lawyer in cash, always get a receipt, keep cancelled checks, copies of checks, bank statements, anything showing payment. Without it, we can’t help,” she stresses.

    We asked, “What are the types of dishonesty which could qualify for reimbursement from the Security Fund?” Meloch listed five basic categories:

    (1) Theft or embezzlement of money or property, for example, after settling a personal injury case, illegally keeping the client’s money;

    (2) Where the lawyer has been paid in advance, performed no services or an insignificant portion of services and fails to refund unearned fees;

    (3) Borrowing money from a client without the intention or knowingly lacking the ability to repay the money;

    (4) Obtaining money from a client representing that it will be used for investment purposes and no investment is ever made;

    (5) Intentionally engaging in any dishonest or fraudulent act which leads to the loss of the client’s money or property.

    The Client Security Fund is only able to consider a case after the lawyer has been through the attorney discipline system and a final decision is reached. Only after that finding–and the attorney is disciplined–can reimbursement from the Client Security Fund can be sought.

    “How long can it take?” we asked.

    We have to wait for the discipline to be final before the Client Security fund can proceed. It is not a quick process,” Meloch notes, “And after the discipline is final, it can take up to three years because of our funding limitations.

    “There’s an important time limit to be aware of. Victims must apply to the fund within four years of when they knew or should have known about the loss.”

    “When lawyers pay their yearly fees to the State Bar, $40 goes to support the fund. Right now, we have $18 million in applications, but only $6 million available, so it will take time to pay claims up to a maximum of $100,000 each one,” Meloch stated.

    The California State Bar website is an excellent source of information about filing a complaint against a lawyer or seeking reimbursement.
Source: Help for victims of dishonest lawyers.
(1) The State Bar of California's Client Security Fund was established to reimburse eligible clients who have suffered a loss due to misappropriation or embezzle­ment by a California-licensed attorney

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

See generally:
  • N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

    When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

    Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.

Report: State Contractors' Ripoff Reimbursement Fund Leaving Some Fleeced Homeowners Feeling Victimized Again

In Orlando, Florida, WPTV-TV Channel 9 reports:
  • A state recovery fund to help victims of bad contractors has left many homeowners feeling like victims all over again.

    Action 9 found dozens of claims from three years ago have never been paid, and the owners said they proved that they qualify for recovery money.

    Cynthia Brady discovered her new home's defective slab was sinking. The family sued the contractor and won a $50,000 settlement, but the contractor never paid.

    Brady sent a claim to Florida's Construction Recovery Fund,(1) which is supposed to cover some homeowner losses to bad contractors. Three years later, her claim is still pending.

    "I did not expect to be treated this way," said Brady. She said the Department of Business and Professional Regulation kept asking for documents it already had. "It was just one final insult after a series of hurts and insults," said Brady.

    Don Whittemore filed a $17,000 claim after his contractor walked off the job. He said there has not been an answer from the state since 2012. "It doesn't work. We don't know where the money's going, but we didn't see any of it," said Whittemore.

    Action 9 reviewed state records and found many bad-contractor victims have been fighting for recovery fund money for years. Ninety-four homeowners who filed claims in 2012 are still waiting, which is more than the 83 homeowners the state has paid.

    Attorney Paul SanGiovanni said he is not surprised by the delays and angry homeowners involving a state-run program.

    "The amount of funding to pay those claims is so small, the funding to pay the people to process these claims is so small, these people actually end up being victimized a second time," said SanGiovanni.

    Recovery fund money comes from a fraction of each permit fee, and the state says it has $5 million to pay out this year. Also, it says another dozen claims will be processed next month.

    "Did it protect you?" asked Action 9's Todd Ulrich.

    "No. It made it worse," replied Whittemore.

    Florida's Recovery Fund already cut back on what homeowners could recover. It reduced the top payout from $50,000 to $25,000. Five years ago, it dropped victims of bad roofers and pool contractors from the program.

    In a response, the department wrote: "Regarding the pending claims, it’s important to keep in mind that the timeframe for processing recovery fund claims depends on the circumstances of the claim and the amount of time it takes to receive all necessary documents from the claimant to complete the recovery fund claim file. There may be instances in which the claimant has not responded to requests for additional documentation, in which case the claim remains in the pending status. There is no longer a backlog of completed claims awaiting payment; the FAQs are in the process of being updated. At this time, once a claim file is completed, Recovery Fund staff submits the files to the next available Construction Industry Licensing Board meeting for review and possible approval."
Source: Action 9 investigates state recovery fund meant to help homeowners.
(1) For more on The Florida Homeowners’ Construction Recovery Fund, see Frequently Asked Questions.

Wednesday, December 02, 2015

Buffalo Sits On $11.6 Million (& Growing) Pot Of Unclaimed Cash Representing Surplus Funds From Tax Foreclosure Sales That Ex-Homeowners Are Entitled To But Unaware Of; One Unwitting Homeowner Can Claim Almost $150K; Two State Lawmakers Currently Conniving On Proposed Law To Snatch Proceeds On Behalf Of City If Loot Goes Unclaimed For Five Years

In Buffalo, New York, The Buffalo News reports:
  • There is an $11.6 million pot of money that could be divided among people whose properties were sold at Buffalo’s tax foreclosure auctions over the last five years.

    But the city never told these people that the money is there for them to claim.

    And two state lawmakers are now proposing legislation that would allow the city, not the former property owners, to keep this money.

    Once a year, properties in Buffalo are auctioned off when their owners fail to pay taxes. In recent years, these auction prices have skyrocketed, exceeding the tax debt owed. And when that happens, the excess money can be claimed by the foreclosed owners and any lienholders. But no one is telling them. The pot of money has accumulated to the tune of $11.6 million and stands to grow substantially when 2015’s excess proceeds are added next year.

    Thousands of former property owners have no idea about these funds. Right now, this money eventually ends up going to the state, though property owners still retain the right to file a claim. But State Sen. Timothy M. Kennedy, D-Buffalo, and Assemblyman Sean M. Ryan, D-Buffalo, as part of an initiative addressing urban blight and slumlords, are trying to pass legislation that would redirect the money to the city. What’s more, the former property owners would lose their right to claim the money once it’s sent to the city.

    The legislation has picked up the support of key Common Council members.

    If the bill passes, it could mean a windfall for the city’s weatherization and home-improvement program. Previous attempts to pass similar legislation since 2008 failed.

    But it also could mean hard-luck city residents such as Colleen Parker, who already lost her home in the tax lien sale last year, would lose their rights to claim funds. She was unaware – until The Buffalo News told her – that her former home netted a $92,742 surplus.

    “Why would the city not tell people or notify us in some way?” the 57-year-old woman asked. “The city doesn’t know the struggles we’re going through.”

    Parker is getting by on workers’ compensation and disability payments. “It’s already embarrassing and hurtful to lose something you’ve worked so hard for, and then for the city to sock you in the stomach again by not telling you about the money,” she said. “It’s a double whammy.”

    Warren Kubiak, 67, a retired corrections officer, is another former property owner with money to claim. He tried to sell his home on the market and had a buyer, so he got an apartment. But the buyer backed out at the last minute.

    “I couldn’t afford the house and the apartment,” he said.

    It was foreclosed last year and sold at auction, but he was not notified of the $45,333 surplus.

    The sale prices at auction have gone through the roof in recent years. Speculators, investors and immigrants seeking low-cost housing have turned the auction into a high-stakes event, with homes that would have gone for $5,000 in the past fetching $40,000 and more.

    In 2009, a slate of 826 properties sold for $4.6 million at the auction. Five years later, 808 properties yielded $9.2 million.

    After the properties are auctioned, the city withholds money for outstanding taxes, issues payments for county tax and utility liens, then deducts administrative and other fees. Whatever is left is transferred to the county comptroller, who handles all unclaimed funds in the county.

    “We almost serve as a minimal pass-through,” said Erie County Comptroller Stefan I. Mychajliw Jr. “We try our best to make sure that people recover the money that are due to them.”

    If the auction money is unclaimed for five years, it is turned over to the State Comptroller’s Office and becomes a part of the general fund. Even then, claims can still be made through the County Clerk’s Office.

    By law, the money belongs to the parties with recorded interest in the property – the former owners, lienholders and judgment creditors of all kinds. But the same law doesn’t require the city to tell these stakeholders.

    So it doesn’t.

    “We don’t notify formally as part of the process,” said Timothy A. Ball, the city’s corporation counsel. “If someone calls and asks, we will point them in the right direction. Our focus has been on helping people save these properties on the front end and providing mechanisms to avoid foreclosure.”

    Currently, $11.6 million sits in an escrow account – excess proceeds from the auctions held in 2009 to 2014 – from the sale of 1,211 properties.

    The average amount is $9,600. One former owner can claim almost $150,000.

    Only 11 percent, or $2.56 million, has been claimed for the sale of 153 properties out of 1,368 sold at auction since 2009.

    The city’s silence has nurtured a fertile market for “asset locator” companies that charge to unite people with unclaimed assets.

    “All of my clients learned about their surplus from solicitation letters they received from these downstate companies,” said Daria L. Pratcher, a local real estate attorney. “It seems that’s the way most people find out they are entitled to these funds.”

    But their finders’ fees often range from 15 percent to a third of the money.

    The Western New York Law Center(1) provides free assistance, but Paulette D. Cooke, a staff attorney, can only count three or four surplus clients over the last few years. “People just don’t know,” she said. “It’s unfortunate because in most cases, these are people who could really use the money.”

    The city might not be the only municipality mum about leftover money.

    Former suburban homeowners are missing out on almost $3 million in surplus funds from Erie County’s similar pot of money, and those funds also are tended by the comptroller and destined for Albany after five years.

    Mychajliw said he has considered creating a surplus database and will work with lawmakers to better notify foreclosed homeowners.

    And starting next year, city officials said the surplus information will be included in the six to eight foreclosure notices sent to homeowners.

    “We’re always looking to improve the process,” Ball said.

    Government officials are cautious about creating a false sense of hope or giving unscrupulous owners a profitable way to dump properties. Although 40 percent of auctioned properties yielded surpluses last year, the other 60 percent did not. Furthermore, the foreclosed owner is last in line for excess funds. Lienholders, such as banks and mortgage companies, and credit card companies holding judgments have first claim and could seek all of it, depending on the amount of the surplus and debt.

    Kennedy and Ryan have been at war with big banks behind the foreclosures on abandoned “zombie” homes, as well as slumlords and their dilapidated properties. But the rights of foreclosed owners could become collateral damage.

    Their first legislation calls for code violations on non-owner-occupied homes to become tax liens. If that property is foreclosed on, a second bill directs any excess proceeds from that sale and all sales at the auction to the city instead of the state.

    If that law passes next year, it would go into effect immediately. So surplus funds from the 2010 auction will be transferred to the city.

    “Rather than let this money continue to be swept up by bureaucratic Albany, our legislation would ensure that the funds would stay right here in Buffalo,” Kennedy said. “If unclaimed after five years, they would no longer be diverted to the Capitol, but instead would be directed towards the city’s Urban Renewal Agency, which focuses on helping responsible homeowners with weatherization, home repairs and community development.”

    The tandem legislation was announced and touted last May. Council President Darius G. Pridgen and members of Project Slumlord were on hand for the news conference. Lovejoy Council Member Richard A. Fontana drafted matching resolutions that were adopted in May by the Council.

    The city and Council members said they didn’t know the amount of the surplus. Pridgen said he was unaware of the city’s lack of notification to property owners but is committed to improving the process.

    The list abounds with city residents who fell on hard times. Job loss, divorce, bankruptcy or other changes in their financial situation led to foreclosure.

    Take Yvonne Young, who bought a fixer-upper on Connecticut Street for only $4,100. Repairs on the home were constant and beyond her budget, so Young, along with her two children, moved in with her then-boyfriend, who is now her husband.

    “As a single mother, it was hard trying to keep up,” she said. “I put so much money into that house and tried my best. But there was always something that needed to be fixed. And it just became too much. There was nothing I could do.”

    The house sold for $70,000 in 2012. The surplus she’s entitled to is about $64,000.

    “That’s incredible, so surreal,” Young said. “I can’t even speak. There’s so much I could do with that money. But I won’t believe it until I can actually get it.”
Source: $11.6 million left unclaimed from home auctions (Buffalo residents who have undergone tax foreclosures not told of surpluses).

See also: Homeowners hammered by foreclosure are also losing out on auction profits, where The Buffalo News editorial board calls for local government officials to make greater efforts to track down the unwitting homeowners who are unaware that, while they may have lost their home to foreclosure, they may have a pot of money awaiting them, a pot that constites the amount by which the auction sale price exceeded the amounts owed to the foreclosing entity (ie. the surplus funds, or sale overage).

The editorial board also effectively gives a "thumbs-down" on the idea that the local government should simply help themselves to the loot and use it for the city weatherization and home improvement program for low-income residents.
(1) Western New York Law Center is a non-profit law firm providing legal representation to low-income Western New Yorkers in civil matters.

Feds Sink Claws Into Illinois Landlord For Failure To Comply w/ Lead-Based Paint Disclosure Rules Before Renting Homes; Landlord Commits To Performing $308,000 In Abatement Work On His 50 Rental Homes After At Least 7 Young Kids Were Found w/ Elevated Blood Lead Levels

The Department of Housing & Urban Development recently announced:
  • The U.S. Department of Housing and Urban Development (HUD), the U.S. Attorney’s Office for the Northern District of Illinois, and the U.S. Environmental Protection Agency (EPA) [] announced a settlement with a Rockford, Illinois landlord to resolve a claim he failed to inform tenants, some with young children, that their homes may contain potentially dangerous lead.

    The agreement requires Dennis Hardesty to replace windows and clean up lead‑based paint hazards in 50 rental properties containing a total of 52 units (see attached list of properties). In addition to the $308,000 worth of lead abatement work, Hardesty agreed to pay $5,000 in penalties.

    According to the federal government, Hardesty violated the Federal Residential Lead-Based Paint Hazard Reduction Act (Residential Lead Act) by failing to inform tenants that their homes may contain potentially dangerous levels of lead.

    Winnebago County health department officials identified at least seven children with elevated blood lead levels in the properties Hardesty leased. Investigations by the health department identified lead‑based paint and lead-based paint hazards in the units. Going forward, Hardesty will ensure that he will provide information about lead‑based paint to tenants before they are obligated to sign any lease.

    The lead abatement work Hardesty will perform as a result of the settlement includes window replacement and abatement of all friction and impact surfaces, and clearance exams to make those units lead safe for families to rent and live in. HUD will provide ongoing monitoring of Hardesty’s implementation of the settlement agreement, and will share the results with its federal partners for possible further action.
    The settlement announced today represents the first joint Residential Lead Act enforcement action in Rockford. It was the result of intensive coordination among local health officials and federal investigators. HUD, EPA and the Department of Justice are continuing similar enforcement efforts around the nation.

    As a result of enforcement actions taken thus far, landlords have agreed to conduct lead-based paint hazard reduction in more than 187,000 apartments and to pay $1.5 million in civil penalties. In resolving these cases, landlords have committed to expend more than an estimated $31 million to address lead-based paint hazards in the affected units. In addition, over $700,000 has been provided by defendants to community-based projects to reduce lead poisoning.


    The Residential Lead Act is one of the primary federal enforcement tools to prevent lead poisoning in young children. The Lead Disclosure Rule requires home sellers and landlords of housing built before 1978 to disclose to purchasers and potential tenants knowledge of lead-based paint or lead-based paint hazards using a disclosure form [go here for Spanish version], signed by both parties, attached to the sales contract or lease containing the required lead warning statement, provide any available records or reports, and provide an EPA-approved “Protect Your Family From Lead in Your Home” information pamphlet. Sellers must also provide purchasers with an opportunity to conduct a lead-based paint inspection and/or risk assessment at the purchaser’s expense. Acceptable lead disclosure forms can be found at
For more, see U.S. Announces Settlement With Illinois Landlord For Failing To Disclose Potentially Dangerous Lead Hazards (52 apartments to become lead-safe under terms of the agreement).

Tuesday, December 01, 2015

Screwed Over But Undeterred By Erroneous Ruling In Foreclosure Case Involving Standing-Lacking Bankster & Knowledge-Lacking Florida Trial Judge, Justice-Seeking Pro Se Homeowner/Couple Score Win On Appeal!

  1. another standing-lacking bankster,
  2. another erroneous ruling by a Florida trial judge (the guilty party this time is a Walton County, Florida Circuit Court judge) in a foreclosure case,
  3. another appeals court reversal,
  4. lost promissory note,
  5. successor-in-interest failed to prove original plaintiff was entitled to enforce the note at the time possession was lost.
I think that's it.

For the court ruling, see Seidler v. Wells Fargo Bank, N.A., No. 1D14-2569 (Fla. 1st DCA Nov. 12, 2015) (reversed).

Oh, and by the way, the homeowners represented themselves in court, at least on their appeal.

Salesperson For Outfit That Screwed Over 4,000 Homeowners Peddling Bogus Loan Modifications Gets Six Years & Ordered To Pay Back $6M+, Joining Several Other Confederates Earning Prison Stays For Roles In Nationwide Mortgage Relief Racket

From the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP):
  • Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced that Michael Lewis Parker, of Pomona, Calif., who worked at a Rancho Cucamonga, Calif. based business that offered bogus loan modifications was sentenced in California [] to serve a federal prison term of six years, and to pay restitution of over $6 million.

    “Michael Lewis Parker, as a 21st Century salesman, lured in distressed homeowners with a money-back guarantee and by convincing them that the company employed a team of lawyers who would ensure a successful mortgage modification,” said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

    “Parker and his co-conspirators used a variety of means to deceive homeowners and string homeowners along, including filing for bankruptcy, charging legal fees for services not performed, collecting mortgage payments that were never provided to lenders, and directing homeowners to cease communications with their lender. Claiming to be associated with a loan modification program sponsored by the U. S. government, Parker and others defrauded over 4,000 homeowners, many of whom ultimately lost homes to foreclosure, out of more than $7 million. It is fitting that these criminals will serve time in federal prison and will have ample opportunity to reflect on the pain and suffering inflicted on so many innocent citizens already strained by the financial crisis.

    SIGTARP stands united with our law enforcement partners to stop all TARP-bailout related crime.”

    21st Century

    A total of 11 defendants linked to 21st Century have been convicted of federal charges involving fraud against more than 4,000 homeowners across the nation, many of whom lost their homes to foreclosure.

    Previously, Christopher George, a co-owner of 21st Century, was sentenced to 20 years in federal prison; Crystal Buck, a sales “closer” who persuaded numerous victims to pay fees to 21st Century received a sentence of five years; Albert DiRoberto, handled sales and marketing – which included making a commercial for 21st Century and preparing talking points to respond to negative publicity – was sentenced to five years in prison;, Yadira Padilla, who handled client complaints and refund requests, and who posted bogus reviews of the company on the internet – was sentenced to four years in prison, and Michael Bates, a sales employee for the company was sentenced to one year and one day in prison.

Co-Owner Of Southern California Outfit That Ran Nationwide Loan Modification Racket Gets 10+ Years, Ordered To Pay $1.4 Million In Restitution

From the Office of the U.S. Attorney (South Bend, Indiana):
  • United States Attorney for the Northern District of Indiana, David Capp, announced that Brian M. Kandefer, age 37, of San Diego, California, was sentenced [...] after his guilty plea of wire fraud and money laundering.

    Brian Kandefer was sentenced to 121 months imprisonment and ordered to pay $1.4 million dollars in restitution.

    According to documents in the case, K2 Capital Management Inc. did business as US Mortgage Bailout and with physical offices located in La Jolla, California. Brian Kandefer was a 50% owner of K2 Capital Management Inc. dba US Mortgage Bailout and dba (hereafter "US Mortgage Bailout").

    US Mortgage Bailout purported to be and advertised as mortgage "loan experts" which had "helped thousands of homeowners avoid foreclosure." US Mortgage Bailout sold mortgage loan modification products and services to persons, located all over the United States, including the Northern District of Indiana, who were in trouble with their home mortgage loans.

    As part of the fraud scheme that lasted from 2009 through 2010, US Mortgage Bailout which included Kandefer, used false advertising to defraud clients (victims) out of monies for loan modifications. They also did not properly communicate or represent client interests in the scheme. If they did represent clients for loan modifications, documentation was falsified regarding income and other financials. US Mortgage Bailout had a 100% refund policy for clients who did not receive favorable outcomes, yet clients did not receive any refunds despite requests.
Source: Brian Kandefer Sentenced To 121 Months Imprisonment (Ordered to Pay $1.4 Million in Restitution).

Monday, November 30, 2015

Probe Into Northern California Foreclosure Sale Bid Rigging Racket Hitting A Bump In The Road? Defandants' Lawyers Accuse Sneaky Feds Of Planting Bugs Inside Metal Sprinkler Box, Planter Box & Vehicles Parked On Street Near Courthouse Entrance

In San Francisco, California, The Recorder reports:
  • You might want to watch what you say on your way in and out of court.

    According to court papers filed [two weeks ago], federal agents placed secret recording devices in at least three locations around the entrance to the San Mateo County courthouse in Redwood City without first getting judicial approval.

    The courthouse bugs were used in 2009 and 2010 to investigate bid-rigging at public foreclosure auctions. Their existence surfaced in a motion from defense lawyers for a group of five real estate investors accused of colluding to deflate prices at the auctions, which were held on the courthouse steps.

    The defense lawyers, led by Latham & Watkins partners Daniel Wall and Ashley Bauer, are asking U.S. District Judge Charles Breyer to suppress more than 200 hours of recorded conversations and all evidence gained from them. They maintain that their clients had a reasonable expectation of privacy when they gathered to speak in hushed voices away from other auction participants.

    "Imagine, as a judge, if you find out that the stairs that you walk up and down all the time are bugged," said Doron Weinberg, one of the defense lawyers on the case. "We believe that Judge Breyer will take the issue seriously and we have confidence that he'll make a wise decision."

    The San Mateo County case is part of a sweeping antitrust sting by federal prosecutors in the Northern District of California targeting real estate investors who allegedly conspired to manipulate public auctions during the height of the foreclosure crisis. Prosecutors have secured more than 50 guilty pleas in similar cases springing from auctions in Alameda, Contra Costa, San Francisco and San Mateo counties.

    According to Weinberg, Louis Feuchtbaum at Sideman & Bancroft figured out that the recordings were not made by federal agents or informants wearing body microphones—something that the defense contends would have been allowable. "Lou began to realize that these were not consensual overhearings," Weinberg said. "They were somehow being recorded by an outside force."

    The defense motion claims that beginning in December 2009 government agents planted microphones in three locations near the entrance of the courthouse at 401 Marshall Street in Redwood City: inside a metal sprinkler box attached to the wall, in a large planter box and in vehicles parked on the street. The hidden microphones were activated at least 31 times through September 2010, according to the filing.

    The only authorization came from attorneys working for the FBI and Antitrust Division of the U.S. Department of Justice, the motion states.

    "The government apparently decided that it could record all conversations that occurred near the courthouse without any concern that it would capture communications protected by the Fourth Amendment and Title III," the defense lawyers wrote, pointing out that the courthouse steps are regularly the site of privileged conversations between lawyers and their clients. "What the government did here is not unlawful only because it occurred outside a courthouse, but that fact makes it all the worse," they wrote.

    The defense team includes Matthew Jacobs of Vinson & Elkins and Jeffrey Bornstein of Rosen Bien Galvan & Grunfeld, in addition to Weinberg, Feuchtbaum and the Latham lawyers.

    A spokesperson for the Justice Department declined to comment.

    Sideman's Feuchtbaum said that the courthouse recordings have significance that extends beyond the San Mateo foreclosure case.

    "If this is allowed to stand," he said, "I and every other lawyer who knows about this is on notice that they can never have an expectation of privacy on the courthouse steps since the government has assumed for itself the right to plant hidden microphones there."

Illinois Jury Hammers Sticky-Fingered Real Estate Broker For Swiping $239K In Client Cash From Brokerage Escrow Account

In DuPage County, Illinois. the Daily Herald reports:
  • In the time leading up to his arrest, after confessing to co-workers to stealing potential homebuyers' earnest money, Harry "Bud" Simons told an investigator he knew the hammer would drop soon.

    A 12-member DuPage County jury swung that hammer [last week], convicting the former Burr Ridge real estate broker of all five counts of theft he was charged with. The jury deliberated for little more than an hour after the four-day trial. Simons now faces between four and 15 years in prison.

    Prosecutors said that between February 2013 and February 2014, Simons accepted earnest deposits totaling $145,300 from clients who wished to purchase homes being sold by his real estate agency, County Line RE/MAX in Burr Ridge.

    But once business slowed and the former Willowbrook resident began having trouble paying the agency's bills, prosecutors said, he began transferring money from the agency's escrow account that holds the buyers' earnest money into the agency's operating fund. In all, more than $239,000 was transferred among the accounts in 68 transactions.

    Closings on homes ranging in price from $1.6 million in Oak Brook to $55,000 in Berwyn were in jeopardy as agents and their clients began to discover their money was gone.

    "Twelve people put money down to secure their purchase of a home and to live the American dream, only to have it taken from them by a man who they'd never even met," Assistant State's Attorney Shanti Kulkarni told jurors during his closing arguments. "(Simons) left the buyers, sellers and agents scrambling to clean up his mess."(1)

    Several buyers and their agents testified that in several of the cases, the agents made up for the loss by taking the money from their own commissions because "it was the right thing to do."

    Simons' attorney, John Paul Carroll, maintained throughout the trial that prosecutors' account of events is accurate and put on no defense, but he said Simons wasn't guilty of the theft because he never intended to deprive his customers of their earnest money permanently.

    "He did what he wasn't supposed to do. He was bad. He was naughty," Carroll told jurors in his closing arguments. "He never took (the money) without believing he could put it all back. But in 2013 things started to get a little rocky, and he just couldn't keep up."

    An investigator testified during the trial that Simons told him he knew in March 2013, when it was clear the business was failing, that he would never be able to pay back the money.

    "You cannot pay back $239,000 on hope," Assistant State's Attorney Diane Michalak said in her closing rebuttal.

    Michalak requested Simons be taken into custody, but Judge Robert Miller denied her request. Simons is next due in court on Jan. 6, when a sentencing date would likely be set.
Source: Burr Ridge real estate broker guilty on all theft counts.
(1) The Illinois Department of Financial & Professional Regulation maintains a real estate brokerage ripoff reimbursement fund (aka Real Estate Recovery Fund), from which a limited amount of losses may be recovered by a victim of a real estate agent. Losses from embezzlement of money or property, or losses resulting from money or property being unlawfully obtained from any person by false pretenses, artifice, trickery, or forgery or by reason of any fraud, misrepresentation, discrimination, or deceit by or on the part of any real estate licensee or the unlicensed employee of a licensee and that results in a loss of actual cash money, as opposed to losses in market value, can be recovered.

Recovery is limited to $25,000 per victim, together with costs of the lawsuit a victim must bring to secure a money judgment and attorney's fees incurred in connection therewith of not to exceed 15% of the amount of the recovery ordered paid from the Fund. The maximum liability against the Fund arising out of the activities of any one real estate licensee or one unlicensed employee of a licensee is currently $100,000. Source: Illinois Compiled Statutes - 225 ILCS 454/20-85.

Federal Judge Gives Green Light To Class Action Lawsuit Against Presidential Candidate, Trump University Alleging Violations Of State Deceptive Practices Laws In Connection w/ Peddling Real Estate Seminars Teaching "Insider Success Secrets" To Consumer Public

A post from Rebecca Tushnet's 43(B)log (False advertising and more) reports that the class action lawsuit against Donald Trump & Trump University (a purported educational program intended to teach enrollees how to succeed in the real estate business) has been allowed to continue by a federal court in California. An intro to the post:
  • Charlatan and budding fascist Donald Trump failed to get rid of many consumer protection claims against him and his “Trump University” (now renamed). Can’t wait to see how he’ll explain why this means he’s great.

    In 2004, Trump helped found Trump University, a private, for profit entity offering real estate seminars and purporting to teach Mr. Trump’s “[i]nsider success secrets.” TU shifted to live events in 2007. Consumers were first invited to a ninety-minute Free Preview, preceded by an orchestrated marketing campaign:   
  • [excerpted from the court ruling] For example, consumers were sent “Special Invitation[s] from Donald J. Trump” which included a letter signed by Mr. Trump that stated “[m]y handpicked instructors and mentors will show you how to use real estate strategies.” Newspaper advertisements displayed a large photograph of Mr. Trump, stating “[l]earn from Donald Trump’s handpicked expert,” and quoted Mr. Trump as saying: “I can turn anyone into a successful real estate investor, including you.” 
  • Similarly, TU’s website displayed large photographs of Mr. Trump and included statements such as “Learn from the Master,” “It’s the next best thing to being his Apprentice,” and “Insider success secrets from Donald Trump.” Further, TU advertisements “utilized various forms of recognizable signs to appear to be an accredited academic institution” such as a “school crest that was ubiquitous and used on TU letterhead, power point presentations, promotional materials and advertisements.” Plaintiffs have provided evidence that Mr. Trump reviewed and approved all advertisements.
For more, see If only the last Trump would sound: Trump University case continues.

For the court ruling, see Makaeff v. Trump University, LLC, 2015 WL 7302728, No. 10cv0940 (S.D. Cal. Nov. 18, 2015).

For more on this lawsuit, see Makaeff v. Trump University, LLC - Frequently Asked Questions.

Sunday, November 29, 2015

Head Manhattan Fed To Local Real Estate Developers: Don't Think You Can Build Rental Apartments Inaccessible To Persons w/ Disabilities, Then "Hide Behind Opaque Corporate Structures To Evade" Fair Housing Act Obligations, Or "Avoid Liability For Violating That Act"

From the Office of the U.S. Attorney (New York City):
  • Preet Bharara, the United States Attorney for the Southern District of New York, announced [] that the United States has reached a settlement that resolves a federal civil rights lawsuit against THE DURST ORGANIZATION, INC. (“DURST”), a major real estate developer based in New York City, and DURST’s affiliates and subsidiaries.

    The lawsuit alleges that DURST engaged in a pattern and practice of developing rental apartment buildings that are inaccessible to persons with disabilities. Under the settlement, DURST agrees to establish procedures to ensure that its ongoing and future development projects, such as the 2,400-unit Halletts Point development in Queens and the 709-unit VIA 57 West development in Manhattan, will comply with the accessibility requirements of the federal Fair Housing Act (“FHA”).

    DURST also agrees to make two apartment buildings in Manhattan containing more than 1,000 units – The Helena and The Epic – more accessible to individuals with disabilities.

    Finally, DURST agrees to provide up to $515,000 to compensate aggrieved persons and pay a civil penalty of $55,000. The settlement was reached after the court denied DURST’s motion to dismiss the government’s lawsuit and was approved yesterday by U.S. District Judge Ronnie Abrams.

    Manhattan U.S. Attorney Preet Bharara said: “This is the ninth in a series of lawsuits that this office has brought against real estate developers and architects who fail to design and construct new apartment buildings accessible to people with disabilities. When the government filed this lawsuit, Durst claimed that it should not be held responsible for inaccessible conditions at The Helena and other rental buildings – despite the fact that Durst’s own website trumpets its role in developing those buildings. It was only after the Court rejected Durst’s argument that Durst finally accepted its obligations under the law.

    [This] settlement with Durst makes clear that real estate developers cannot hide behind opaque corporate structures to evade their obligation to comply with the Fair Housing Act or avoid liability for violating that Act.”

Civil Rights Feds, Housing Authority Of Baltimore City Agree To Extension, Amendment To Consent Decree Requiring Remedies For Failure To Provide Accessible Housing To Persons w/ Disabilities

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department announced [] that a federal district court has approved a supplemental consent decree between the United States, the Maryland Disability Law Center and the Housing Authority of Baltimore City (HABC). The original consent decree contained remedies for HABC’s failure to provide accessible housing to persons with disabilities. The supplemental consent decree, [...] continues and amends certain terms in the original consent order in United States v. HABC, and Bailey v. HABC, entered on Dec. 20, 2004.

    “We are pleased with the significant progress made by the Housing Authority of Baltimore City to implement the terms of the original decree,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “We look forward to working with the Housing Authority to create new accessible housing opportunities for persons with disabilities and enhancing their quality of life.”

Ex-Tenant Who Got Booted For Subletting His NYC Apartment Gets Hammered By Landlord w/ $3 Million Libel Suit For Allegedly Posting Sexist, Libelous Comments Directed Toward Managing Agent

In New York City, the New York Post reports:
  • A tenant who was evicted from his luxury apartment vented his rage on the building’s managing agent, calling the woman a “drug-addicted harlot who sucks and f–ks for money and drugs” on two Web sites, according to court papers.

    So the landlord of 95 Wall St., UDR Inc., is suing former resident Andrew Watroba for $3 million in a libel suit.

    UDR hauled Watroba to Housing Court last December after he refused to leave when he was caught illegally subletting, the suit says.

    Watroba, 36, agreed to leave, but not before making the libelous posts at and , according to the Manhattan Supreme Court suit.

    The screeds also blame managing agent Tara Dexter for turning the building into “a veritable den of prostitution and drugs and debauchery,” the suit says.

    Watroba did not return a call for comment.

Bakersfield Man Faces Discrimination-Based Charges Of Interfering w/ Another's Housing Rights For Allegedly Shouting Racist Slurs At Latino Man Outside Victim's Home, Firing Sawed Off Shot Gun In Attempt To Intimidate & Interfere w/ Victim's Occupancy Of His Home Because Of Race, Color, Or Nat'l Origin

From the U.S. Department of Justice (Washington, D.C.):
  • A federal grand jury returned a four-count indictment [] against Justin Whittington, 24, of Bakersfield, California, charging him with interfering with a person’s housing rights because of his race, color or national origin by use of force or threat of force, use of a firearm during a crime of violence, unlawful possession of a prohibited firearm and making a false statement to a special agent of the FBI, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U. S. Attorney Benjamin B. Wagner of the Eastern District of California.

    According to court documents, on Dec. 19, 2012, Whittington shouted racist slurs at a Latino man outside the Latino man’s home in Oildale, California, and fired a sawed off shot gun in an attempt to intimidate and interfere with the victim’s occupancy of his home because of his race, color or national origin.

    This case is the product of an investigation by the FBI and the Kern County, California, Sheriff’s Office. Trial Attorney Samantha Trepel of the Justice Department’s Civil Rights Division and Assistant U. S. Attorney Brian K. Delaney of the Eastern District of California are prosecuting the case.

    If convicted, Whittington faces a maximum statutory penalty of life in prison and a $250,000 fine.