Saturday, April 16, 2016

Residents In Troubled 81-Bed Assisted Care Home To Get The Boot After State Yanks Facility's Operating License; Aide's Admission She Hit Dementia-Stricken Patient Over The Head w/ Water Pitcher Was Last Straw For Complaint-Riddled Outfit

In Hollywood, Florida, the South Florida Sun Sentinel reports:
  • A troubled Hollywood assisted living facility is being forced to close after losing its license to operate.

    The facility has until the end of April to transfer residents to other facilities, said Shelisha Coleman, spokeswoman for the Florida Agency on Health Care Administration.

    On Feb. 5, Coolidge Palms was barred from accepting new residents after an aide admitted she hit an 80-year-old woman in the head with a water pitcher 10 days earlier. The elderly woman, who suffers from dementia, required a trip to the hospital for stitches.

    Aide Mary Hunte told police she poured water on the woman's head on Jan. 26, then struck her with the pitcher because the woman bit her arm. But a state investigator who saw a surveillance video of the incident disputes the aide's claim.

    Hunte was never disciplined, according to a manager at the 81-bed facility at Coolidge Street and Dixie Highway.

    Christopher Parrella, an attorney for Coolidge Palms, could not be reached for comment despite an email and call to his office.

    Coolidge Palms has had 30 complaints filed against it over the past five years, according to the state. One incident, involving an amputee left to change her own diapers, led to a $10,000 fine last year.

    But it was the water pitcher incident that led the state to impose an emergency moratorium prohibiting the facility from taking in new patients, state records show.

    At the time of the incident, Coolidge Palms had been under a "plan of correction" required by the state to ensure that staff be retrained on resident rights and recognizing and reporting abuse and neglect.The state in February found no evidence it had complied.

    The state's decision to shut down a big facility is rare, said Brian Lee, a former elder care ombudsman for the state of Florida.

    "Usually they shut down small places. [The state] is flexing their muscles by going after a large assisted living facility," said Lee, executive director of Families for Better Care, a national advocacy group for improving conditions at long-term care facilities.

Over Three Dozen Tenants In Aging 99-Unit South Bronx Apartment Building Tag "City's Worst Landlord" w/ Lawsuit Demanding Livable Conditions, Clearance Of Over 500 Active Housing Violations

In The Bronx, New York, the New York Daily News reports:
  • Inside a building on the Grand Concourse blocks from Yankee Stadium, Rico Moreno hears rats scratching at his rotting bathroom tiles when he tries to take a shower.

    Upstairs, Laura Bordas and her mother, Miguelina Fana, are forced to cook dinner on hot plates. The building’s stoves have not worked for weeks, ever since the laundry room in the basement caved in and authorities cut off the building’s gas line.

    Now, those tenants are among 38 Bronx neighbors who have filed suit against building owner Ved Parkash for failing to correct a laundry list of horrid conditions, the Daily News has learned.

    In papers filed in Bronx Housing Court, the tenants say that their homes at 750 Grand Concourse have deteriorated since Parkash — named by the public advocate’s office in November as the “City’s Worst Landlord” — took the deed 20 years ago.

    The tenants hope a judge will order Parkash — scheduled to appear in court [] for the first time — to fix more than 500 active city Housing Preservation and Department Department violations, or face fines and possible imprisonment.
    The current violations count at the prewar, 99-unit elevator building is 516, city records show.

    Unlivable conditions include lack of hot water and cooking gas, peeling ceilings and reports of lead paint.
    A lawyer for the tenants said there was no excuse for the decrepit conditions.

    “These violations exist, and they have to be corrected,” said Keriann Pauls of the Urban Justice Center, which is representing the residents with the help of tenant rights group CASA New Settlement.

    “There’s no excuse for them to say, ‘We don’t have to do this.’ ”

    The fixes could not come soon enough for Moreno, 32, who has resorted to sticking rat traps into his shower tiles to keep the rodents at bay.

    Over time, it will mold up,” he told The News during a recent visit. “But it’s better than having the rats come in.”

Cash-Lacking Housing Authority's Proposal To Unload Aging, Deteriorating Public Housing Complex For Demolition By Private Developer Triggers Protests From Low-Income Tenants Fearing Mass Eviction

In Minneapolis, Minnesota, the Minneapolis Spokesman-Recorder reports:
  • Residents of Glendale Townhomes told Minneapolis city council members in no uncertain terms that they do not intend to become the next victims of gentrification. “We are not moving out. Repair our homes,” read numerous signs.

    About 30 residents and their supporters delivered 1,000 signatures to the council meeting on March 30, demanding their homes be repaired and their community be preserved, not demolished. The Minneapolis Public Housing Authority (MPHA), which owns the 64-year old historic public housing complex, says it doesn’t have the funds to renew the buildings and has proposed selling the property to private developers.

    Glendale lies one block south of the University Avenue Green Line in the Prospect Park neighborhood. Developers have been building market rate and luxury apartments along the line and see the 12 acre, low-density townhouse complex as prime real estate.

    Proposed development options call for demolishing the 184 townhomes and replacing them with high-density market rate housing. The MPHA says the project would include 184 subsidized units for existing residents to return to after construction is complete. Residents contend that public housing communities once dispersed never come together again.

    Residents spoke about how they have become a community across languages and nationalities, and told the city officials how much the location means to them. “We love our neighbors,” said one young speaker at the rally before the council meeting. About 300 children live in the community and attend neighborhood schools. Public transit makes it easy for residents to get to jobs, medical appointments and colleges.

    Residents took their two-year long battle to the council to appeal for their support to preserve the existing public housing and save Glendale. City Council member Cam Gordon, who represents the area, hesitated to say what proposal he supports, saying at this point he sees his role as one to “facilitate a process.”

    MPHA promises to give residents Section 8 housing vouchers, but as organizer Ladan Yusuf contended, it is an empty promise when there are 12,000 people on the waiting list for vouchers and few landlords in Minneapolis willing to accept them.

    What is happening to Glendale is happening all over the city,” she said. “It has come to the point where land is worth more than human beings,” she added.

    Resident concluded their address to the city council with a chant echoing Yusuf’s point: “Glendale for the needy, not the greedy.”

Ellis Act Evictions Take Toll On Los Angeles Rental Market As Incidents Of Long-Time Rent-Controlled Tenants Getting The Boot Increase

In Los Angeles, California, the Los Angeles Times reports:
  • Looking to cash in on a booming real estate market, Los Angeles property owners are demolishing an increasing number of rent-controlled buildings to build pricey McMansions, condos and new rentals, leading to hundreds of evictions across the city.

    More than 1,000 rent-controlled apartments were taken off the market last year — a nearly threefold increase since 2013, according to a Times analysis of housing data. Evictions from such units have doubled over the same time.

    Across L.A., more than 20,000 rent-controlled units have been taken off the market since 2001, city records show. The removals peaked during the housing bubble and then bottomed out in the recession, but they have risen significantly since then.

    The number of lost units is a fraction of the roughly 641,000 rent-controlled apartments in the city, but in a tight market the removals have had an outsized effect, tenant advocates say, eating away at the supply of affordable housing at a time when L.A. has become one of the least affordable cities in the country.

    "Our housing situation is beyond crisis," said Larry Gross, executive director of the Coalition for Economic Survival, a tenant advocacy group. "It's a catastrophe and it's getting worse."

Habitat-NYC Affiliate's Role Incentivizing Sleazy Brooklyn Real Estate Operator To Force Low-Income Tenants Out Of Aging Buildings, & Used $21 Million Federal Grant To Pull It Off

In Brooklyn, New York, ProPublica reports (a story co-published with the New York Daily News):
  • In 2010, the New York City Affiliate of Habitat for Humanity received a $21 million federal grant to work on a city neighborhood hit particularly hard by the foreclosure crisis and help stabilize it.

    The funds would allow Habitat-NYC to launch the most ambitious project in its 32-year history. Its neighborhood pick was Bedford-Stuyvesant, a historically poor neighborhood in central Brooklyn, where the charity would focus on buying and renovating abandoned apartment buildings.

    There was just one problem. With few vacancies in the gentrifying area, longtime tenants were pushed out of their apartments — some into homelessness — clearing the way for developers to sell to Habitat at a hefty profit, a ProPublica investigation has found.

    Ultimately, Habitat’s project came with a cost: While scores of families gained new homes, other even needier ones were displaced.

    Though Habitat promoted the properties it acquired to renovate as “long-vacant,” four of nine were still occupied shortly before the charity moved to buy them, records show. In two cases, Habitat targeted buildings just days after the last families living there moved out.

    The deals, and what local Habitat executives said about how they were being accomplished, left some inside the charity so upset that at least two employees emailed anonymous complaints to the nonprofit’s international headquarters in Georgia.

    “Habitat-NYC’s Director [of] Real Estate and Construction speaks openly about making deals with developers, saying that we can not buy buildings from them until they get rid of all their tenants,” one of the employees wrote in a May 2012 email, which was provided to ProPublica. “We are spending federal money to throw low-income New Yorkers out of buildings.”
For more, see How Habitat for Humanity Went to Brooklyn and Poor Families Lost Their Homes (The charity paid millions in federal stimulus funds to developers shortly after longtime tenants were pushed out. “We are spending federal money to throw low-income New Yorkers out of buildings,” wrote a Habitat whistleblower).

For a story follow-up, see Council Member Pushes Habitat for Humanity to Restore Homes to Displaced Families (ProPublica showed last week how the charity had used federal funds to acquire vacant buildings, but some had been occupied just days before the charity moved to acquire them).

5-Month Ordeal Finally Ends For NYC Landlord After Prevailing In Costly Battle To Regain Possession Of Rented Apartment; Two Tenants From Hell Get The Boot For Converting 3-Bedroom Unit Into 10-Bedroom Flop House & Peddling Each Room On Airbnb For $35/Night

In Elmhurst, Queens, WPIX-TV Channel 11 reports:
  • It took five months and 10 appearances in Housing Court, but landlord Eddie Shiew finally evicted Burack Firick and Dogan Kimilli, two tenants who rented a three-bedroom apartment in Elmhurst, Queens, from Shiew and then illegally renovated it.

    They converted it into a 10-bedroom apartment without the landlord’s permission then listed the small living spaces created by the renovation for rent on Airbnb, a website for people looking for a cheap place to stay for a short time.

    When PIX11 News first reported this story four months ago, the small bedrooms were being rented for $35 a night and up by Firick and Kimilli, who were not living in the apartment themselves.

    When the landlord found out what was going on, he came in and tore down the renovations, changed the locks on the doors, and ordered the tenants to vacate the premises. But even though the lease prohibits tenants from making any alterations or renovations without the landlord’s permission, the housing court judge ruled against Shiew.

    “They say I illegally locked them out,” he said.

    What a shame!

    The judge ordered Shiew to let Firick and Kimilli back into the apartment until the landlord could obtain an order of eviction. As PIX11 News reported, Firick has pulled the same renovation scam with other landlords. He texted Shiew saying, “We know the laws very well. You’ll not be able to evict us ever.”

    PIX11 News followed the case in civil court for months, as Firick and Kimilli convinced the judge to postpone the case time after time, as they continued making money renting out the rooms on Airbnb.

    As the court case dragged on, Firick and Kimilli failed to pay Shiew the $2,500-a-month rent they agreed to in the lease. The judge ordered the back-rent be paid, but when Firick and Kimilli ignored that order, the eviction was granted.

    PIX11 News was there when the New York City Marshals showed up to serve the order. No one was in the apartment, but after forcing open the front door, it was clear people were still living in some of the rooms.

    Landlord Eddie Shiew was allowed to change the locks. Firick and Kimilli are no longer permitted to enter the apartment.

    So Eddie Shiew finally won the battle, but what a shame it was such a long and expensive ordeal. He is still owed $10,000 in back rent by Firick and Kimilli and plans to sue them to recover that money.

Friday, April 15, 2016

Jury Awards Two Pennsylvania Homeowner-Couples Over $4 Million In Lawsuit Blaming Natural Gas Producer's Fracking Activities Of Contaminating Their Well Water, Causing Smelly, Discolored, Foul-Tasting H20 To Flow From Faucets; Defendant Says Appeal Forthcoming

In Scranton, Pennsylvania, The Associated Press reports:
  • Two couples were awarded nearly $4.25 million [] after a federal jury found one of the largest natural gas producers in Pennsylvania was responsible for the contamination of their well water, capping a six-year odyssey that turned their sleepy village into a battleground over the nation's shale drilling and hydraulic fracturing boom.

    The verdict in Scranton came at the end of a bitter lawsuit pitting homeowners in Dimock against Houston-based Cabot Oil & Gas Corp. The company, a prolific driller in Pennsylvania's Marcellus Shale formation, said it will appeal, accusing the jury of ignoring "overwhelming scientific and factual evidence that Cabot acted as a prudent operator in conducting its operations."

    Dimock was the scene of the most highly publicized case of methane contamination to emerge from the early days of Pennsylvania's natural-gas drilling boom. State regulators blamed faulty gas wells drilled by Cabot for leaking combustible methane into Dimock's groundwater. Cabot claimed the methane was naturally occurring and said the problems in the water wells predated Cabot's arrival.

    Dozens of plaintiffs settled with Cabot in 2012, but two families opted to take their claims to trial.

    "They did something wrong. That was the whole point of getting it into the courtroom," one of the plaintiffs, Scott Ely, told reporters outside the courthouse.

    Residents first reported problems in the wells in 2008. The water that came out of their faucets turned cloudy, foamy and discolored, and it smelled and tasted foul. Homeowners, all of whom had leased their land to Cabot, said the water made them sick with symptoms that included vomiting, dizziness and skin rashes.

    A state investigation found that Cabot had allowed gas to escape into the region's groundwater supplies, contaminating at least 18 residential wells.

    The plaintiffs' attorney called the verdict a warning shot that will resonate beyond the courtroom.

    "Cabot doesn't care. Industry doesn't care. They're the big bucks. Their influence is wide and far. ... It's fine with me if industry takes a big fat hit," Leslie Lewis said.

State High Court: NYC Landlords' Obligation To Remove Lead-Based Paint In Dwellings Where Kids Under 6-Years Old Reside Not Applicable To Babysitting-Grandma's Apartment Where Child Spent 50 Hours/Week

In The Bronx, New York, the New York Law Journal reports:
  • Although a child spent about 50 hours a week in her grandmother's Bronx apartment during the first year of her life, she did not "reside" in the unit for purposes of New York City's lead paint abatement law, the state Court of Appeals decided.

    The court dismissed a negligence action filed on the girl's behalf, finding that the building's owner did not owe her a duty to abate hazardous lead conditions under Local Law 1 of 2004 of the city's Administrative Code, or that its failure to do so caused injury.

    The 6-1 ruling [] in Yaniveth R. v. LTD Realty Company, 35, had both the majority and the dissenter leafing through dictionaries and case law for definitions of "residence" and "domicile" for guidance on the Yaniveth R's frequent presence in Victoria Collazo's home. The girl returned to her parents in the evenings when they got home from work, according to court papers.

    Under the law in effect during 1997, the first year of Yaniveth's life, owners of multiple dwellings were obligated to remove or cover lead-based paints in all units in which children age 6 or under "reside" [New York City Administrative Code §27-2013(h)(1)].

    The lead abatement law was amended as Local Law 1 of 2004. The law, through the 2004 revision and later amendments, retains the qualifier that lead abatement must be performed in units where children ages 6 and under "reside."

    In January 1998, tests on the 1-year-old Yaniveth revealed an elevated lead level in her blood that the New York City Department of Health traced to hazardous paint conditions in her grandmother's apartment. The subsequent negligence action alleges that Yaniveth, who is now 19, suffers from brain damage and cognitive deficits because of her exposure to lead.

    The Court of Appeals said the girl did not live with her grandmother, nor had her parents intended her to do so.

    "Yaniveth visited her grandmother's apartment during the day solely for the purpose of child care, while her parents were at work," Judge Eugene Pigott Jr. wrote for the majority. "Although a person may reside at more than one location, spending 50 hours per week in an apartment with a non-custodial caregiver is insufficient to impose liability on a landlord under Local Law 1."

    Pigott said the court's ruling does not foreclose the possibility that a person could have multiple residences under the meaning of the law, but said Yaniveth's circumstances was not one of those cases.

    "The question of whether a person 'reside[s]' in a given location is a fact-driven inquiry that depends on the totality of the circumstances," he said. "Although there is no question of fact in this case that Yaniveth did not reside in her grandmother's apartment, there are a number of situations in which a child may reside in more than one apartment, such as in a joint custody situation or other shared living arrangement."

    Chief Judge Janet DiFiore and Judges Jenny Rivera, Sheila Abdus-Salaam, Leslie Stein and Michael Garcia were also in the majority.

    The dissenter, Judge Eugene Fahey, said the court is obligated to take into account the purpose behind the lead abatement law.

    "The intent of Local Law 1 is obvious: its enactors sought to shield young children, that is, those who cannot protect themselves, from the dangers of lead-based paint poisoning," he wrote. "The will of a legislative body is discernable from its diction … and the use of the word 'reside' in Local Law 1 signals a desire to protect young children who may be exposed to lead-based paint in more than one location."

    Fahey, citing Matter of Newcomb, 192 NY 238 (1908), said state case law has long recognized that a person may have only one domicile, but could reside in more than one location.
Source: Judges Find No Duty to Abate Lead in Grandmother's Unit (may require paid subscription; if no subscription, GO HERE, then click the appropriate link for the story).

For the ruling of the New York Court of Appeals, see Yaniveth R. v LTD Realty Co., 2016 NY Slip Op 02550 (N.Y. April 5, 2016).

Environment Feds Clip Home Improvement Contractor For $28K+ For Allegedly Failing To Comply w/ National Lead Paint Safety Rule When Working On Home Built Pre-1978 (i.e. Lacked EPA Certification, Failed To Provide Lead Paint Brochure To Homeowners, etc.)

From the U.S. Environmental Protection Agency (San Francisco, California):
  • The U.S. Environmental Protection Agency recently fined G.D. Friend, Inc. (operating as Everlast Home Energy Solutions) $28,564 for failing to comply with the federal Renovation, Repair and Painting (RRP) Rule while performing renovation work at two residential properties in Southern California. This rule seeks to protect the public from lead-based paint hazards that occur during repair or remodeling activities in housing built before 1978.

    “Renovation work in older homes can create hazardous lead dust, but there are simple steps contractors can take to keep everyone safe,” said Jared Blumenfeld, EPA’s Regional Administrator for the Pacific Southwest. “EPA will take enforcement action against companies to ensure they follow proper lead-safety procedures.”

    G.D. Friend, located in Anaheim, Calif., installs energy efficient home improvement products, such as windows and siding. An EPA inspection found that in February and March 2014, the company performed work at two pre-1978 residential properties in Anaheim and La Verne without:

    · receiving proper certification from EPA;
    · providing clients with the required federal Renovate Right brochure;
    · keeping records indicating compliance with lead-safe work practices; or
    · ensuring a certified renovator performed all of its lead-based paint responsibilities.

    Lead-contaminated dust can be easily ingested or inhaled. Common renovation activities like sanding, cutting, and demolition can create hazardous lead dust and chips that can settle on home surfaces. Exposure to such contamination through hand-to-mouth contact or breathing can result in lead poisoning for children, families and construction workers.
    EPA enforces the federal Toxic Substances Control Act and its RRP rule to protect residents from exposure to lead-based paint hazards. Contractors who disturb painted surfaces in homes and child-occupied facilities built before 1978 must be trained and certified, provide educational materials to residents, and follow safe work practices. Lead-based paint was banned for residential use in 1978, but EPA estimates that it is still present in more than 37 million older homes in the United States.

Thursday, April 14, 2016

Indianapolis Jury Hammers Ex-Real Estate Agent w/ 20 Convictions For Duping Financially Strapped Homeowners Into Signing Over Title To Homes In Exchange For False Short Sale Promises, Then Leasing Out Properties To Unsuspecting Tenants, Skimming The Rent While Stiffing Banks Out Of Mortgage Payments

In Indianapolis, Indiana, The Indianapolis Star reports:
  • A former Indianapolis Realtor accused of defrauding financially strapped homeowners has been found guilty of more than 20 crimes, including corrupt business influence and several counts of theft and forgery.

    A jury convicted David Garden, 58, [] after a three-day jury trial in Marion Superior Court.

    Prosecutors said Garden victimized several Indianapolis homeowners who were facing foreclosure and other financial difficulties. The Indianapolis man persuaded unsuspecting homeowners to sign over their property titles to him, leaving them holding the mortgage on houses they no longer owned. Garden advised them to move out, telling them he would arrange a short sale with their bank. Instead, he rented their homes and kept the money for himself, prosecutors said.

    In some cases, Garden convinced homeowners that filing for bankruptcy was in their best interest. But doing so only removed their properties from sheriff's sales and allowed Garden to keep tenants in the homes and collect payments.

    In one instance, Garden lived in one property for more than a year without the owner's knowledge.

    Some of the properties that Garden rented out were in deplorable condition, prosecutors said. In a previous interview with IndyStar, one tenant who was paying Garden $650 a month in rent and thought she would own the house in two years as part of a rent-to-own agreement said constant flooding caused the wooden floor to rot.

    Garden operated under several business names, including Star Homes Inc., Garden Homes Realty, Christian Home Realty and Five Star Realty, according to the Marion County prosecutor's office.

    Garden was arrested after a two-year investigation by the prosecutor's office and the Indianapolis Metropolitan Police Department. The Indiana attorney general's office had received 45 consumer complaints against Garden.

    Garden is scheduled for a sentencing hearing May 25.

Within Days Of Listing Home For Sale, Virginia Couple Get Unplanned Visits From Multiple Strangers Responding To Bogus Craigslist Rent Scam Ad; Teen Sleuth Uses "Counter Hacking" To Trace Back Scammer's Location To Nigeria

In Blacksburg, Virginia, The Roanoke Times reports:
  • Adam and Amy Stevens said they were recently shocked to find a familiar four-bedroom rental listed on Craigslist for just $700 a month. It was the home they’ve lived in since 2009.

    Then, they got another surprise: People were actually stopping by their home to inquire about its availability.

    Amy Stevens said she first suspected a problem when her neighbor phoned while she was attending one of her son’s soccer games. The neighbor told her a stranger had showed up on their street and was asking questions about the Stevens’ home.

    “She said, ‘Amy are you really wanting to rent your house for $700,’ and I was like, ‘What!,’ ” Amy Stevens said.

    During the past two weeks the same advertisement has drawn multiple strangers to the couple’s house in the Maple Ridge Village neighborhood, all of them ready to capitalize on the seemingly good deal.

    The family, who put their house on the market to sell on March 24, said they have never had intentions of renting it nor did they post it on the popular classified ad-filled website.

    The unplanned visitors, some of whom neighbors have witnessed peering into the family’s windows, have caused them much alarm and the response from the website company and local law enforcement has been frustrating.

    “At this point nobody seems to really want to do anything and nobody seems to care,” Adam Stevens said.
    Within days of the first visitor, three more people called in response to the rental ad. And by Wednesday, Amy Stevens said she decide to post the listing on Facebook and ask people to “flag it” in hopes of getting it removed.

    “Within 30 minutes they said it had been flagged for removal,” Amy Stevens said.

    She said people continued to call and visit the address. One visitor told her he had been informed that the house was empty and he could go in.

    Neighbor Tim Hartin intercepted another interested party, which he described as nice, but very disappointed to learn the house was not for rent.

    “They seemed bummed out. They said they’d drove from an hour away,” Hartin said.

    One caller provided Amy Stevens, who teaches at Blacksburg High School, a phone number and email address for the person behind the fake ad, which she relayed [to] one of her students, senior Josh Sternfeld.

    Sternfeld said “counter hacking” was one of his hobbies and after an email exchange he got the scammer to visit his personal website and from that was able to track the scammer’s IP address back to Lagos, Nigeria.

    Using the provided phone number and email address, The Roanoke Times requested and was sent the rental application from the scammer.

    In the email exchange, the person identifies himself as Keith Friedberg and writes that he has transferred from his “working place” to Houston, Texas. He also claimed the rental rate was so cheap because he was counting on the renter to do routine maintenance and keep the house “tidy.”

    Along with a variety of personal information, the document requests, “You picture and You wife picture,” and asks the potential renter to “stick to your words” because Friedberg is “putting everything into Gods hand.”

    According to researcher Damon McCoy, the Stevens’ situation is a common one when it comes to Craigslist rental scams.

    In March, McCoy, an assistant professor of computer science and engineering at New York University, and two other researchers published a study in which they found that Craigslist only catches about half of the rental scams listed on its site.

    According to the report, McCoy and his team analyzed more than 2 million Craigslist rental listings during a five month period and detected about 29,000 fraudulent listings in 20 major cities. They compared that number with the number of ads flagged as “suspicious” by Craigslist and found the site only caught 47 percent of the fake ads.(1)
For more, see Craigslist scam scares Blacksburg family.
(1) For the report, see Understanding Craigslist Rental Scams.

Wisconsin Homeowner Lists Home For Sale w/ Real Estate Agent On Realtor Website; One Day Later, Prospective Renters Begin Showing Up At Front Door Responding To Fake Craigslist Rent Scam Ad

In Janesville, Wisconsin, the GazetteXtra reports:
  • Janesville resident Dave von Falkenstein is wondering when people will stop knocking on his door to ask if they can pay rent to live in his home.

    It's happened three times in the last two weeks, and he's told all three people the same answer: No. That's because von Falkenstein's South Fremont Street home is not for rent—and he never told anyone it was.

    Yet his two-story bungalow the city's east side keeps popping up in a fake for-rent listing on classified sales website And people keep seeing the listing and keep coming to his home to ask about it.

    It started a few weeks ago, just a day after von Falkenstein says he listed his home for sale through a local Realtor and the Realtor's website.

    Von Falkenstein never posted his listing on craigslist. Which means it likely got hijacked and altered through a type of online scam that police and Realtors call the “craigslist rent scam.”

    Scammers troll real estate websites and other sources, pluck otherwise legitimate real estate listings, re-tool them and re-post portions of the listings to craigslist or other sites that aggregate classified sales to try to defraud prospective renters.

    Someone with no ties to von Falkenstein or the sale of his home has created a phony rent listing for von Falkenstein's property. That person is using his home as bait to lure people to reply to an email address and then wire an up-front payment of $1,100.

    According to the fake listing, the payment would cover security and fees to rent von Falkenstein's home.

    In return, the listing says, the person would get the keys to von Falkenstein's home through the mail along with rent documents.

    A rent scammer, of course, would not have access to von Falkenstein's keys.
    Von Falkenstein, who works as a website editor and analyst for, The Gazette's website, said he's not sure how many people have seen the fake listing of his property, or whether anyone has been swindled because of it.

    He discovered his home listing had been hijacked when a man showed up at his house and to ask about renting it. The man told him the house was listed on craigslist for rent for $600 a month.

    Von Falkenstein flagged the listing for removal from craigslist, but it popped up again on the site a few days later. Von Falkenstein's Realtor called him the second time the fake listing showed up, and he flagged it for removal. Again, craigslist removed the fake listing.
    A few days later, a woman from Stoughton showed up at his house with a list of craigslist rentals she was scouting. A few days ago, while von Falkenstein was raking his lawn, a man walked up and asked him about renting his house.

    It's kind of weird when it's eight o'clock at night and somebody knocks on your door to tell you your house is for rent. It's weird—especially when you have no personal memory of ever advertising your home for rent, and a sign in front yard says 'for sale' just as clear as day,” von Falkenstein said.
    Scammers typically offer email addresses and seek to set up electronic money transfers for what they claim is for first-month rent and security. Like other online scams, the scammers often often try to limit contact to email.
    [Realtor Randy] Borman said he heard of another rent scammer who used the actual name of the property owner in a phony listing, which he believes might have been plucked from online property tax records. [...] He said a phone call to a Realtor linked to a property listing could settle whether the house is actually for rent, and it could help someone find out if an online listing is legitimate.

    Borman said most legitimate owners, listing agents or landlords won't seek money up front for a rental without first meeting with the tenant or going through an application process.

    “As always, the best advice is the adage 'if it sounds too good to be true, it probably is,'” Borman said.
For the story, see So-called 'craigslist rent scam' emerging in Janesville (may require paid subscription; if no subscription, TRY HERE, then click the appropriate link).

For a recent study on fraudulently posted online rental listings, see Understanding Craigslist Rental Scams.

Wednesday, April 13, 2016

Ohio Man Who Used Short Sale/Home Flipping Racket To Dupe Foreclosing Lenders Into Taking 'Haircuts' On Eleven Underwater Houses Buys His Way Out Of Possible Four Year Prison Sentence By Coughing Up $620K To Cover Restitution, Fines; Promises To Keep Nose Clean For Two Years, Will Get Three Years Slammer Time If He Violates Probation

In Franklin County, Ohio, The Columbus Dispatch reports:
  • A man who orchestrated a mortgage-fraud scheme involving 11 central Ohio properties has agreed to pay more than $577,000 in restitution.

    Donald P. Landers, 44, who now lives in Nevada, pleaded guilty in Franklin County Common Pleas Court [] to one count of theft.

    In addition to ordering restitution, Judge David C. Young fined Landers $10,000 and put him on probation for two years. If he violates his probation, he will be sent to prison for three years, the judge said.

    Landers had pleaded guilty in April 2014 to one count of theft and three counts of money laundering, with a recommendation of four years in prison, but reached an agreement with prosecutors to withdraw that plea and plead to a lesser charge if he paid restitution.

    He deposited $620,000 into an escrow account with the court, Assistant Prosecutor Scott Smith said. The restitution amount of $577,549 and the fine will be deducted from the account.

    Landers, [...] identified properties that were in foreclosure and negotiated short sales with the lenders to buy the properties at much reduced rates in a scheme that he conducted from January 2007 to January 2008, Smith said.

    He used fraudulent information to convince lenders that the properties were worth less than market value and recruited so-called "straw buyers" to purchase the properties from his business at inflated rates. His company pocketed the difference.

    All of the properties eventually went into foreclosure, Smith said.

    The loss originally was estimated at $1.2 million, but more than half was recovered when the properties were sold at sheriff's auctions.

    Most of the restitution will be paid to financial institutions that were defrauded, although two of the straw buyers came forward with claims that will be paid, Smith said.

    Defense attorney Michael Hoague said probation was appropriate for his client, a former Marine with no prior record, whose restitution should eliminate any financial harm for the victims.

    Landers declined to make a statement during the hearing.

South Jersey Man Pleads Guilty To Theft By Deception For Running Loan Modification Racket That Fleeced Approx. 75 Victims Out Of $130K

In Burlington County, New Jersey, the Burlington County Times reports:
  • A Mount Laurel man has pleaded guilty to theft by deception for taking about $130,000 from about 75 victims to perform loan modifications and other financial services, but keeping the funds for his personal use, authorities said.

    Scott D. Feltman, 42, of Starboard Way, entered a guilty plea [] to the second-degree charge before Superior Court Judge Christopher Garrenger at the Burlington County Courthouse in Mount Holly.

    Feltman is scheduled to be sentenced to three years in prison on Sept. 27. He entered the plea to an accusation, meaning the charge had yet to be indicted.

    Feltman has agreed to pay about $130,000 in restitution to his victims, who had paid him to perform loan modifications, reverse mortgage procurement, and other financial services that were never honored. The victims were from New Jersey and Pennsylvania and are owed amounts that range from a few hundred dollars to as much as $16,000, authorities said.

    Feltman was operating under the company Baymar Capital Funding LLC, according to court documents.

Illinois Appeals Court: Attorneys, Others Who Target Racial Minorities For Ripoffs When Running Loan Modification Rackets Are Considered Mortgage Lenders Subject To Reverse Redlining Charges Under State Human Rights Act

In Chicago, Illinois, the Cook County Record reports:
  • An appeals panel has clarified that those in the business of targeting underwater homeowners, and particularly racial minorities, with false promises to pull them to the surface for a fee, can be considered mortgage lenders under the law and subject to action by the Illinois attorney general for discriminatory lending activity.

    The March 31 opinion was rendered by Illinois First District Appellate Court Justice Bertina Lampkin, with concurrence from justices Jesse Reyes and Robert Gordon. The opinion was in response to an interlocutory appeal filed by Chicago lawyer Matthew Wildermuth and real estate broker George Kleanthis, both of whom are being sued by Illinois Attorney General Lisa Madigan's office.

    In 2011 in Cook County Circuit Court, the attorney general acted on consumer complaints by filing a four-count suit against Wildermuth and Kleanthis. The suit alleged the pair violated the Illinois Human Rights Act by preying on African-American and Latino homeowners in the aftermath of the mortgage crisis that began in 2007.

    Drawing business through radio commercials, Wildermuth and Kleanthis allegedly told clients, who were in trouble with their mortgages, that they could quickly save their homes for them, by modifying their mortgages and reducing their monthly payments. Wildermuth and Kleanthis allegedly charged nonrefundable fees ranging from $3,000 to $5,000.

    The attorney general alleged the operation, based in an office in suburban Woodridge, was a swindle, because the promises of Wildermuth and Kleanthis were misleading, if not false, and failed to provide clients with the notices and disclosures required by law.

    Wildermuth made a motion to dismiss one of the counts that alleged Wildermuth and Kleanthis engaged in “real estate transactions” as defined by the Illinois Human Rights Act. Wildermuth contended he was involved in furnishing legal services, not engaging in real estate deals. The attorney general countered the defendants were indeed conducting real estate business when they arranged loan modifications and short sales. Cook County Judge Diane Larsen refused to dismiss, concluding defendants functioned akin to mortgage brokers.

    However, Larsen then granted defendants’ request for an interlocutory appeal to pose the following question to the appellate court for that body’s review: “Whether the State may claim a violation under the (Act) pursuant to a reverse redlining theory where it did not allege that the defendant acted as a mortgage lender.”

    Lenders accused of “reverse redlining” typically are believed to have connected minority borrowers with home loans, but at terms more onerous than typically extended to white borrowers with similar financial standing.

    Defendants argued they did not act as mortgage lenders, because the attorney general's office can't show they extended credit, or influenced original terms and conditions of credit, on unfavorable terms to any consumers. In light of this, defendants further maintained their alleged conduct did not constitute reverse redlining under the terms of the Illinois Human Rights Act.

    Justice Lampkin disagreed.

    “The Attorney General’s allegations concerning defendants’ residential loan modification services are neither too far removed from transactions in the residential real estate market nor lacking any connection to the financing of residential real estate,” Lampkin said.

    Lampkin went on to add, "The Act would provide little vindication to the policy of nondiscrimination in housing if it prohibited discrimination against individuals seeking a home or credit to purchase a home, but then subsequently gave free reign to entities to discriminate against these same individuals seeking loan modification services in order to avoid foreclosure."

    Lampkin and her two fellow justices determined the attorney general can claim defendants violated the Human Rights Act by reverse redlining, even though the attorney general did not assert defendants were mortgage lenders, because redlining can include other conduct, such as mortgage modification services.

    The case against Wildermuth and Kleanthis is proceeding, with the next hearing April 26. The attorney general’s office is seeking an injunction and civil monetary penalties against the two men.
Source: Appeals panel: Lawyers who say they modify mortgages can be subject to redlining discrimination actions.

For the court ruling, see People ex rel. Madigan v. Wildermuth, No. 1-14-3592 (Ill. App., 1st Dist., 5th Div. March 31, 2016).

Tuesday, April 12, 2016

Cops Bust S. California Real Estate Broker For Allegedly Swiping $600K From Nine Victims In Purported Short Sale Deals

In Santa Ana, California, KABC-TV Channel 7 reports:
  • A real estate broker based out of Santa Ana was arrested [] in connection with a real estate fraud investigation, according to authorities.

    Santa Ana police said 39-year-old Andres Pacheco stole $600,000 from nine victims and believe there may be more victims.

    One victim, Brian Kensinger, said he found a foreclosed home listing in Victorville for just under $70,000. Kensinger, who runs Shark Investments, a firm that buys, flips and sells home, felt he had to act quickly.

    "It's a 10 day close, cash, they happen very quick, don't need a lot of due diligence or inspection period, we just go after them," Kensinger explained. Kensinger signed a contract and worked out the details with a broker at Franklin Realty in Santa Ana.

    He wired money to the escrow account run by the broker, but two weeks passed and the seller had not received the cash. Kensinger called the broker. "He indicated to just give him a few days. There was no problem. That the transaction would close and he would get the money to where it needed to go," Kensinger said.

    But it never happened.

    Kensinger filed a police report only to find out he was not the only victim.

    "They were doing short sell transactions and he was offering to be the representative for both the buyer and the seller," Detective Corporal Shannon Rackley with the Santa Ana Police Department said.

    Pacheco was arrested for grand theft, intent to defraud, and aggravated white collar crime.

    Kensinger said his company will recover, but worries about the others who lost thousands of dollars. "This is the type of criminal act that can really devastate people's lives for a long time, that's what is really unfortunate," Kensinger said.

    If you feel you may have been a victim of a similar crime, you're asked to call Santa Ana police at (714) 245-8431.

Feds Squeeze Guilty Plea Out Of Oregon Property Manager For Swindling Over $3.5 Million From Landlord-Clients, Investors; Probe Triggered When One Victim Complained To State Regulator After Being Stiffed With Rubber Checks

In Eugene, Oregon, The Oregonian reports:
  • A former Eugene property manager pleaded guilty [] in federal court to swindling more than $3.5 million from property owners and investors.

    Terry Shockley, owner and operator of now-defunct TS Property Management, was one of the largest landlords in the Eugene area. He'll be sentenced in September, according to the U.S. Attorney's Office.

    Shockley, 63, pleaded guilty to two counts of wire fraud in U.S. District Court in Eugene, the Register-Guard reported. He agreed to a restitution order for the entirety of his victims' losses as part of a plea agreement, federal prosecutors said in a news release.

    He faces as much as 20 years in prison on each count, prosecutors said.

    Officials began investigating Shockley after one of his clients told the Oregon Real Estate Agency in November 2014 that checks from Shockley's company were returned because of insufficient funds, according to court records.

    The agency, which is tasked with regulating almost 700 property managers in the state, found that Shockley had falsified bank documents previously provided to the agency as part of a 2013 mail-in audit.

    Investigators also determined that Shockley swindled money and property from TS Property Management clients, client-investors and others. He did this, court records show, under "materially false and fraudulent pretenses, representations, and promises."

    That includes paying the company's operating expenses with misappropriated funds and withdrawing "large sums of money" for personal use.

    The agency also found that he kept all rent and deposit funds in one trust account when they should have been kept in separate accounts, according to the court records. The single account hadn't been reconciled in more than two decades.

    Shockley had been the sole signer for the company's accounts, court records show. He was the only person who decided what bills should be paid and when the company would pay them. The company didn't have any financial controls or reporting that tracked its monthly expenses or income, court records show.

    He was managing about 350 properties, according to the court records.

Feds Resume Controversial Asset Forfeiture Program That Allows Cops To Seize People's Property Without Arrest Or Criminal Conviction & Forces Victims Into Expensive, Difficult Process To Get Their Stuff Back

From a recent post from Public Citizen Litigation Group's Consumer Law & Policy Blog:
  • Asset forfeiture is the controversial practice of taking people's stuff when they may be involved in criminal activity. Why is the program controversial? Because sometimes the government seizes the assets of people who are innocent and it's very difficult to get it back. Compounding the problem is a racial disparity in whose stuff gets taken. (See here for a prior discussion.)

    Now the federal government has resumed its program of "sharing" asset forfeiture funds with local law enforcement, the Washington Post reports. Under the program, local law enforcement may take advantage of looser federal rules for forfeiture, so it's easier to seize assets, then the feds will "share" up to 80% of the proceeds with the local government. By returning the money to the local governments, DOJ is incentivizing local law enforcement to engage in more seizures.

Monday, April 11, 2016

In Defense of "Free Houses"

From a recent article in The Yale Law Journal:
  • Eight years after the start of America’s housing crisis, state courts are increasingly confronting an unanticipated consequence: what happens when a bank brings a foreclosure suit and loses? Well-established legal principles seem to provide a clear answer: the homeowner keeps her house, and res judicata bars any future suit to foreclose on the home. Yet state courts around the country resist this outcome.

    Banks have lost many foreclosure cases for two reasons, both resulting from recent changes in the mortgage market. First, securitization has created widespread errors in mortgage notes’ chains of assignment, making it difficult for banks to prove that they in fact own any particular mortgage. Second, securitization contracts incentivize banks to use “foreclosure mill” law firms to keep up with the flood of defaults, despite the fact that these firms are unable and sometimes unwilling to detect and rectify basic legal errors.

    When addressing faulty foreclosures, courts are afraid to bar future attempts to foreclose—that is, afraid of giving borrowers “free houses.” While courts rarely explain the reasoning behind this aversion, it seems to arise from a reflexive belief that such an outcome would be unjust.1 Courts are therefore quick to sidestep well-established principles of res judicata in favor of ad hoc measures meant to protect banks against the specter of “free houses.”

    This Comment argues that this approach is misguided; courts should issue final judgments in favor of homeowners in cases where banks fail to prove the elements required for foreclosure. Furthermore, these judgments should have res judicata effect—thus giving homeowners “free houses.” This approach has several benefits: it is consistent with longstanding res judicata principles in other forms of civil litigation, it provides a necessary market-correcting incentive to promote greater responsibility among foreclosure litigators, and it alleviates the tremendous costs of successive foreclosure proceedings.

    This Comment proceeds as follows. Part I explains basic foreclosure and mortgage-acceleration law. Part II describes how systemic banking behaviors and market forces have resulted in banks increasingly losing foreclosure suits after the 2008 financial crisis. Part III then describes how state courts have struggled to develop their jurisprudence on “free houses,” often ignoring these significant market problems. Finally, Part IV contends that the application of res judicata in foreclosure litigation is essential for two reasons: (1) it would uniformly apply civil rules of finality to foreclosure cases, and (2) it would have a much-needed positive behavioral effect on a mortgage-foreclosure market run amok.
For more, see In Defense of "Free Houses".

Thanks to Deontos for the heads-up on this article.

Failure To Provide Proper Notice Of Tax Foreclosures At Center Of Multiple Lawsuits Plaguing Detroit-Area Municipalities; One Title Insurer Takes Allegations Seriously Enough To Temporarily Suspend Insuring Title To Area's Tax-Foreclosed Homes

In Wayne County, Michigan, The Detroit News reports:
  • Wayne County is spending up to $18.6 million warning property owners they face tax foreclosure, but lawsuits allege the office is doing such a poor job that some owners aren’t aware they’ve lost homes until it’s too late.
    The Wayne County treasurer’s office has processed more than 100,000 foreclosures in the last decade. State law requires officials to reach out to anyone with possible interest in the properties when it is headed to foreclosure — through first class and certified letters, newspaper notices and personal property visits, including posted notices if no one is home.

    A handful of lawsuits contend those notifications don’t always happen: Certified letters are listed “in transit” more than two years after being mailed, while owners allege they never got a foreclosure notice from the company tasked with personally visiting properties.

    18 families have sued Wayne County and several suburbs in federal court, alleging the foreclosures are illegal because the owners didn’t receive notices and believed they had more time to pay taxes and save their properties. All face possible eviction.
    [I]n the wake of the notification allegations, one company, California-based First American Title Insurance, moved to temporarily refuse to insure deeds on tax-foreclosed homes in Wayne County this year.

More On Private Equity Outfits Running Predatory Land Contract Rackets, Buying & Flipping Dilapidated Foreclosures, Unloading Them Onto Unsophisticated Low-Income Homebuyers w/ Crappy Credit; One Former Operator: "You Have All The Responsibilities Of A Homeowner But None Of The Rights!"

Bloomberg reports:
  • Eight years after subprime mortgages all but disappeared, U.S. buyers with bad credit can still own homes. If they come up with a nominal down payment and stay current on their monthly bills, they'll get title to the property — after as long as 30 years. If they miss one payment, their contracts say they could lose all their money and get tossed out.

    The deals often end badly for low-income buyers. Some are financed by Apollo Global Management.

    While Apollo's stake in the business is small compared to the $170 billion it manages, most other high-profile investment companies have steered clear of what Apollo calls "seller-financed" transactions. Some investment firms are wary of how involvement could damage their reputations, and they're unwilling to put faith in the existing group of local operators, according to people at six companies with direct knowledge of their dealings.

    "It's so predatory in nature," said Tim Herriage, chief executive officer of 2020 REI Group in Dallas and former managing director at Blackstone Group LP's B2R Finance. Herriage knows this niche of the housing market well: As a partner in a Texas real estate firm, he used the strategy until 2006. "It doesn't pass the sniff test for me anymore. You're telling someone, 'You have all the responsibilities of a homeowner but none of the rights.'"

    Housing contracts and other lightly regulated transactions are proliferating in the new financial system that's emerged since the 2008 crisis. As the biggest banks retreated from mortgage lending, and the market for riskier borrowers dried up, firms such as Apollo — so-called shadow banks — have filled the void.

    Whether the process is called a land sale, contract-for-deed, bond-for-title or something else, the idea is the same: While it gives some low-income Americans a path, though long and winding, to homeownership, it can also be a way for investors to profit from borrowers who don't qualify for mortgages.

    Apollo, headed by billionaire Leon Black, started the program in 2014 through the mortgage real estate investment trust, investing more than $40 million to buy and renovate single-family homes.

    Charles Zehren, an Apollo spokesman, declined to comment on the home-selling strategy. On a November conference call with analysts, Michael Commaroto, CEO of Apollo Residential Mortgage Inc., said that he didn't expect the firm's investment to grow until "we get really comfortable with financing."

    "We continue to explore ways to finance these assets in order to enhance the overall return on equity for this program," Commaroto said.

    Documents show Apollo's partner is Baton Rouge, La.-based Home Servicing, whose agreements give buyers few of the privileges they'd have in either a mortgage or a rental contract. George Caballero, Home Servicing's corporate counsel, declined to comment.

    In a mortgage, the buyer gets legal title to the property. In a bond-for-title contract, the seller keeps it. In a mortgage, the buyer can improve her credit score with regular on-time payments. With Home Servicing, it's unclear whether payments are reported to credit companies.

    In a rental, the landlord is obligated to do repairs, pay taxes and maintain insurance. In Home Servicing contracts, the buyer is responsible.

    While the Home Servicing contracts vary by state, dozens reviewed by Bloomberg show the buyer doesn't own the home or claim to the deed until the full purchase price is paid off, as many as 30 years later. In many cases, if the buyer fails to keep up to date on insurance or is more than 30 days late with a payment, the buyer forfeits all money and interest in the property.

    "There are fewer consumer protections that apply to these transactions than to mortgage loans in most states," said Sarah Bolling Mancini, an Atlanta-based attorney with the National Consumer Law Center. "Generally, it's easier to take a property back quickly if the borrower defaults on payments."

    The laws governing the contracts vary by state, and since they aren't mortgages or rental agreements, they fall through the cracks of most federal regulations.

    KKR & Co., run by Henry Kravis and George Roberts, is the main other prominent private equity firm that invests in the business, with an investment of as much as $40 million in New York-based Battery Point Financial. KKR's Kristi Huller declined to comment.

    "The liquidity and reputation risk has scared people off over time, but I think that can change," said Jeremy Healey, who founded Battery Point in 2013.

    Battery Point's approach is different from Home Servicing's. Battery Point said it's working to report monthly payments to credit agencies so buyers may be able to get mortgages if they improve their financial profiles. If the company sells a home following a default, it pledges to only take the remaining amount of money it was owed and refunds the delinquent owner any extra, according to the company.

    Home Servicing has acquired more than 400 houses, mostly in Southeastern U.S. cities such as Memphis, Tenn.; Columbia, S.C.; and Baton Rouge, paying about $4,500 to $100,000 each, according to property records and data from RealtyTrac.

    Home Servicing buys the properties, then markets them for sale. In many cases it assigns the seller's interest back to an Apollo-owned trust, documents show.

    Marie Simpson, a 63-year-old Columbia resident, was introduced to Home Servicing by signs near the home she'd been renting for the past 19 years. "Buy, Don't Rent," they read.

    "The reason we went this route is because I didn't think our credit was up to par," said Simpson, who works for the state's probation and parole department.

    She and her husband agreed in June to pay $106,900 for a three-bedroom house, almost double what Home Servicing paid for it less than a year earlier, according to public records.

    The biggest draw was the down payment of $2,000, she said. The couple will own the house after 30 years of making monthly payments of about $762, according to their contract. The interest rate came to 7.9 percent. For prime mortgages, the rate has been under 4 percent since the beginning of the year, according to Freddie Mac.

    Simpson said she doesn't know what options she and her husband would have if they wanted to move before the 30 years were up, and whether they'd be able to hold on to any equity they'd accrue by making monthly payments. She needs to go back and finish reading the paperwork, she said.

    Simpson's contract, like others in South Carolina, says the agreement can't be recorded in official records of the clerk of court in any county.

    About 3.5 million U.S. households had housing contracts in 2009, according to the Census Bureau. The agency stopped asking Americans specifically about land contracts in the years since.

    A 2012 study on people with the agreements in Maverick County, Texas, showed that 45 percent of them were canceled within a 23-year period, an indication that many residents lost money on the deals. Fewer than 20 percent of the people with contracts ever became full owners of the properties, according to the study by University of Texas at Austin.

    While these types of agreements can sometimes benefit buyers with no other avenues to homeownership, they have a "predatory history," particularly in minority communities, said Sarah Edelman, director of housing policy at the Center for American Progress in Washington.

    "In my experience, about 50 percent of people default or move out in the first year," said Herriage, who's now buying, flipping and renting homes and lending money to real estate investors. "When you look at neighborhoods where this is prominent, most are well below the median home price for that metro area and the person obligating themselves to payments is almost always going to be below the poverty line."

    Since the housing crisis, homeownership continues to be a significant source of wealth. It's linked with increases of as much as $10,000 in net wealth for each year a home is owned, according to a 2013 report by Harvard University's Joint Center for Housing Studies. By contrast, renters generally experience fewer wealth gains.

    Home Servicing advertises the properties on the website Below each house, a caption reads: "Don't waste money on rent. Easy owner financing available! You may be able to own a home even with bad credit."

    The same properties listed on the real estate website are "available on a rent-to-own basis," a process that involves leasing with a legal option to buy, different from the bond-for-title agreements used by Home Servicing. Home Servicing also uses the term "owner financing" on its ads. When Apollo executives talk to investors, they call it "seller financing."

    While Simpson was moving into her new home, she said she discovered the air conditioner was broken and there was no hot water. Even though the agreement was for the home "as is," Home Servicing sent a repairman, she said.

    "There are still things that need to be done, but it takes time," Simpson said. "We knew what we were getting into."

Sunday, April 10, 2016

Central Florida Man Gets 37 Months In Prison For Interfering w/ Interracial Couple's Enjoyment Of Their Housing Rights; Criminal Charges Based On Defendant's Role In Connection w/ Halloween Cross Burning In Front Yard Of Victims' Home

From the U.S. Department of Justice (Washington, D.C.):
  • TThe Justice Department announced that Pascual Carlos Pietri, 53, of Port Richey, Florida, was sentenced to 37 months in prison by U.S. District Judge Susan C. Bucklew of the Middle District of Florida for his role in a 2012 cross burning. He pleaded guilty on June 30, 2015, to one count of conspiring with others to threaten, intimidate and interfere with an interracial couple’s enjoyment of their housing rights.(1)

    “Those who violently threaten others because of racial differences tear at the very fabric of our diverse American society,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The laws that protect our society leave no place for hate crimes.”

    “Cross burning remains a vicious symbol of hatred,” said U.S. Attorney A. Lee Bentley III. “All American families have the right to live where they choose, undisturbed by such racist threats. This prosecution sends a clear message that we will not tolerate hate crimes in our community.”

    According to court documents, on Oct. 31, 2012, Pietri was living with another individual on Seward Drive in Port Richey in a predominantly white community. After an interracial couple moved next door, Pietri heard other neighbors make racial slurs and derogatory statements about African-Americans in general, and specifically the African-American neighbor.

    On Halloween night, Pietri attended a party at a neighbor’s house, where several Seward Drive residents decided to burn a cross in the African-American man’s yard to intimidate him. Using wood and tools from the host of the Halloween party, Pietri’s co-conspirators constructed a wooden cross and obtained gasoline to pour on the cross. Pietri and a co-conspirator then carried the cross to the victims’ front yard, leaned it against their mailbox and set the cross on fire. Pietri and the co-conspirators burned the cross in the victims’ yard in an effort to intimidate the interracial couple.
Source: Pasco County, Florida, Man Sentenced to Prison for Cross Burning.
(1) Generally, the period of incarceration for a conviction on a charge of interfering with the housing rights of another is for no more than one year; however, the incarceration period increases to no more than ten years "if bodily injury results from the acts committed in violation of this section or if such acts include the use, attempted use, or threatened use of a dangerous weapon, explosives, or fire...", and can further increase to as long as a life sentence "if death results from the acts committed in violation of this section or if such acts include kidnapping or an attempt to kidnap, aggravated sexual abuse or an attempt to commit aggravated sexual abuse, or an attempt to kill..." 42 U.S. Code § 3631.

Civil Rights Feds, Fair Housing Testers Shake $130K Out Of Another Landlord Bagged For Allegedly Discriminating By Refusal To Allow Families w/ Children To Live In 173-Lot Mobile Home Park

In Crown Point, Indiana, the Northwest Indiana Times reports:
  • The owner and leasing agent of a Crown Point mobile home park are expected to pay $130,000 to settle a U.S. Department of Justice lawsuit alleging they refused to allow families with children to live at the 173-lot facility.

    The lawsuit, filed in May 2015, alleged that Gentle Manor Estates LLC and John Townsend, the leasing agent for the property, refused to allow families to live at Gentle Manor Estates, 1350 E. North St. The allegations were based on evidence gathered through the Justice Department's Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.

    According to the Justice Department, the corporate owner and agent have agreed to the settlement that still has to be approved by the U.S. District Court for the Northern District of Indiana. Under the terms of the settlement, the defendants will pay $100,000 into a fund to compensate victims of discrimination and an additional $30,000 to the government as a civil penalty.

    In addition, the defendants would be required to implement a nondiscriminatory policy, establish new nondiscriminatory application and rental procedures and undergo training on the Fair Housing Act.
    Shortly after the lawsuit was filed last year, Townsend said the park has always been a retirement community for older adults and contended the alleged violation was a technical one. He also said at the time there were no complaints from the park's residents themselves.

    According to the lawsuit, testers working for the government were told by Townsend that Gentle Manor required all residents to be 40 years old to live at the property and children were not allowed to live there.

    If a housing community qualifies under the Housing for Older Persons Act of 1995 as housing for older persons, it is exempt from the prohibition against discrimination on the basis of familial status, according to the U.S. Department of Housing and Urban Development. In order to qualify, however, at least 80 percent of the housing must be occupied by at least one person 55 or older per unit and the owner must adhere to policies and procedures that demonstrate an intent to provide housing for persons 55 or older.

    Around the time the lawsuit was filed, Townsend contended that 80 percent of the residents were older than 55, but the park's policy allows people 40 and older to rent at the park.

Non-Profit Group, Fair Housing Testers Shake $10K, Othe Non-Monetary Concessions Out Of Santa Clara Landlord For Alleged Discrimination Based On Nat'l Origin; Managing Agent Allegedly Refused To Accept Mexican Forms Of I.D. From Prospective Tenants While Encouraging A Canadian Passport Holder To Apply

From the U.S. Department of Housing & Urban Development (Washington, D.C.):
  • The U.S. Department of Housing and Urban Development (HUD) announced [] an agreement with a Cupertino, California-based property management company, its agents and the owners of a Santa Clara apartment complex to resolve allegations they discriminated against applicants based upon their national origin. HUD alleged that the Salwasser Group, Inc. (doing business as Income Property Specialists) and property owners Gary and Mary Drieger discriminated against prospective renters by refusing to accept Mexican forms of identification, while encouraging a Canadian passport holder to apply for an apartment.

    The Fair Housing Act prohibits discrimination in rental, sales or home lending transactions based on a person’s national origin. This includes discrimination based on a person’s ancestry or country of birth outside the United States.

    “Where a person is from should not influence the housing options that are available to them,” said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “The Fair Housing Act requires property owners to treat everyone equally and HUD will continue to take action when they fail to meet that obligation.”

    The case came to HUD’s attention when Project Sentinel, a fair housing organization based in Santa Clara, filed a complaint after performing fair housing testing that allegedly showed that the owners, through the management company, discriminated on the basis of national origin by refusing to rent, and imposing different terms and conditions regarding government-issued forms of identification.

    According to Project Sentinel’s complaint, the respondents allegedly informed testers who offered a Mexican passport and a Mexican consular identification that such identification would not be accepted, but encouraged testers using a Canadian passport to apply.

    Under the Conciliation Agreement (read here), the owners and management company agreed to pay Project Sentinel a monetary settlement [ie. $10,000]; obtain fair housing training on how not to discriminate; and implement a HUD-approved non-discrimination policy. The owners and manager also agreed to implement a HUD-approved procedure for accepting government-issued forms of identification and post a HUD-approved fair housing poster in the public area of its rental property.

State Civil Rights Commission Files Suit Against Landlord To Enforce Earlier Court Order Prohibiting Housing Discrimination Against Men, Renters In Need Of An Assistance Animal

In Wickliffe, Ohio, The News-Herald reports:
  • The Ohio Civil Rights Commission has filed a lawsuit against a Wickliffe landlord for allegedly engaging in discriminatory rental practices.

    The commission filed suit against Helen Vespe on March 24 in Lake County Common Pleas Court regarding property she owns [] in Wickliffe.

    According to the suit, the Fair Housing Resource Center audited Vespe’s rental practices in July 2010 using testers.

    During those tests … 1) Vespe made a statement that she preferred not to rent to males, 2) set a policy of refusing to allow anyone with an animal assistant to rent one of her apartments, and 3) informed a tester that she would not allow a person with a visual impairment, who required the use of a seeing-eye dog, to rent one of her apartments,” Desmon Martin, director of enforcement and compliance for the Ohio Civil Rights Commission, stated in a 2015 court order.
    Now, the commission is asking Judge John P. O’Donnell to enforce its final order.

    … Respondents engaged in discriminatory conduct by informing testers that they would not make an exception to the no-pets policy for animal assistants, and by Ms. Vespe making statements indicating a preference to rent to women and not to men,” Senior Assistant Attorney General David Oppenheimer stated in the suit.”… Respondents have failed to comply with any of the terms set forth in the commission’s final order.”

HUD Spokesman: Landlord's Blatant Discrimination In Rental Ad Against Prospective Tenants Who Support Donald Trump For President Does Not Violate Fair Housing Act

In Grand Junction, Colorado, The Daily Sentinel reports:
  • For rent: Downtown apartment, 2 bedrooms. Includes organic garden space, hot tub, great backyard. You can bring your dogs if they have references as good as yours. If voting for Donald Trump, do not call.

    Supporters of The Donald aren’t welcome at Mark Holmes’ rental on Main Street, indicated by this advertisement he placed in The Nickel last week.

    The ad prompted some anonymous callers who disagreed with his political statement to leave hate messages on his voicemail.

    His reasoning behind placing the stipulation in the ad is that he doesn’t know what to do anymore about the possibility that Trump might be elected, and he’s just had it.

    “I don’t know what to do anymore about what’s going on in this country,” he said. “It’s just a mess.”

    One of the messages left by an anonymous caller claimed that Holmes was violating federal housing rules and discriminating against political affiliations.

    But that’s simply not true, according to the U.S. Department of Housing and Urban Development.

    That has nothing to do with the Fair Housing Act,” said HUD spokesman Jerry Brown, noting that he hasn’t received inquiries about similar ads. “But that seems to be a first, and it’s original.”

    Holmes said he was inspired to include the stipulation for a few reasons, including the fact that he doesn’t want to share a roof with Trump sympathizers who subscribe to Trump’s rhetoric, which has included controversial comments about banning Muslims from the country, building a wall to keep out illegal immigrants and encouraging violence at his rallies.(1)

    “He’s preaching hate and he’s preaching … a lot of venom, spit and vinegar. And I live in the top part of the house,” Holmes said. “I don’t want anybody that even thinks that Donald Trump can be a good president to live in my home.”(2)
For the story, see No Trump voters allowed (Junction landlord screens renters based on politics).
(1) Even if the Fair Housing Act did prohibit discrimination in the sale or rental of real estate to Donald Trump supporters, the landlord here would probably be in the clear anyway in that he probably qualifies for the so-called "Mrs. Murphy" exemption. Said exemption provides that a home is exempt from the application of the Fair Housing Act if the dwelling has four or fewer units and the owner lives in one of those units. See, generally, The FHA’s “Mrs. Murphy” Exemption — A 50 State Guide.

(2) Ibid.