Saturday, July 16, 2016

Illinois AG Clubs Chicago-Area Landlord With Lawsuit Over Alleged Failure To Properly Address Cracked, Peeling Lead Paint In Apartment; Probe Triggered When Tenant's Young Child Showed Elevated Levels Of Lead In Blood Test; Apartment To Remain Vacant Until County Public Health Department OKs Occupancy

From the Office of the Illinois Attorney General:
  • Attorney General Lisa Madigan filed a lawsuit [last week] against a suburban property owner for violating the Lead Poisoning Prevention Act by failing to fix cracked and peeling lead paint in a Berwyn apartment building after a young child living there tested for high levels of lead exposure.

    Madigan filed the lawsuit in Cook County Circuit Court against Patricia Groves, the owner and landlord of an apartment building located at 1817 S. Grove Ave. in Berwyn, Ill.

    According to Madigan’s complaint, a lead test was conducted in a second-floor apartment of Groves’ building after a child under the age of six living in the apartment showed elevated levels of lead in a blood test. A lead test conducted by the Cook County Department of Public Health confirmed the presence of lead paint in the apartment.

    After being notified of the contamination, Madigan alleged Groves failed to hire a licensed lead abatement contractor and take steps to address the hazard. In conjunction with her lawsuit, Madigan also obtained an agreed interim order that will ensure the apartment remains empty until the owner addresses the lead hazards and receives clearance from the Cook County Department of Public Health to begin accepting tenants. The order also requires Groves to post notice of the lead hazard at all entrances of the building.

    “There’s no reason any child should be exposed to lead paint, but the unfortunate reality is that it remains an ongoing concern and poses very serious health risks,” Madigan said. “This lawsuit will ensure that this defendant immediately addresses the lead paint hazard in her building.”
    The case was referred to Madigan’s office by the Cook County Department of Public Health.
Source: Attorney General Madigan Files Lawsuit Against Berwyn Property Owner Over Lead Paint Hazards (Madigan Also Files Order to Ensure Apartment is Vacant While Lead Paint is Addressed).

For the lawsuit, see People v. Groves; go here for agreed order to keep unit vacant until hazard is abated. epa environmental protection agency

Joint Patrol Of Lead Paint Feds, North Dakota Department Of Health Hits Streets Of Fargo, Bismarck; Shake Monetary Penalties Out Of Three Contractors For Failing To Comply With Rules Regulating Renovation Of Pre-1978-Built Homes

From the Office of the U.S. Environmental Protection Agency (Denver, Colorado):
  • The U.S. Environmental Protection Agency (EPA) has reached agreements with three North Dakota home renovation companies, JH & JH Properties, Clooten Siding & Window, and Buechler Construction, to resolve alleged violations of the lead-based paint Renovation, Repair and Painting Rule (RRP Rule). The settlements are the result of joint inspections EPA conducted with the North Dakota Department of Health in 2015 to evaluate compliance with the rule at job sites throughout Fargo and Bismarck.

    The RRP Rule protects the public from toxic lead hazards created by renovation activities involving lead-based paint and requires the certification of individuals and firms who are involved in these activities. Contractors working on homes built prior to 1978 must test for lead in paint, or presume lead is present, and apply applicable lead-safe work practices to minimize the risk of exposure.

    “Lead-based paint is a significant source of lead poisoning for children,” said Suzanne Bohan, director of EPA’s regional enforcement program. “These settlements reflect EPA’s commitment to take action against companies that fail to take the necessary steps to educate residents and minimize exposure.”

    Under the terms of the settlements, JH & JH Properties (Fargo) will pay $2,000, Clooten Siding & Window (Bismarck) will pay $2,800, and Buechler Construction (Bismarck) will pay $2,100 to resolve alleged violations.

    These include conducting work on homes built before 1978 without being an EPA RRP-certified firm; failure to inform property owners and the public of potential lead hazards; failure to have a properly trained RRP-certified renovator assigned to the project; inadequate records demonstrating RRP compliance; and, the failure to follow lead-safe work practices to minimize potential exposure.
    Despite its ban from the U.S. in 1978, EPA estimates that lead-based paint is still present in more than 30 million homes across the nation.
Source: Contractors fined for not following EPA lead-safe requirements on home renovation projects in North Dakota (Companies resolve alleged violations of EPA’s Renovation, Repair, and Painting Rule).

Go here for Lead Renovation, Repair and Painting (RRP) Rule Frequently Asked Questions.

Go here for the federal Renovate Right brochure that landlords and contractors are required to give to tenants before renovating more than six square feet of painted surfaces in a room for interior projects or more than twenty square feet of painted surfaces for exterior projects or window replacement or demolition in housing, child care facilities and schools built before 1978.

Go here for EPA Lead Paint Renovation Compliance Guide for landlords, property managers, contractors, and maintenance personnel working in homes, schools, and child-occupied facilities built before 1978.

Violations of the lead based paint RRP Rule regulations can be reported to EPA here.

Federal Lead Paint Police Pay Visit To Denver, $queeze Two Contractors For Cash Penalties To Settle Allegations That They Violated Rules Regulating Renovation Of Homes Built Before 1978

From the Office of the U.S. Environmental Protection Agency (Denver, Colorado):
  • The U.S. Environmental Protection Agency (EPA) has reached agreements with two Denver-area contractors, KSK Builders LLC and HomeWrights LLC, resolving alleged violations of the lead-based paint Renovation, Repair and Painting (RRP) Rule. The RRP Rule protects the public from toxic lead hazards created by renovation activities involving lead-based paint and requires the certification of individuals and firms who are involved in these activities.

    Contractors working on homes built prior to 1978 must test for lead in paint, or presume lead is present, and apply applicable lead-safe work practices to minimize the risk of toxic lead exposure.
    According to the first settlement, KSK Builders LLC agreed to pay a $2,000 penalty to settle allegations that the firm conducted exterior renovations on a pre-1978 home in Denver without being an EPA RRP-certified firm and without establishing the required records of compliance with the RRP Rule.

    The second settlement alleges HomeWrights, LLC conducted a renovation, including replacement of windows, on a pre-1978 home in Denver without being an EPA RRP-certified firm, without assigning a properly trained certified renovator, and without establishing the required records of compliance with the rule. The firm has agreed to pay a $9,400 penalty to resolve the alleged violations and has since become a RRP-certified firm.

    The settlements announced [] are part of an ongoing initiative to protect northeast Denver communities from toxic lead paint hazards during home renovations. Most homes in these neighborhoods were built before lead was banned from use in paint products in 1978 and there is a high potential these homes may contain lead paint. The EPA initiative is focused on increasing awareness of the RRP requirements among both contractors and residents, as well as creating a strong deterrent for violators of the RRP Rule.

    EPA has conducted outreach activities and inspected dozens of job sites in the Five Points, Cole, Clayton, Whittier, Skyland and Park Hill neighborhoods since the launch of the initiative in 2015. The agency will continue to assess compliance associated with these inspections and pursue enforcement action when appropriate.
Source: Denver contractors cited for not following lead-safe requirements on home renovation projects (EPA initiative in NE Denver resolves alleged violations of EPA’s Renovation, Repair, and Painting Rule).

Go here for Lead Renovation, Repair and Painting (RRP) Rule Frequently Asked Questions.

Go here for the federal Renovate Right brochure that landlords and contractors are required to give to tenants before renovating more than six square feet of painted surfaces in a room for interior projects or more than twenty square feet of painted surfaces for exterior projects or window replacement or demolition in housing, child care facilities and schools built before 1978.

Go here for EPA Lead Paint Renovation Compliance Guide for landlords, property managers, contractors, and maintenance personnel working in homes, schools, and child-occupied facilities built before 1978.

Violations of the lead based paint RRP Rule regulations can be reported to EPA here.

Massachusetts Environment Police Accuse Property Owner, Son Of Altering, Filling Land In Violation Of State Laws Protecting Wetlands, & Keeping Farm Animals Within 100 Feet Of Brooks That Flow Into Municipal Drinking Water Supply

From the Office of the Massachusetts Attorney General:
  • A Weston property owner and his son have been sued after allegedly altering and filling large areas of protected wetlands, and keeping farm animals in close proximity to brooks that flow into a public water supply, Attorney General Maura Healey announced [].

    The lawsuit, filed in Suffolk Superior Court [], alleges Santo Anza, Sr. and his son Alexander Anza conducted numerous unauthorized activities on the property in violation of the state’s environmental protection laws.

    According to the complaint, the Massachusetts Department of Environmental Protection (MassDEP) inspected the Weston property and observed that the defendants had built a stone wall along the bank of Stony Brook, cleared trees and other vegetation, and filled protected wetlands with rocks, gravel, and wood chips to construct an expanded driveway, livestock grazing areas, and a staging ground for cleaning and dressing animal carcasses, among other violations.

    The complaint further alleges Alexander Anza keeps chickens, geese, cattle, sheep, and pigs in fenced enclosures within 100 feet of Cherry Brook and Stony Brook, which feed into Stony Brook Reservoir, a drinking water resource for the City of Cambridge.

    “We allege that these defendants compromised the integrity of our wetlands and waterways by altering protected areas and keeping farm animals near a public water supply,” said AG Healey. “Wetlands are an extremely important resource in Massachusetts, and no one should alter or destroy them for their own benefit.”

    “Wetlands are valuable natural resources that provide many benefits, including flood protection, species habitat, and natural filtration for drinking water sources,” said MassDEP Commissioner Martin Suuberg. “MassDEP is committed to protecting these valuable resources, and supporting the appropriate prosecution of illegal wetlands alteration and filling activities.”

    With the lawsuit, the AG’s Office is seeking an order requiring the defendants to restore the altered wetlands, remove all animals from within 100 feet of the waterways, and pay civil penalties.
Source: Weston Property Owner and Son Sued for Extensive Alterations to Protected Wetlands (Complaint Alleges Defendants Filled Protected Wetlands; Kept Livestock and Poultry Near Brooks that Flow into a Public Water Supply).

Friday, July 15, 2016

Crackpot Homeowner Responds To Foreclosure Judgment By Recording $2.4 Million Retaliatory Lien On Judge's Real Estate, Filing "Criminal Complaint" Against Him, Legal Staff, Others

In Central Florida, SaintPetersBlog reports:
  • Last year, Judge Thomas Minkoff issued an order that a house owned by Leslie and Martin Armstrong be auctioned at a foreclosure sale.

    That order sparked a legal saga that saw Mrs. Armstrong filing a “criminal complaint” against Minkoff, his legal staff, Wells Fargo and its attorney that alleges they deprived her of her constitutional rights. Mrs. Armstrong alleges that they civil value of the 242 counts in her complaint add up to $2.4 million that she’s owed. Minkoff is a civil court judge in the Sixth Judicial Circuit for Pasco and Pinellas Counties.

    In the latest chapter, Minkoff, who is represented by Attorney General Pam Bondi’s office, filed suit [] alleging that the criminal complaint is full of false representations. He’s asking the court have them expunged from the record and that an injunction be issued preventing Mrs. Armstrong from filing any more “false documents.”

    Neither Minkoff nor Mrs. Armstrong could be reached for comment. But the court documents tell the story.
    “The false documents have adversely affected or will adversely affect Judge Minkoff’s credit and actual or potential interests in real or personal property because of the false appearance of a secured debt or an outstanding lien against him,” the lawsuit reads.

Michigan Man Who Stripped Fixtures From His Home After Foreclosure Sale But Before Redemption Period Expired Dodges Larceny Conviction After Being Charged With Wrong Crime; State Supremes: Defendant May Have Been Guilty Of Some Other Crime, But Not The One That Prosecutor Charged Him With

In Westland, Michigan, The Associated Press reports on a guy who may not have necessarily been innocent of a crime, but was found to be not guilty of the particular charge a prosecutor tagged him with:
  • The Michigan Supreme Court says a Detroit-area man can't be charged with larceny for removing fixtures from his foreclosed home.

    The court isn't defending the practice. But it says Timothy March still had a right to the Westland property during a six-month period when he could have scraped up the money to keep it.

    When the six-month period expired in 2013, new owner John Hamood found many things missing, including cabinets, furnace, doors and hot water tank. March was charged with larceny.

    A judge dismissed the charges, but the appeals court reversed the decision. Now the Supreme Court has dismissed the charges again.

    The court says there still might be other charges that fit. It also says Hamood could file a lawsuit.(1)
Source: No larceny charges after fixtures taken from foreclosed home.

For the court ruling, see People v. March, No. 151342 (Mich. June 23, 2016)
(1) From footnote 1 of the Michigan Supreme Court ruling:
  • Despite the failure of the larceny charge in this case, it is possible that defendant’s actions might properly give rise to alternative criminal offenses. The prosecutor here has indicated a belief that defendant may be guilty of at least two other offenses: embezzlement, MCL 750.181(1), and malicious destruction of property, MCL 750.380.

    We do not here opine on the applicability of either of these, or any other criminal offense, to defendant’s conduct.

    Additionally, a foreclosure-sale purchaser such as Hamood is not without recourse, as he has various civil remedies. One is MCL 600.3278(1), which provides a foreclosure-sale purchaser with the right to pursue damages against a mortgagor who causes injury to the property during the redemption period. Another is the procedure set forth in MCL 600.3237 and MCL 600.3238, which enables the purchaser to inspect the property and institute summary proceedings for possession under MCL 600.5701 et seq. if the person then in possession is damaging the property.

    Moreover, the statute defines “damage” to include “[m]issing or destroyed structural aspects or fixtures.” MCL 600.3238(11)(d). We also emphasize that the analysis in larceny cases such as the instant one relies heavily on the statutory or contractual framework establishing the individuals’ respective rights in the property. The conclusion reached here is consequently limited to circumstances in which the mortgagor retains his possessory rights in the property during the redemption period and does not, for instance, contract them away.

Seven Texas Homeowners Face Felony Charges In Separate Cases For Allegedly Filing Serial Bankruptcy Petitions To Fraudulently Stall Foreclosure Sales Of Their Homes

In Sugar Land, Texas, Sugar Land Patch reports:
  • A federal grand jury indicted [seven Texas homeowners, including] a Sugar Land woman and a Missouri City man for gaming the bankruptcy system.

    Leslie Nicole Breaux, 40, of Sugar Land and Carmen P. Turner, 55, of Missouri City are each charged with allegedly filing multiple bankruptcy cases to keep their homes. Breaux and Turner are accused of engaging in unrelated criminal activity.

    Each time they received a foreclosure notice Breaux and Turner would file a bankruptcy case to obtain an “automatic stay” from the courts, according to the indictments. The automatic stay prevented their creditors from initiating foreclosure proceedings.

    After filing the bankruptcy case Breaux and Turner would allegedly wouldn't file any other documents or submit a plan to pay off their debts to the court. After a 45-day period of no action their cases would be dismissed. When either one of them received another foreclosure notice the process would start all over again.

    They allegedly never made payments to their creditors, failed to disclose previous bankruptcy cases when filing subsequent ones and committed perjury by lying on court documents.

    Breaux and Turner are each charged with bankruptcy fraud and making false declarations under penalty of perjury. If convicted they could face up to five years in federal prison and a fine up to $25,000.
Source: Sugar Land Woman Indicted for Federal Bankruptcy Fraud.

For the U.S. Attorney (Houston) press release, see 7 Indicted for Bankruptcy Fraud:
  • [T]he separate, but similar cases charge Hugo O. Parra, 43, of Cypress; Carmen P. Turner, 55, of Missouri City; LaTasha Riles, 47, of Huntsville; Leslie Nicole Breaux, 40, of Sugar Land; and Jermaine S. Thomas, 40, Angelina Gailey, 57, and Patrick Lee Gailey, 25, all of Houston.

Thursday, July 14, 2016

Pennsylvania Judge Tacks On Add'l 6 To 60 Months To Prison Time Currently Being Served By Sleazy Window Contractor For Ripping Off Homeowners By Pocketing Deposits, Then Stiffing Them Out Of Services; Latest Jury Rejected Scammer's 'It's Not A Crime, Just A Civil Matter' Defense; Charges Remain Pending In At Least Seven Other Counties

In Snyder County, Pennsylvania, PennLive reports:
  • A contractor who has charges of deceptive business practice and theft by deception pending in at least seven other counties, including Dauphin, has been sentenced in Snyder County to up to five years in state prison.

    The sentence of six months to five years imposed [] on Robert Kolovich, 58, will run consecutively to the 11½- to 23-month term imposed in September in Bradford County.

    A Snyder County jury in April had found him guilty of four counts of theft and two of deceptive business practices. The defense contended it was a civil matter, not criminal.

    Senior Judge Louise O. Knight ordered Kolovich, who has charges pending in Centre, Lycoming, Luzerne, Mifflin, Northumberland and Susquehanna counties besides Dauphin, to pay restitution of $11,600.

    He settled charges in Tioga and Sullivan counties and his case in York County is marked inactive.

    Kolovich has been accused in the various counties of defrauding customers of his former Lifetime Choice Windows by signing contracts and accepting down payments but not doing the work or issuing refunds.

    Reasons he provided for not doing the work have included, according to court documents, problems with a supplier, weather, illness and injuries.

    "Kolovich has damaged many, many lives by taking these folks' money without any intention of doing the work he contracted to do for them," Snyder County District Attorney Michael Piecuch said.

    "I'm disappointed that he still refuses to acknowledge any culpability for his crimes, but this sentence will give him time to reflect on that. And he'll be somewhere he can't victimize others."

    Kolovich is awaiting trial in Dauphin County in two cases in which he is charged with theft by deception. He also is charged with deceptive business practices in one of them.

KC Cops Who Refused To Act On Homeowners' Complaints Accusing Convicted Scammer Of Using Forged Deeds To Hijack Their Real Estate ("It's A Civil Matter") Finally Pinch Pilferer When Local Judge Complains That Her Signature Was Forged On Phony Eviction Notices

In Kansas City, Missouri, WDAF-TV Channel 4 reports:
  • The last time FOX 4 Problem Solvers saw Miles Thomas, he didn't want anything to do with us. In fact, he pulled his T-shirt over his head when we tried to film him.

    FOX 4 wanted to talk to Thomas about the homes he's been renting and selling in Kansas City which, according to multiple lawsuits and Jackson County property records, he doesn't own.

    The real homeowners have even called police, hoping to have Thomas arrested. But police say it's a civil matter.

    Until now.

    Thomas is facing felony charges after, prosecutors say, he messed with the wrong person -- an associate judge of the 16th Circuit Court.

    Witnesses say Thomas' troubles began after he put eviction notices on the doors of two tenants, including Deborah and Vernie Burns. The Burns said they quit paying rent to Thomas once they discovered he didn't even own the home.

    "How are you going to evict someone from a property you don't own?" asked Mr. Burns, who was so suspicious of the eviction notice that he showed it to Judge Janette Rodecap, who had supposedly signed it. Burns was told the document was a fake and the judge's signature was a forgery.

    Although Judge Rodecap wouldn't talk to FOX 4 Problem Solvers about the case, she did talk to police. This time, police paid attention.

    "That's when police came by asking all kinds of questions," said Mrs. Burns.

    Thomas was charged with two felony counts of forgery for eviction notices delivered to the Burns home and another home on College Avenue that he claims to own, but actually doesn't, according to court records.

    So how does Thomas rent homes he doesn't own? He just takes them, according to court records. Often the homes are vacant and the owners live out-of-state or even out of the country.
    It won't be the first time Thomas has faced criminal charges. In 2006, he was convicted of real estate fraud and identity theft.

Sleazy Ex-Real Estate Agent Gets Bagged For Allegedly Selling Home He Didn't Own; Victimized Out Of Over $5K, Couple Teams Up With Cops To Sting Culprit

In Cleveland, Ohio, The Plain Dealer reports:
  • Coty Houston and David Yost came across a house they loved on Craigslist. The couple and their five children had outgrown their two-bedroom apartment, and Houston was itching to get away from their old neighborhood that was bustling with drug activity.

    They loved the Brooklyn Centre home listed in the ad as soon as they saw it. When their five kids, ages 2 through 8, began planning what they wanted to do with the four-bedroom home, they knew they had to buy it.

    Their dreams of a new life were shattered when they discovered the man who sold it to them had no right to do so, according to police.

    Matthew Boros, 44, of Strongsville is charged with a fifth-degree felony count of theft by deception. The former real estate agent climbed through a window of the house and posed as the owner in order to scam the family out of more than $5,000, investigators said.

    Boros' real estate license was revoked in April after he failed to apply for renewal. It was suspended a year earlier for the same reason, according to the Ohio Division of Real Estate and Professional Licensing.
    They [] didn't know Boros was previously was convicted in Bedford Heights Municipal Court for a scam that involved renting the same house to two different tenants.
    Houston went to the Second District Headquarters []. She brought payment records and records of a contract Boros had them sign.

    The next day, they called Boros and told them they wanted their money back. Boros said he'd meet them and deliver more paperwork showing them he legally sold them the house.

    When he showed up and refused to return their money, detectives waiting around the corner drove up and took him into custody.

Wednesday, July 13, 2016

Montana Man Accused Of Abusing POA To Pilfer $400K From Wheelchair-Bound, 81-Year Old Senior; Victim's Eviction From Nursing Home For Non-Payment Of Fees Triggers Alert To Authorities

In Helena, Montana, the Independent Record reports:
  • An East Helena man is accused of stealing more than $400,000 from an 81-year-old woman. Authorities say that he used the funds on gambling and fast food.

    Ernest Norman Hughes, 53, faces felony charges of exploitation of an older person and theft by common scheme. Police allege the scamming started in 2003 and continued until recently.

    Authorities were alerted to the situation as the woman was getting evicted for not paying fees at her nursing home. Court documents say Hughes, who met the woman when she hired him to work around her former home and later became friends with her, has power of attorney and controlled her finances.

    An adult protective services worker learned the woman had about $434,000 in her account when Hughes took over her finances in 2003, according to documents. She also received about $1,600 a month. The woman ran out of money to pay for her housing and care in December.

    Last month, police received bank records showing Hughes allegedly wrote a significant number of checks for cash and to casinos. Court documents note the 81-year-old was in a wheelchair and rarely left her residence. Hughes is also accused of using the woman's checks to eat fast food and give money to his relatives.

    Authorities said although some of the checks were written for goods and services for the woman, "there is no accounting for the disappearance of more than $400,000."

Cops: Niece Made False Loan Modification Promises To Rip Off $46K In Mortgage Payments From Unwitting Aunt, Causing Victim To Lose Home Of 27 Years To Foreclosure

In Lakewood, Washington, KOMO-TV Channel 4 reports:
  • A Lakewood family has been torn apart by a suspected mortgage fraud. A Seattle woman is accused of cashing her aunt's mortgage checks instead of paying off the loan, and the aunt believes there are dozens of scam victims.

    Sue Kahawaii and her family had lived in their Lakewood home for 27 years. Now they say they've lost it to foreclosure because of the actions of a loved one, Alicia Shefchik. They say she spent the money on world travel and Super Bowls.

    Shefchik is a former mortgage consultant. She was in Pierce County superior court [] charged with the theft of $46,000 in mortgage payments. They were payments handed over to her by her aunt who traveled all the way from California to be there for the court appearance.
    This all started several years ago when Shefchik went to her aunt and said, "Hey I can rewrite your loan to get a better rate." Kahawaii says that's when the scam all started.

    Instead of placing the cashier's checks into the mortgage account, charging papers say Shefchik spent them on herself.

Tuesday, July 12, 2016

Despite Earlier Jail Time & Huge Civil Judgment, Sleazy Phoenix-Area Real Estate Operator With History Of Running Housing Scams Appears Again On Media Radar

In Phoenix, Arizona, KTVK-TV Channel 3 reports:
  • It's a name that's the subject of our reports several times over – Derek Walker Bollwinkel.

    The Gilbert man with a history of conning people continues to come up on our radar.

    He's done jail time twice in the past for forgery and criminal impersonation. He was busted for forging homeowners' names and renting out their empty homes in foreclosure.

    Just last summer, Arizona Attorney General Mark Brnovich came down on Bollwinkel and his wife, Sydnee, with a $2.1 million judgment for a housing scam they ran on Craigslist. Our undercover cameras caught him in the act.

    One might think jail time and a huge civil judgment would stop Bollwinkel in his tracks.

    But after following him for years, we again find him embroiled in yet another scam involving cons, Craigslist and cash.

    At the center of this latest incident is a run-down old house in Mesa that brought an unlikely cast of characters together. [more]

Houston-Based Real Estate Operator Notorious For Allegedly Burying Onerous Terms Into His "Contract For Deed" Financing When Peddling Homes To Unsophisticated, Credit-Lacking Homebuyers Enters San Antonio Market

In San Antonio, Texas, the San Antonio Express-News reports:
  • Jack Markman, a Houston-based real estate investor accused in lawsuits of pressuring low-income customers into signing property contracts that are designed to fail, has entered the San Antonio market with plans to buy more than a hundred homes in the area.

    He bought three single-family homes on the West Side and one on the East Side last month in a partnership with local mortgage broker Fred Hobbs, county property records show. Markman said he wants to buy between 100 and 200 homes over several years, repair them and sell them “to people who probably wouldn’t qualify for Fannie Mae or Freddie Mac,” the quasi-governmental mortgage companies that own or guarantee $4.8 trillion of the $11.1 trillion U.S. home loan market.

    Markman has been sued at least a half-dozen times in the last 15 years by Houston-area residents who say he deceived them into signing a “contract for deed,” an installment loan that allowed Markman to retain the title to the property until it was paid in full. After signing the contracts, the buyers were hit with unexpected fees that kept them from paying off the principal of their loans, according to the lawsuits.

    The lawsuits allege that Markman’s companies target Spanish-speaking immigrants, negotiating the contracts in Spanish but presenting them in English with terms different from what was discussed.

    The cases were all settled, Markman said, declining to provide further details because the terms were confidential.

    “We settled them because they were a lawsuit, and that’s about it. To litigate something costs a small fortune today,” Markman said in a phone interview. “We’re trying to provide housing for low-income people who can’t get housing otherwise … Real estate is a good investment for these people. We are providers of wealth.”

    Markman said the plaintiffs in the lawsuits represent a small portion of the people who have done business with him and mostly ended up satisfied. Houston-area residents who have signed contracts with him have protested his business practices by showing up at his office with a giant inflatable shark and making payments in pennies, according to the Houston Chronicle.

    Complaints about Markman and other landlords offering contracts for deed spurred the Texas Legislature to pass strict regulations for the practice in 2001 and 2005. Markman said he has stopped offering contracts for deed and won’t offer any in San Antonio.

    “He was just doing what people do who handle those types of loans. They try to get as much as they can, find the violation, flip it and sell it to someone else and do it over and over again,” said Robert Sohns, a retired lawyer for Lone Star Legal Aid who won a case against Markman and said he resolved many other complaints against him outside the courtroom. “People think they’re buying; they are, but the odds of finally getting those deeds are slim.”

    Sohns added that “it’s not that unusual to happen in this state... He was not the worst offender.”

    Markman, who says he has been operating in the Houston real estate market for 48 years, said he plans to sell houses in San Antonio with what he described as his typical financing arrangement: a 30-year mortgage with 9.99 percent interest and 3 percent down.

Monday, July 11, 2016

Owners Of Denver-Area Title Insurance Agency 'Abruptly Announce Their Retirement' After Employee Blows Whistle To State Regulators On Firms' Financial Irregularities; Bank Flags As Many As 30 Real Estate Deals That Were Closed With Rubber Checks Amidst Allegations That $600K+ In Escrow Money Went AWOL

In Denver, Colorado, The Denver Post reports:
  • The mother-daughter owners of a pair of Cherry Creek title insurance companies that abruptly closed last month are under investigation over allegations that more than $600,000 is missing from client escrow accounts.

    The state has suspended the licenses held by Elizabeth Newell-Williams, 63, and her daughter, Michelle Hernandez, 43, while investigators unravel transactions between more than a dozen different bank accounts the pair used to run Foresight Title and Williams Title and Escrow Company.

    The orders of suspension issued by the state Division of Insurance provide the first details of how the two businesses for months maneuvered millions of dollars between the various bank accounts in order to give the appearance that all was well.

    In reality, however, the bank handling the accounts flagged as many as 30 different real estate transactions that couldn’t be properly closed because of insufficient funds in the accounts, division documents show.

    It’s unclear how many additional transactions were impacted in the scheme.

    Title companies typically hold millions of dollars in escrow. The money is used to pay for final water and utility bills or other costs after closing, including paying mortgage balances.

    Neither Hernandez nor Williams could be reached for comment.

    The two companies were underwritten by Alliant National Title Insurance Company in Texas. A spokeswoman for the company refused to offer any details of the investigation.

    State regulators first learned of the money problems in April when an employee at Williams Title told them of the irregularities.

    The unidentified employee, who had worked as a sales and marketing person soliciting title business for about six months, “had serious concerns about the business practices … especially the handling of escrow funds,” the suspension paperwork shows.

    The employee told investigators she was aware of at least two instances where escrow accounts didn’t have enough money to pay off a mortgage the company was closing the sale on. Mortgage payoffs can often run into the hundreds of thousands of dollars, or much higher for pricey homes, such as those near Cherry Creek.

    The employee told investigators that the owners and a company bookkeeper “were aware of problems with account shortages … and that … if the shortages were discovered, they would be in trouble.”

    Several consumers have since complained to regulators about checks they received as part of the closing process, which later bounced.

    Investigators have pegged nearly 40 bank transfers that co-mingled more than $2 million in the companies’ accounts, the suspension orders show.

    Alliant auditors have told investigators they’ve identified more than $500,000 in shortages in Williams Title accounts and an additional 100,000 in Foresight accounts.

    State insurance regulators would not discuss any details of the ongoing investigation.

    State incorporation records show Foresight was formed in 2014 by Hernandez, who also was chief operating officer at Williams Title under the name Michelle McCollum, according to that company’s website.

    Hernandez and her mother co-founded Williams Title in 2004 in the basement of Williams’ home.

    Williams Title announced on its website that the principals were retiring and offered no explanation for the closing.

    Both women had filed for personal bankruptcy at one time, federal bankruptcy record show, but neither company nor its ownership appeared to have any recent history of financial troubles.

    Title companies can quickly run into financial trouble with millions of dollars floating between dozens of transactions. In the most recent example, in 2014, American Title Services was forced into bankruptcy when its owner, Richard Talley of Aurora, committed suicide with a nail gun after years of misappropriating more than $2.8 million of company funds was discovered.
Source: $600,000 missing from escrow accounts of Cherry Creek title companies (Owners licenses suspended while state investigates allegations of misappropriation).

Irregularities, Phony Bidders Continue Unabated At Central Florida Condo Lien Foreclosure Sales Involving Property Controlled By Rent-Skimming Real Estate Operator

In Tampa, Florida, the Tampa Bay Times reports:
  • Several times this year, a woman with the intriguing name of Sadie Daiquiri has been the winning bidder at Tampa Bay foreclosure auctions.

    Daiquiri has an intriguing address, too — 1 Dag Hammarskjold Plaza in New York City. That's a 49-story tower near the United Nations headquarters that houses the permanent missions of France, Italy and several other countries.

    But it turns out that there is no Sadie Daiquiri in Manhattan, or anywhere else. So it wasn't totally surprising that she defaulted on the bids, failed to pay up and forced the auctions to be rescheduled.

    Daiquiri is one of three phony bidders whose names have repeatedly popped up at bay area foreclosure auctions — all involving houses linked to a Tampa company called HOA Problem Solutions. By walking away from their bids, they've enabled HOA Problem Solutions to continue to collect thousands of dollars in rent from houses facing foreclosure even while the company is under investigation by Attorney General Pam Bondi's office.
    HOA Problem Solutions, which still has an active website, is run by Jimmy Chancey and his uncle Michael Chancey. They did not return calls for comment.

    Over the past three years, HOA Problem Solutions has gained control of dozens of Tampa Bay houses that face foreclosure because the owners are delinquent on their homeowner association fees. Associations depend on the fees to maintain and upgrade pools, walkways and other common areas. When the owners don't pay, the association can foreclose through a process that allows it to recoup the amount of the delinquent fees.

    Typically, HOA Problem Solutions pays the homeowner anywhere from a few hundred to a few thousand dollars to deed over the property. Then the company can rent the house back to the owner or find another tenant until the house is set for sale at a foreclosure auction.

    If the winning bidder doesn't pay up, the sale has to be rescheduled. The association can't recoup the delinquent fees but HOA Problem Solutions can continue collecting rent.

    Bidding under fake names is relatively easy today because all four bay area counties — Hills­borough, Pinellas, Pasco and Hernando — have moved to online auctions that work like this: A bidder creates an account with a username and password and makes a deposit equal to 5 percent of the anticipated bid amount, payable by electronic check, wire transfer, cashier's check or cash.

    Winning bidders must pay the balance by 4 p.m. the day of the sale. If they don't pay up, they forfeit the deposit.
For more, see Sadie Daiquiri and other phony foreclosure auction bidders are profitable ploy for Tampa company.
(1) Assuming there is an existing prior mortgage that is in default at the time of the foreclosure sale, the perpetrators of this racket could be treading on potentially felonious ground.

Continuing to pocket the rent on a property leased to another while stiffing the mortgage holder on its loan payments is loosely referred to as rent skimming, or equity skimming. In the state of Florida, whether or not this practice rises to the level of a crime will depend on, among other things, how frequently the suspect engages in this practice, and who is getting screwed over. See Sec. 697.08, Florida Statutes:
  • 697.08 Equity skimming.—

    (1) It is unlawful for any person, with intent to defraud the owner of real property, to engage in equity skimming, which is, to:
    (a) Purchase, within a 3-year period, two or more single-family dwellings, two-family dwellings, three-family dwellings, or four-family dwellings, or a combination thereof, that are subject to a loan that is in default at the time of purchase or within 1 year after the time of purchase, which loan is secured by a mortgage or deed of trust;
    (b) Fail to make payments under the mortgage or deed of trust as the payments become due, regardless of whether the purchaser is obligated on the loan; and
    (c) Apply, or authorize the application of, rents from such dwellings for the person’s own use.
    (2) A violation of subsection (1) constitutes a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
Rent/equity skimming may also be illegal in other jurisdictions. See People v. Phelps, 837 P.2d 755 (Colo. 1992), quoting with approval from United States v. Capano, 786 F.2d 122 (3d Cir.1986):
  • "Equity skimming is the practice of diverting revenues generated by mortgaged property in default to purposes other than property maintenance or mortgage payments."

Sunday, July 10, 2016

Texas Legal Aid Non-Profit Leads Charge In Lawsuit Alleging That Austin Landlord Used High-Pressure, Deceptive & Otherwise Illegal Practices To Unceremoniously Boot 23 Low-Income Tenants From Their Apartments; $200K To $1 Million In Damages For Emotional Distress, Etc. Sought

In Austin, Texas, the Austin American-Statesman reports:
  • Twenty-three people sued their former landlord for what they called deceptive practices that forced them to leave their East Austin apartments to expedite the sale of the land to a technology company that plans to build its new campus there.

    The lawsuit, filed by former residents of the Lakeview Apartments in Travis County state District Court, accuses Cypress Real Estate Advisors of terminating leases early, failing to make health- and safety-related repairs for months, unlawfully locking residents out of their units and making false representations to pressure residents to leave before they had to.

    “In their rush to make millions on the sale, defendants intentionally misled tenants, put tenants through undue hardship, discriminated against tenants, and created an environment of fear and anxiety to induce tenants into leaving,” the lawsuit reads.
    The plaintiffs are seeking between $200,000 and $1 million in damages for loss of past wages and emotional distress. The plaintiffs also ask for damages from fraud, malice and gross negligence, and seek the payment of their attorney fees.

    In December, Cypress sold the land for an undisclosed price to Oracle Corp., which will build part of its new 27-acre campus on the land that formerly housed the Lakeview Apartments, west of South Pleasant Valley Road near Lady Bird Lake. Oracle wasn’t named in the suit.
    In June 2015, the lawsuit said, apartment residents received a notice that said the complex would be demolished and management wouldn’t renew leases. In August, tenants received another note that said all residents had to be out of the complex by Sept. 30.

    Some residents had leases that extended beyond that date, the lawsuit said, including some that ran through the end of that year. The suit alleges that residents were forced to sign “releases” of their unexpired leases “with no consideration or explanation” and were threatened with bad tenant references if they didn’t comply.

    They were also told their electricity and water could be turned off and were refused repairs on air conditioning, heaters, stoves and refrigerators, the lawsuit said. They were also denied extermination of pests, the lawsuit said.

    The plaintiffs allege the landlords used policies that discriminated against people based on race, color and national origin. The apartment complex was home to a large group of Latino residents who had trouble communicating in English as well as a family of Rwandan refugees who don’t speak English and, the lawsuit alleges, were forced to sign papers they didn’t understand.

    On Sept. 30, the landlords taped a note on the on-site office door window that read “Closed for Eviction Hearing” and told some plaintiffs they would be kicked out of their homes at midnight if they didn’t move out that day, the lawsuit alleges.

    In October, the landlords began filing evictions against residents regardless of when their leases expired, the lawsuit said, unless they had been granted an extension.

    Several months later, former residents are still recovering from the hardship of being displaced, according to a news release by Texas RioGrande Legal Aid,(1) which is representing the plaintiffs. Residents who found new housing saw an average increase of $240 per month to their living costs, the group said.
For more, see Lakeview Apartment tenants who had leases terminated file suit.
(1) Texas RioGrande Legal Aid is a non-profit organization that provides free legal services to low-income residents in sixty-eight counties of Southwest Texas, and represents migrant and seasonal farm workers throughout the state of Texas and six southern states: Kentucky, Tennessee, Alabama, Mississippi, Louisiana and Arkansas.

St. Paul-Based Non-Profit Public Interest Lawyers Lead Battle Alleging Sneaky Landlord Sold Mobile Home Park Out From Under Lot-Leasing (& Now-Eviction-Facing) Homeowners Without First Giving Them Opportunity To Match Buyer-Developer's Offer As Required Under State Law

In St. Anthony, Minnesota, Minnesota Public Radio reports:
  • Over the course of a month, the residents of the Lowry Grove mobile home park have gone from thinking they'd lost their homes, to thinking they'd saved them, to thinking they'd lost them again. Now, the future of their homes is in the hands of the court.

    Lowry Grove, which is located across the street from northeast Minneapolis in St. Anthony, Minn., has almost 100 mobile homes parked on its 15 acres. When residents received a letter in April, saying the land beneath their homes would be sold to a developer, many thought that was it: Time to pack up. Move on. Find a new park, or a family member to crash with.

    But some residents refused to accept that — and they tried to use a little piece of state law to keep the park open. A Minnesota statute says residents have the right to match a buyer's offer, if the buyer intends to close the park. So: If they could raise the funds, they would have the chance to buy the park themselves and keep Lowry Grove in operation.

    It's never been done before in Minnesota, and it was daunting: The residents would need to come up with $6 million of financing in just 45 days.

    But in an 11th-hour move, the residents thought they just might have pulled it off: On the afternoon of Day 44, Aeon, an affordable-housing nonprofit, submitted a purchase agreement to the park's owner on behalf of the residents.

    For Lowry Grove homeowners like Antonia Alvarez, who had helped to organize the park-saving effort, it seemed like a reprieve. Aeon planned to purchase the park and keep it open.

    Alvarez and her neighbors gathered on her porch that Friday afternoon to hug and share the news and let out a breath they'd been holding all spring. They planned to meet again that Monday evening to really celebrate — Monday was also Alvarez's 46th birthday.

    But by 11 on Monday morning, the park's owners had rejected Aeon's offer and sold the land to Continental Property Group, based in Wayzata. Traci Tomas, the president of Continental, signed the closing documents to purchase Lowry Grove.

    Tomas had heard about the last-minute effort for the residents to buy the park, she said, and her legal team advised her to move forward. "In my mind, I had an agreement, and I needed to close today — and I closed today," Tomas said that afternoon.

    But Aeon and some of Lowry Grove's residents are now questioning the legality of that sale.

    "The residents and [Aeon's] legal advisors believe that what the seller and buyer of Lowry Grove did to close on the sale was illegal," said Alan Arthur, Aeon's executive director.

    Phil Johnson, the previous managing partner of the park, was unavailable for comment.

    After purchasing the park, Continental sent an official park closure notice, required by the state, to residents. It gives residents nine months to vacate. They will need to move their homes to new parks, or, in the case of structures that are too old to move, leave them behind entirely to be demolished.

    Alvarez and many other Lowry Grove residents still aren't ready to accept that fate.

    [Last] week, Aeon's legal team and the nonprofit Housing Justice Center(1) filed a lawsuit against the park's original owners, Lowry Grove Partnership, LLP, and The Village, the company Continental established to redevelop the park.

    The suit claims that the original owners had a legal responsibility to accept Aeon's offer, and that the park closure notice that Continental sent out was invalid.

    The Lowry Grove struggle is representative of a larger issue statewide, as mobile home parks close, taking affordable housing stock with them. According to a report from the Metropolitan Council, no new parks have been built in the state since 1991, and ten have closed.
For more, see Future uncertain, residents file lawsuit to keep mobile home park open.

In a related story, see One resident's $6 million, Hail Mary plan to save her mobile home park.
(1) The Housing Justice Center (formerly known as the Housing Preservation Project) is a nonprofit public interest advocacy and legal organization whose primary mission is to preserve and expand affordable housing for low income individuals and families.

Mobile Home Park Landlord Falls Into Foreclosure, Leaving Lot-Leasing Homeowners In The Lurch, Fearful Of Relocating, Facing The Boot; Moving Aging Double-Wides Not An Option For Most; Lack Of Funds Makes Buying Another Home Elsewhere Unlikely

In the town of Johnstown, New York, The Leader-Herald reports:
  • Over a dozen residents in the Deer Creek mobile home park are confused and fearful of relocating after receiving a summons from Trustco Bank on June 16.

    Jacqueline Leto owns the property on 566 W. Fulton St., which is getting foreclosed upon.

    According to the summons, Leto owes thousands of dollars in debt to her mortgage, Nathan Littauer Hospital, Capital One, National Grid and several others. Tenants were notified of the foreclosure and depending on their rent or own status have months to relocate.

    There is no estimate to how long the foreclosure process will take.

    Abbey Wilson, a 17-year resident, who owns her double-wide has called several banks who say they won't finance moving a home that is over 15 year old. "We had no idea this was coming," she said.

    Many residents don't have the funds to purchase a new property or manufactured home.

    Wilson said there are 19 homes in the park, three of which are occupied by Leto and her two sons. Two of the homes are unoccupied. Wilson estimates that eight families own their double-wide.

    "A lot of these people are retired veterans, single parents, and there's a child that's deaf and another child with special needs. Most of them [the homes] hit the 15-year mark," Wilson said.

    Wilson said outdoor lights in the park have been shut off and the water gets shut off frequently when Leto declines to pay the bill.

    "The bank is saying that we will have to move our houses in six months, which we own, or they will tear them down," Wilson said.
    "What do you do with a double-wide home when you have no place to go," [resident Renee] Gagne asked. "A majority of us own our mobile homes," he said. "If they are going to get me out of my house, it's going to be a lot. I have no place to go. I'm almost 70-years-old."

    The Town Board could not assist and advised residents to seek an attorney.

Water Shutoff After Mobile Home Park Operator Stiffs City On $4,500 Bill For Services Creates Unsafe, Unsanitary Conditions, Says City Official; Triggers Boot For Park Residents

In San Antonio, Texas, KSAT-TV Channel 12 reports:
  • The clock's ticking for people living in a northeast side mobile home park after the city issued a notice to vacate [].

    Residents received their notice after their water was shut off yet again. KSAT-12's been covering the issues at 811 Corinne Drive since 2012. San Antonio Water System cut off services to the property in March, April and June this year for lack of payment from property owner Joseph Sandoval.

    A SAWS spokeswoman says Sandoval owes $4,500 and the last check posted as payment to the account bounced.

    "I'm pissed," resident Lisa Johnson said. Johnson and few others held out hope that things would get better.

    "He was out here about a month ago and he made promises to all the tenants and everyone saying 'I'll make sure I pay it on time' and everything and apparently he's not."

    "It's been six months almost he hasn't paid me," former park manager Pat Molina said. Her family is in the same boat as many of her former tenants.

    "It's not safe. It's not sanitary without running water," the city of San Antonio Development Services Director Rod Sanchez said about the mobile home park.

    Sanchez said Sandoval has been fined a total of $1,200 for four civil violations.

    "Now that the park's been vacated we can take our time, we can file a criminal case against him. If we're successful, which I believe we will be, he'll have a criminal record for not doing the right thing," Sanchez said.

    The city's Department of Human Services is working with each Plaza Mobile Home Park household.

    Assistance varies from help with deposits, first month's rent, storage services and utility assistance at their new homes. Case workers are developing transition plans for the families affected.
Source: City issues vacate order for Plaza Mobile Home Park (Water shut off in March, April, June).

Unsuspecting Renters In Illegal Boarding House Expecting To Have 30 Days To Vacate Instead Get 48 Hours To Take A Hike Or Get Pinched On Trespassing Charges; City's Attorney: This Involves Illegal Occupancy, Landlord-Tenant Rules Don't Apply When Giving Residents The Boot

In Kingston, New York, the Daily Freeman reports:
  • The tenants of a West Chestnut Street home that’s been declared an illegal boarding house were given a little extra time [] to vacate the premises, though some said they deserved a full month to pack up and leave.

    The city’s attorney, Corporation Counsel Kevin Bryant, said [] that Mayor Steve Noble wanted to be sensitive to the tenants and handle the situation in the most considerate way possible. He said the tenants were being given a bit more time than originally planned to clear out and that none would be ticketed Tuesday for trespassing. The city will, however, follow up on Wednesday, Bryant said.

    State Supreme Court Justice Henry Zwack sided with the city Zoning Board of Appeals in ruling the building at 106 W. Chestnut St. could not be used as a boarding house. The city, in turn, served the tenants on Monday with notices that said they had to be out by 10 a.m. Tuesday. Later in the day, though, a sergeant with the Kingston Police Department went to the house and told the remaining tenants they had until 4 p.m. to leave or face trespassing charges.

    The zoning board last December upheld a decision by the city Building Safety Division that the boarding house used was not allowed. Tri-Serendipity LLC, which owns the property, then sued the city, leading to Zwack’s ruling.

    Tri-Serendipity principal Joseph Sangi was ticketed Tuesday afternoon for failing to comply with the order to cease operating the boarding house, Bryant said.

    Some tenants expressed concern Tuesday about not being given more time to vacate the home. They questioned why, as tenants, they were not given 30 days’ notice before being evicted.

    Bryant said the 30-day rule doesn’t apply because “this isn’t a landlord-tenant issue. This is illegal occupancy.”
    Sangi said [] that the house has been operated as a boarding facility for more than 60 years. And though the general public thinks the house is in deplorable condition, everything is “beyond up to code,” he said.

    Sangi, who plans to appeal Zwack’s ruling, said his problems with the city began when he was denied an operating permit for the house, followed by Kingston withholding its safety reports about the property despite finding no violations. He said the city then denied him the ability to get a variance or a special-use permit to operate the boarding house and denied him a building permit to complete renovations.

    The property was a boarding house in 1963 and should be grandfathered in under the city’s zoning code, Sangi said.