Saturday, November 12, 2016

Despite Claims That Legal Notice Was Never Received, Homeowner Evictions In Detroit-Area Tax Foreclosures Move Forward

In Wayne County, Michigan, The Detroit News reports:
  • Families who sued Wayne County and several suburban cities last year over what they called illegal tax foreclosures are now being evicted after losing several court cases.

    Among them is a Lincoln Park woman who says she lost nearly all her belongings [], when she was evicted her from her home while she was at work. Her attorney, Tarek Baydoun, said she should have been notified that a court hearing was held to issue an eviction order and that once it was posted, she should have had 24 hours’ notice to leave.

    “The feeling is like you are totally broken,” said Brandy Gutierrez, 32, who added she found her locks changed and a mound of her possessions on the curb.

    She is among the 18 families who sued the Wayne County Treasurer’s Office in December in U.S. District Court to stop their evictions. They allege they didn’t receive foreclosure notices and in some cases were told by county officials they had more time to save their properties. The county sold the homes to suburban communities, including Lincoln Park and Garden City, which resold them to developers to fix.

    Treasurer Eric Sabree maintained his office followed the law and that many homeowners were foreclosed when they missed payments.

    The evictions were on hold while courts considered the cases. U.S. District Judge Judith E. Levy dismissed the case in September in part because she said she didn’t have jurisdiction. Separately, several Wayne County judges upheld the evictions.

    At least four of the 18 have been evicted, said Baydoun, who represents the families and is appealing Levy’s ruling.
    Allegations of botched foreclosure notices aren’t new to the county.

    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.

    The Detroit News obtained records of certified mailings through the Freedom of Information Act and sampled 1,000 of the 333,000 sent by one contractor in late 2014. More than half were still listed in the U.S. post office's tracking system as “in transit,” The News found.

    County officials acknowledged they haven’t always received proof from the post office that a person signed for the letter or that delivery was attempted, but said there was no evidence the post office didn’t try to deliver the letters.

Over 300 Residents Get The Boot After Condo Association's Failure To Pay $1+ Million In Utility Bills Results In Power & Gas Shut-Off; Local Officials Declare Premises Uninhabitable, Give Tenants 24 Hours Notice

In Temple Hills, Maryland, WTTG/WDCA-TV Channel 5 reports:
  • As temperatures continue to drop, hundreds of Temple Hills residents remain in the cold after a condo association failed to pay more than $1 million in utility bills. Because of this, power and gas have been shut off and are forcing these tenants to find other places to live.

    In all, 77 families and more than 300 people in all are being forced to leave as the building was declared inhabitable. Prince George’s County Fire Chief Marc Bashoor said the Lynnhill Condominiums has been placed under a fire watch. Bashoor said that emergency crews will conduct regular inspections of the premises until power is restored. On Wednesday night, firefighters headed inside because of a strong smell of gas and a possible gas leak. Eventually, an all-clear was given.

    Many residents remained in their homes at the complex overnight from Tuesday to Wednesday despite being told by authorities to vacate. Bashoor said that he is aware of the order to leave, but says his crews will be on the safe side.

    "We’re going to make sure, that as long as people are here, we're doing everything we can to keep them safe and make sure we're continuing that fire watch to make sure that if something happens, we're on top of it," he said.

    A letter of intent was given to tenants on Monday saying that service would be terminated Tuesday due to a lack of payment. At around 1 p.m. on Tuesday, the power was officially turned off.

    “It is sad because there are a lot of families with young kids live in this building, and I know everybody is not going to have the resources to just get up and move,” said Lynnhill resident Macobi Washington.

    Her family, which includes her 3-year-old and 8-month-old granddaughters, is one of many that have no place to go.

    “Who can just get up and move tomorrow and already have something planned?” said a frustrated Washington. “It’s only been two days when we found out that the electric was off.”

    Agencies such as the American Red Cross and churches are helping with temporary shelters. Prince George’s County’s Department of Social Services is also trying to help with short and long-term plans for the residents. The community has been trying to step up as well with food and clothing donations and free services from moving companies.

Collapsing Ceilings & Walls, Mold & Safety Issues, Condemned Structures Make For Grim Prospects For Tenants At 40-Acre, 35-Building Apartment Complex; Property Manager, Out-Of-State Landlord Face Criminal Citations, Foreclosure On Defaulted $17.6 Million Mortgage While Remaining Residents Continue To Pay Rent

In Millcreek Township, Pennsylvania, the Erie Times-News reports:
  • Money, and not having enough of it, is what Denise Little says has kept her from already moving out of Granada Apartments.

    The 52-year-old home hospice health aide has been a tenant in the troubled Millcreek Township complex for two years. Her one-bedroom apartment is in rough condition, with mold buildup in the bathroom, and a chunk of soggy ceiling in her living room she fears will soon crash down.

    Six buildings at Granada Apartments, including one office building, have been condemned by fire officials since late August after the township started a complex-wide inspection following a balcony collapse at 5957 Jodie Lane in June that injured five people.

    The buildings were condemned due to water damage, fire risk and mold issues, and collapsed ceilings and walls.

    This Friday, at three of those buildings, residents in 20 occupied apartment units will have until 4 p.m. before they become officially displaced. Some of the tenants have already been relocated to other buildings in the 40-acre Granada complex, township officials said, while others have moved in with relatives, friends or gone elsewhere in the area.

    Little's building, at 1503 Sunrise Lake Drive, is not one of the six condemned structures. "But it sure should be," she said.

    The fate of Granada Apartments — a complex largely built in the 1970s and 1980s — and its tenants will continue to play out this week and until the end of the year: both at the Millcreek property and in a foreclosure case in Erie's federal court.

    Residents at 1683 Treetop Drive, 1693 Treetop Drive and 1702 Penelec Park Drive have to be out of the condemned buildings by Friday.

    The property manager, Granada Apartments LP, has until Nov. 28 to either demolish the three structures or significantly rehabilitate violations discovered in code enforcement inspections, said Matt Exley, Millcreek's chief fire inspector and emergency management director.

    Exley has been down this road before with Granada Apartments.

    The building at 1655 Penelec Park Drive was ordered condemned by the township on Aug. 24 for code violations, the first of six condemnations over the past two months.

    Exley said Granada Apartments LP and the Clover Group, the complex's owner in western New York, have missed deadlines set by the township indicating whether they would tear down the structure at 1655 Penelec Park Drive, or rehab the building and fix the code enforcement violations.

    Summary criminal citations are pending against the complex's owner and property manager, Exley said. "The township will eventually be in a position where we will tear down the (condemned buildings) and put a lien on the property to recover the costs," Exley added.

    Millcreek Township also has ordered Granada management to demolish the building at 1690 Treetop Drive, which has been condemned and is at risk of collapsing. Exley said Granada has until Dec. 22 to tear down the structure or the township will file additional summary criminal citations.
    Exley said during the township's inspections of roughly 700 apartments in 35 buildings in the Granada complex, "people told us they see inadequate maintenance on a daily basis." Exley did not have figures for the number of tenants in the complex.

    Forty-five units in the five condemned buildings combined were occupied. The Greater Erie County Chapter of the American Red Cross and the Erie Home Team, which addresses homelessness, offered assistance to some residents, helping them find other places to live. Officials believe no tenants displaced are currently homeless.

    Exley said most of the problems in the condemned buildings occurred in unoccupied or abandoned apartments.

    In addition to the code violations, Granada Apartments is embroiled in a mortgage foreclosure lawsuit in U.S. District Court in Erie.

    U.S. Bank sued for foreclosure on Sept. 16, claiming the Clover Group, Granada's Buffalo-area owner, had defaulted on a mortgage with a principal balance of $17.6 million. [...] Granada remains in business, and continues to collect rent.

    Little, of Sunrise Lake Drive, said she hopes to move out of Granada Apartments at the end of January when her one-year lease is up.

    She said she would have moved sooner, but is locked into paying her $520 monthly rent for November, December and January.

    "I don't have a choice. I don't have the money for rent here, and for rent and a security deposit at a new place," Little said. "Soon it will be February, and then I'm out of here."

Failure To Modernize Faulty Elevators Causes Concern Over Possible Emergencies For Tenants In 8-Story Section 8 Housing Complex For Low-Income Elderly & Disabled Persons

In Weston, West Virginia, WDTV-TV Channel 5 reports:
  • So-called consistently broken-down elevators have some residents at a Weston apartment building worried. The subsidized housing is home to many with disabilities. They fear if an emergency happens and the elevators aren't accessible they won't be able to get out of the building.

    Mason Herrald lived at Weston Arbors for six years and says every time one or both elevators were repaired they'd just break down again. He says his friends who are disabled and can't get up and down stairs are trapped in their apartments when this happens.

    "Time is essence when there's an emergency such as a heart attack or a breathing condition," Herrald said.

    Herrald fears the eight-floor, project-based section 8 housing designed for elderly and disabled people won't always be so lucky as to not have an emergency when the elevators are down. He worries about his friend who's a veteran and had a knee replacement last week and the woman he knows who has a heart condition, struggles with obesity, and is in a wheel chair.

    "It would be terrible if she were to have a heart attack," he said. "It would be difficult to extract her from that building, take her down four or five flights of steps. And by the time that were to happen..."

    One resident brings up the people he knows who have trouble breathing and rely on the elevators. This man is frustrated too and fears for his neighbors' safety. He doesn't want to be named.
For more, see So-called recurring elevator problems worry friends of disabled apartment residents.

Editor's Note: The landlord may be setting himself up for a fair housing lawsuit in this case if reasonable accommodations for tenants with disabilities are not provided for. See, for example:

City Not Immune To "Slumlord" Charges, Catching Heat For Failing To Replace Faulty Boiler, Provide Heat & Hot Water (Among Other Things) To 90+ Tenants In One City-Owned Harlem Apartment House

In New York City, DNAInfo (New York) reports:
  • For the past month or so, 81-year-old Beatrice Hunter has woken each morning in her drafty Central Harlem home and boiled water.

    With temperatures beginning to drop, Hunter says she needs the water to bathe since her city-owned apartment building at on West 140th Street has been without heat and hot water due to a broken boiler.

    “I can’t even tell you when I’ve been in my bathtub,” she said.

    Hunter’s story is among those of more than 90 tenants who live in the building which is part of the city’s Housing Development Fund Corporation ["HDFC"], a program designed to give low-income tenants an opportunity for home ownership.

    For months — and in some cases years — residents at the city-owned apartment building say they’ve faced “life-threatening” living conditions due to lack of inspections and repairs by the city. They include “rampant mold,” mice, bed bugs, no heat or hot water.

    The city Department of Housing Preservation and Development, which oversees the building, provided 70 sleeping bags to the tenants in the building, which many thought was offensive and insensitive.

    Hunter, who suffers with arthritis and shingles, said she has had to get down on her hands and knees to plug mouse and rat holes. “This is shameful,” Hunter said. “I don’t think I’m supposed to live like this.”

    Jean Hockaday-Leslie, 70, who's home-bound and disabled, uses her oven to heat her apartment and has family members help boil water.

    The city, residents said, has not heeded their concerns to replace the boiler, but instead carry out small repairs that cause it function infrequently.

    “This is criminal,” said Elsia Vasquez, the founder of tenant advocacy group Pa’Lante. Vasquez said the city is yet another “slumlord” for letting the conditions of the building persist.
    The building is one of 1,200 buildings with more than 30,000 HDFC units across the city, with many in neighborhoods such as Harlem and the Lower East Side. An estimated 27 percent of HDFCs are in poor shape physically or financially, according to city data.

Friday, November 11, 2016

Short Sale Fraud Racket Among Bad Acts Landing Two Real Estate Agents 37 Month Prison Sentences; Unwitting Lenders Duped Into Taking 'Haircuts' On Loans Secured By Underwater Homes While Original Owners/Borrowers Remained In Possession Of Properties

From the Office of the U.S. Attorney (Sacramento, California):
  • Lillian Marquez, 41, of Stockton, was sentenced [...] to three years and one month in prison for conspiring to commit mortgage fraud, Acting U.S. Attorney Phillip A. Talbert announced.

    Marquez pleaded guilty on June 14, 2016. On September 20, 2016, co-defendant Michael Keatts, 59, of Stockton, was also sentenced to three years and one month in prison for his role in the conspiracy. Both Marquez and Keatts were ordered to pay $193,134 in restitution to financial institutions harmed by their scheme.

    According to court documents, from February of 2006, through at least August of 2012, Marquez and Keatts operated Colonial Home and Business Services in Stockton. Both defendants were licensed real estate agents who assisted clients in purchasing and selling homes. They both participated in supplying false information to mortgage lending institutions indicating that clients were employed by various businesses that the defendants set up and controlled. In fact, these clients were not employed by those businesses and their actual income from their true employment was far less than what was represented to lending institutions. To support these false claims, the defendants created and submitted fraudulent paystubs and tax documents falsely stating that their clients were so employed.

    In addition, both defendants engaged in short sale fraud, in which they assisted clients facing default on their current loans to arrange for short sales of their properties. Unbeknownst to the lending institutions, the defendants arranged for the properties to be sold to straw buyers. The original owners would remain in the properties, and enjoy the benefits of the new loans that the lenders assumed were made to other individuals.

Trash Out Sub-Contractor Gets One Month In Jail For Pilfering Murdered Couple's Personal Belongings In Their Foreclosed Home

In Oneida County, Wisconsin, the Star Journal reports:
  • A 39-year-old Kaukauna man, who was convicted by a jury in Oneida County Circuit Court on three counts of burglary and a felony theft charge for taking items last year from the town of Piehl residence where Thomas and Jennifer Ayers were killed, was sentenced [] to a month in jail.

    Judge Michael H. Bloom ordered Mark F. Spietz, who was also placed on probation for 18 months, to begin the jail sentence sometime in the next six months, noting Spietz received a day of credit for time served and will be eligible for Huber-release privileges. Spietz was also ordered to pay $590 in restitution, plus a $59 surcharge, in addition to the $940 that had been seized from him, to cover towing charges related to the case.

    Spietz, who had been arrested last October when he was accused of taking numerous items that belonged to the Ayers family, contracted with TruAssets, a company which handles properties going through foreclosure. However, the terms of his contract did not allow him to remove personal property from the Ayres residence.

    Some the items Spietz was accused of taking from the residence included all-terrain vehicles as well as a purse. Bloom noted all the items removed were subsequently recovered.
    Oneida County district attorney Michael W. Schiek had recommended that Spietz be placed on 2-3 years of probation and sentenced to 6-9 months jail, also arguing Spietz took the property for his own personal use and that a jail sentence would deter others from wanting to steal from residences involved in foreclosures.

    Though Spietz wasn’t involved in the homicides of Thomas and Jennifer Ayers, for which Ashlee Martinson is serving a prison sentence, Schiek said Spietz knew the couple was killed at the residence and took property from there.

Thursday, November 10, 2016

Woman Gets 12 Days Jail Time, 5 Years Probation For Role In Running Loan Modification Scam; Pocketed Upfront Fees & Failed To Deliver Promised Services; Deal Requires Payment Of $60K In Restitution

From the Office of the Michigan Attorney General:
  • Michigan Attorney General Bill Schuette today announced that Asima Khan, of Roseville, was sentenced on one felony count of Larceny $1,000 - $20,000, for her role in running a mortgage modification scam across Oakland and Macomb Counties.

    “We see this time and time again, good people who have fallen on difficult times are taken advantage of by an individual who sees nothing but dollar signs,” said Schuette. “I am pleased to see this case resolved, but I will continue to seek justice and restitution for victims of this type of crime.”

    Khan, 35, was sentenced on October 27, 2016 in the 16th Circuit Court in Macomb County before the Honorable Diane M. Druzinski.

    Khan has been sentenced to 12 days in jail, followed by 5 years probation. She is also required to pay $60,387.24 in restitution to her victims.

    Case Background

    The Department of Attorney General’s Corporate Oversight Division began an investigation into Asima Khan and her company Financial Independent Services after receiving multiple complaints from victims in this case in 2015.

    Asima Khan and her company, Financial Independent Services, provided mortgage modification services in Oakland and Macomb County. Khan promised mortgage modifications and debt consolidation to her clients. However, she collected money for the services in advance in violation of Michigan law and did not provide the promised modifications or debt reduction.

    Khan’s company ceased operation in early 2014.

Two Low-Level Telemarketing Salespeople Each Get 18 Months For Roles In Peddling Loan Modification Ripoff; Scam Fleeced Over 1,000 Homeowners Out Of $3+ Million

From the Office of the U.S. Attorney (Bridgeport, Connecticut):
  • Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that KOWIT YUKTANON, also known as “Eric Cannon” and “Aaron Brock,” 32, of Huntington Beach, Calif., and CUONG HUY KING, also known as “James Nolan” and “Jimmy, 32, of Westminster, Calif., have each been sentenced by U.S. District Judge Stefan R. Underhill in Bridgeport to 18 months of imprisonment, followed by one year of supervised release, for participating in an extensive mortgage loan modification scheme. [...] Judge Underhill also ordered both defendants to pay restitution in the amount of $2,390,496.59.
    Aria Maleki presided over the entire structure of this scheme, and YUKTANON and KING were junior members of the sales team. Acting as representatives of [various] entities, YUKTANON, KING and others cold-called homeowners and offered to provide mortgage loan modification services to those who were having difficulty repaying their home mortgage loans.

    The defendants charged homeowners fees that typically ranged from approximately $2,500 to $4,300 for their services. To induce homeowners to pay these fees, the defendants falsely represented that the homeowners already had been approved for mortgage loan modifications on extremely favorable terms; the mortgage loan modifications already had been negotiated with the homeowners’ lenders; the homeowners qualified for and would receive financial assistance under various government mortgage relief programs, including the Troubled Asset Relief Program and the Home Affordable Modification Program; and if for some reason the mortgage loan modifications fell through, the homeowners would be entitled to a full refund of their fees.
    As a result of this scheme, more than 1,000 homeowners suffered losses totaling more than $3 million. [...] YUKATANON and KING each pleaded guilty to one count of misprision of a felony.

    Maleki pleaded guilty to one count of conspiracy to commit mail and wire fraud and, on July 18, 2016, he was sentenced to 112 months of imprisonment. He also forfeited approximately $350,000 that investigators seized from various bank accounts, approximately $362,000 sized from a Bitcoin account, a $100,000 cashier’s check, and a 2013 Ferrari 458 Italia.
Source: Two California Men Sentenced to Prison in Connection with Scheme to Defraud Struggling Homeowners.

In a related prosecution involving this racket, see California Woman Sentenced to Prison in Connection with Scheme to Defraud Struggling Homeowners:
  • [M]ICHELLE LEFAOSEU, also known as “Michelle Bennett,” “Michelle Lee” and “Michelle Page,” 42, of Huntington Beach, Calif., was sentenced [...] to 12 months and one day of imprisonment, followed by one year of supervised release, for participating in an extensive mortgage loan modification scheme.

Washington State AG Files Civil Suit Tagging Ex-Loan Officer With Sleazy Past For Allegedly Targeting Hispanic Homeowners With Ethnic Affinity Fraud While Peddling Bogus Loan Modification, Bankruptcy Counseling Services

From the Office of the Washington State Attorney General:
  • Attorney General Bob Ferguson [] filed a consumer protection lawsuit against a former Whatcom County loan officer, accusing her of offering home loan modification and bankruptcy services, neither of which she is qualified for under state law, then charging hefty and illegal up-front fees, while providing little or no help.

    The AG accused Miriam Lozano and her business, Primera Services, of violating the Washington Consumer Protection Act in a complaint filed [] in King County Superior Court.

    Lozano targeted the Latino community via word-of-mouth promotion and Spanish-language business cards promising a variety of services, including: “Prevención de embargo Bancario”; “Negociación de deudas”; “Detención de incautación de bienes”; and “Preparación de impuestos pasados.”

    “Preying on people facing foreclosure and bankruptcy is not only illegal — it’s immoral,” Ferguson said. “I won’t tolerate deceptive practices against Washington consumers.”

    Lozano, also known as Miriam Shaffer, pleaded guilty to first-degree theft in Whatcom County Superior Court in 2006 after being caught using another person’s identity to purchase two homes without that person’s knowledge in order to receive a commission.

    In 2007, the state Department of Financial Institutions banned Lozano from working with any licensed mortgage broker for 10 years.

    Despite the order, Lozano offered mortgage loan modification services. She also provided bankruptcy counseling, although she is not a lawyer or qualified to provide legal advice.

    Lozano told one King County homeowner that she had a high success rate with loan modifications and that she “looks out for the Spanish-speaking community.”

    Homeowners paid Lozano $1,400 up front for help with mortgage loan modifications, only to later find out that after taking their money, Lozano provided little or no help. Some homeowners paying for Lozano’s services were foreclosed upon, while others had to sell their homes to avoid foreclosure.

    The complaint alleges that Lozano engaged in unlicensed activity as a mortgage broker, charged illegal advance fees for third-party loan modification services, and made deceptive solicitations, violating the state Consumer Protection Act and the Mortgage Broker Practices Act.

    The Attorney General asked the court to order Lozano to stop engaging in deceptive practices, pay back all her victims, pay civil penalties of $2,000 per violation of the state Consumer Protection Act, and pay reasonable costs and fees.

    Lozano will have twenty days from the date she is served to respond to the state’s complaint.

    Individuals who believe they were victims of Lozano and Primera Services are encouraged to contact the Attorney General’s Office at (800) 551-4636 or
Source: AG: Former loan officer charged illegal fees, offered no actual help with loans, bankruptcy (Charged $600-$1,400 in illegal fees for services not qualified to provide).

For the Spanish version of the state attorney general's press release, Clic aquí para español.

Wednesday, November 09, 2016

Accused Of Fleecing Elderly Client Out Of $200K+ In Unrelated Case, Lawyer Now Faces Criminal Charges For Allegedly Doctoring Court Documents Filed In Foreclosure Cases To Improperly Obtain Successful Outcomes In Defending Homeowners; Prosecutor: Defendant's Conduct Enabled Him To Pocket Over $100K In Prevailing Party Legal Fees From Foreclosing Lenders

In Central Florida, the Tampa Bay Times reports:
  • First, Constantine "Chuck" Kalogianis was facing potential disbarment. Now, the well-known Pasco County attorney and onetime congressional candidate is battling criminal charges for allegedly doctoring foreclosure documents.

    Kalogianis, 53, was arrested [...] on nine felony counts: eight of them related to forgery and one count for a scheme to defraud.

    State Attorney Bernie McCabe charged that Kalogianis had engaged in a "systematic, ongoing course of conduct with intent to defraud" multiple lenders between November of 2013 and March 16 of this year.

    McCabe, who represents Pinellas and Pasco counties, launched the investigation after a lender's accusations that Kalogianis was altering foreclosure case records to benefit homeowners he represented. Surveillance videos taken in a Pasco clerk's office last year appear to show him stamping something on papers in two different cases.

    An investigator with McCabe's office said he found probable cause to believe Kalogianis forged or altered documents attached to mortgages on eight properties in Pasco County. Due to the forgery, he said, Kalogianis was able to convince the Sixth Judicial Court in those cases that the lender didn't have standing for summary judgment.

    As a result, Kalogianis received more than $100,000 worth of fees as the prevailing attorney that he otherwise wouldn't have received, McCabe's office said.
    Separately, a judge in August recommended Kalogianis face disbarment for at least five years after not paying back a $227,644 investment a 73-year-old client made to him in 2007.

    In his report, the judge lambasted Kalogianis as "completely self-serving," "strategically evasive," and "drenched in deceitful motive."

Owners In Pricey 6-Unit NYC Condo Sue Developer, Claim Shoddy Construction Allowed Mold To Spread Through Premises While Forcing Them To Wear Hats & Coats Indoors To Battle Cold

In Greenpoint, Brooklyn, the New York Post reports:
  • Residents at a pricey Brooklyn condo building claim the developer is refusing to fix their drafty, leaking units — forcing them to wear hats and coats indoors while battling black mold, a lawsuit charges.

    The six-floor, six-unit building at 48 Box St. looks like a shining gem on an otherwise gritty Greenpoint block, boasting apartments that feature marble countertops, stainless-steel appliances, gorgeous wood flooring and in-unit laundry.

    But residents — who plunked down $600,000 to $1 million for their units in 2013 — say in the Brooklyn Supreme Court suit that the building is a damp, mold-filled disaster that is freezing cold in the winter because of shoddily installed windows and a lack of insulation.

    “It’s hard to feel comfortable in your own home after three years when, in the wintertime, you have to wear a winter coat and scarf and go to bed in fleeces and layer up the blankets because the building is just leaking air and the cold air is seeping in,” griped one owner, who declined to give her name.

    Another owner said her three-bedroom apartment dips to as low as 30 degrees on the coldest days, and she has three children living with her.

    “It’s kind of ridiculous to have to bundle up your kids before we go to sleep,” said the mom, who also didn’t want to be identified.

    Residents in the building blame the leaks on lack of waterproofing.

    They say the mold has spread beyond their units, including the ceiling of a shared gym in the basement.

    The owners say they have lodged complaints with developers HM Ventures Group LLC and ASH NYC but that little has been done to fix the problems after three years.

Tuesday, November 08, 2016

Statute Of Limitations In Florida Foreclosure Cases Rendered Toothless By State Supreme Court; Ruling A Big Win For Sloppy Banksters, Provides No Closure For Homeowners In Long-Term Foreclosure Limbo

In Tallahassee, Florida, the Daily Business Review reports:
  • The Florida Supreme Court on Thursday ruled in favor of mortgage lenders in a decision that homeowners' advocates say will create renewed uncertainty for some borrowers about whether they can stay in their homes.

    Mortgage lenders may file new foreclosure actions against borrowers who won foreclosure cases more than five years ago if the borrowers defaulted again within five years of the first case's dismissal, the court ruled. Borrowers argued a five-year statute of limitations should apply. "People have a right to rely on statutes of limitation as bringing closure, especially after five years," said Kendall Coffey of Coffey Burlington in Miami, who represented borrower Lewis Bartram. "That closure has been erased for hundreds of borrowers. While we appreciate the court's consideration, we strongly disagree with their decision."

    But attorney Derek Leon, who represents mortgage lenders in several pending state court cases, said the court would have devastated the mortgage industry if it had accepted the borrowers' arguments. He estimated a decision in the borrowers' favor would have wiped out $300 million to $400 million in debt obligations secured by real property across Florida.

    "This is perhaps one of the most important decisions in the mortgage industry in a very long time, and it was a sweeping victory for the banks and anybody in the mortgage servicing business," said Leon, who is with Leon Cosgrove in Coral Gables.

    The Bartram decision applies to mortgage contracts containing an acceleration clause, meaning that if a homeowner defaults, the lender can require the full balance of the loan be paid immediately.

    The justices found that when foreclosure actions are dismissed, lenders and borrowers return to their pre-foreclosure complaint status. That allows homeowners to continue to pay back their loans in installments, rather than all at once.

    It also reinstates lenders' right "to seek acceleration and foreclosure based on the mortgagor's subsequent defaults," the court ruled in an opinion authored by Justice Barbara Pariente. "Accordingly, the statute of limitations does not continue to run on the amount due under the note and mortgage."

    Chief Justices Jorge Labarga and Justices Peggy Quince, Charles Canady and James Perry concurred. Justices Ricky Polston and Fred Lewis concurred in result. The decision affirms a Fifth District Court of Appeal ruling in the case.

    The Thursday decision was consistent with the Florida Supreme Court's 2004 opinion in Singleton v. Greymar Associates, Pariente wrote.

    In Singleton, the court ruled successive foreclosure actions based on separate periods of default were not barred by res judicata, the principle that a case that has already been adjudicated cannot be pursued again by the same parties. Two separate defaults are considered two different breaches of the mortgage contract and can be brought as two different actions, the court ruled.

    While he concurred in result, Lewis wrote that he was uncomfortable with the expansion of Singleton to "potentially any case involving successive foreclosure actions."

    "I fear [continued expansion] will come at the cost of established Florida law and Floridians who may struggle with both the costs of owning a home and uncertain behavior by lenders," Lewis wrote.

Virginia Supreme Court Nixes Real Estate Investor's Attempt To Recover $23,500 From Unwitting Property Owner For Costs Expended By Renovating Mistakenly-Identified Property He Thought He Purchased At Tax Foreclosure Sale

From a recent Justia US Law Opinion Summary:
  • Ravi Prasad purchased a lot at a tax sale. Shorty thereafter, [he] mistakenly began renovating a house on a nearby lot owned by William and Elnora Washington, spending more than $23,500 on the renovations.

    When the Washingtons refused to pay [Prasad] for the work he procured for their house, Prasad filed a complaint asking the circuit court to impose a constructive trust on the Washingtons’ lot. Specifically, Prasad alleged that the Washingtons had been unjustly enriched as a result of fraud perpetrated by them through misrepresenting the address of the house.

    The circuit court entered a decision in favor of Prasad and imposed a constructive trust on the Washingtons’ lot in favor of Prasad with a money judgment in the amount he expended on the house.

    The Supreme Court reversed and entered final judgment for the Washingtons, holding that under long-standing common law principles regarding notice imputed to purchasers of real property, because it was Prasad’s failure to exercise due diligence in his purchase of his lot that resulted in his misidentification of the Washingtons’ parcel as the property he was purchasing, Prasad was not entitled to recover compensation for the permanent improvements he made on the premises.
Source: Justia Opinion Summary - Washington v. Prasad.

For the ruling, see Washington v. Prasad, No. 151783 (Va. October 27, 2016).

Co-Conspirator In Home Title Hijacking Racket Gets 24 Months For Role In Unloading Homes "Acquired" With Forged Deeds On Unsuspecting Homebuyers; Ringleader Awaits Sentencing While Third Defendant Jumps Bail, Flees Country, Now A Fugitive

From the Office of the U.S. Attorney (San Diego, California):
  • Daniel Deaibes was sentenced [] to 24 months for his role in a scheme to steal title to Southern California homes and then “sell” the properties to unsuspecting buyers – before the buyers realized who the true owners were.

    From September 2012 through their arrest in November 2014, Deaibes and his co-conspirators, including co-defendants Mazen Alzoubi and Mohamed Daoud, fraudulently sold or attempted to sell at least 15 homes worth more than $3.6 million that actually never belonged to them. On at least 10 occasions, they were successful—earning illicit proceeds of nearly $2.2 million.
    As part of this plea, Deaibes admitted that he used aliases to deceive escrow and title officers into believing that he was “John Moran,” and that he was the true owner of property that was being marketed for sale. In fact, “John Moran” did not exist, and Deaibes and his co-conspirators planned to fraudulently sell the properties, divert the proceeds to their own bank accounts, and then quickly disburse the money overseas.
    To make it appear that they owned these properties, the co-conspirators generated forged deeds that made it appear the true property owner had sold his or her home to a sham real estate “investment” business the co-conspirators controlled. They forged the true owners’ signatures on the deeds, and used forged notary stamps to make them appear legitimate. In reality, though, the true owners were entirely unaware of the pretend sales. Once the fraudulent documents were recorded in the chain of title, Alzoubi (using aliases and stolen identities) listed the properties for sale, posing to buyers, escrow companies, and title officers as the new owner. In this way, the co-conspirators collected all the proceeds of the sale, and the true owners were left with nothing.

    Alzoubi, the ringleader of the fraudulent scheme, assumed multiple fake identities to keep the scheme going. He also posed as real people, pretending on one occasion that he was an attorney for one of the true owners. (Unbeknownst to Alzoubi at the time, he was talking to an undercover federal agent.) As a result of his greater role in the scheme, Alzoubi was charged with, and in January 2016 pleaded guilty to, aggravated identity theft, which carries a mandatory sentence of two years in prison in addition to his sentence for the fraud and money laundering. His sentencing [was] scheduled for November 7, 2016, at 9:00 am, before Judge Bashant.

    Mohamed Daoud also pleaded guilty, in July 2015, admitting that he helped Alzoubi launder the proceeds of the scheme. They used Daoud’s company, “Norway LLC,” to pretend to acquire title to some of the properties. Daoud received approximately $270,000 in proceeds. In December 2015, before he was sentenced, Daoud fled the country and is now a fugitive.

Monday, November 07, 2016

Closing Lawyer Who Allegedly Stole Nearly $60K In Escrow Funds Intended To Pay Off Existing Mortgage, Then Allowed Client To Subsequently Lose Home To Foreclosure Submits Resignation From Bar In Lieu Of Getting The Boot

From a post in a recent issue of the Texas Bar Journal:
  • On August 31, 2016, the Supreme Court of Texas accepted the resignation in lieu of discipline of Christopher J. Tome [#20117000], 65, of Cedar Park. At the time of Tome’s resignation, a disciplinary matter was pending against him.

    Tome was hired to handle the purchase of property on behalf of the complainant. Tome was given $72,000 to place in escrow, $12,000 of which was to go to the seller and the balance was to be used to pay off the existing mortgage and to cover Tome’s legal fees.

    Tome did not pay off the existing mortgage. Later, foreclosure proceedings were initiated against the seller, wherein the bank effectively sought to evict the complainant from his home. The complainant notified Tome of the legal action against the seller. Tome filed an application for temporary restraining order and was granted the same by the court.

    Thereafter, despite being noticed for various hearings in the foreclosure case, Tome performed no further legal work and failed to respond to the complainant’s repeated attempts to communicate with him about the status of the case. The home was foreclosed upon and the complainant had to move out of the home. Tome further failed to furnish a written response to the complaint as directed.
Source: Disciplinary Actions - Texas Bar Journal, October, 2016, pg.714.
(1) The Client Security Fund of the State Bar of Texas was established to reimburse clients who have suffered a loss due to a theft of their money, or a refusal to refund an unearned fee, by a Texas attorney.

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

Real Estate Brokerage Sued Over Its Agent's Alleged Theft Of $50K In Customer's Earnest Money Deposits; Victim Seeks Over $1 Million In Punitive, Emotional Distress Damages; Business Insurer Seeks Declaratory Judgment Establishing It Has No Obligation To Provide Defendant A Defense

In Chicago, Illinois, the Cook County Record reports:
  • An insurance company has gone to federal court in hopes of proving it has no obligation to cover a suburban real estate brokerage against a lawsuit brought by a woman who has demanded the agency pay her more than $1 million for failing to stop an agent who worked at the brokerage from pocketing tens of thousands of dollars in earnest money.

    Connecticut-based Twin City Fire Insurance Company filed a complaint for declaratory judgment on Oct. 25 in federal court in Chicago. It argues it owes no insurance coverage obligations to Re/Max Northwest and Dorothy Ellis, the brokerage’s owner and managing broker, in a Cook County Circuit Court breach of contract lawsuit filed June 7.

    In that matter, Elzbieta Sofer, of Park Ridge, accused Re/Max Northwest agent Eva Kalembasa of pocketing a $40,000 down payment Sofer made for an $80,000 Chicago property and a $10,000 down payment for a $180,000 Park Ridge property. As part of that complaint, Sofer said Ellis did nothing to stop Kalembasa from “defrauding certain customers” of more than $2.5 million.

    Ellis, Sofer alleged, “failed to make any effort to determine what, if any, properties Eva Kalembasa was attempting to sell, what monies she had collected and if she put funds into an escrow account as required by various contracts and Illinois statute.”

    On account of emotional distress Sofer alleged she suffered over her loss of $50,000 — “which caused her to become nervous to such a degree that she required medical care and treatment and still requires medical care and treatment” — Sofer seeks judgment of more than $1 million in punitive and exemplary damages.

Phony Real Estate Broker Who Opened & Operated Fraudulent Harlem Brokerage Office Gets 3-6 Years Prison Time For Duping Prospective Buyers Out Of $250K In Purchase Deposits

In New York City, the New York Post reports:
  • A phony real-estate broker was shamed [] by a Harlem imam for stealing $50,000 that it took his congregants the past 30 years to raise, as the conman was sentenced to 3-to-6 years behind bars.

    Imam Al-Hajj Talib ‘Abdur-Rashid, from the Mosque of Islamic Brotherhood on W. 113th St., recalled how scammer Dan Stern “exploited our dream” of buying a new church when he conned them out of their money.

    “We collected and saved the money of mostly poor people while praying for the opportunity of growth and expansion,” ‘Abdur-Rashid said in Manhattan Supreme Court.

    In all, Stern, 52, swiped $250,000 from victims he duped into believing he was an authentic real-estate agent or lawyer between 2014 and 2015.

    He pulled off the scam by opening up Harlem Village Reality on East 126th Street and advertising properties for sale — unbeknownst to the true owners and without their permission.

    The properties included two churches and several buildings – located at 41 West 124th Street, 36 West 128th Street, 52-54 East 126th Street, 342 West 123rd Street and 175 West 126th Street – that were facing foreclosure or were badly in need of repairs.

    Stern convinced interested buyers to hand over down payment checks, which he then pocketed.

Sunday, November 06, 2016

Evictions Begin At Recently-Purchased 48-Unit Silicon Valley Apartment Complex; New Landlord Wastes No Time Announcing Plans To Renovate, Boost Rents; A Dozen Tenants Get The Boot So Far

In San Mateo County, California, the Silicon Valley Business Journal reports:
  • Evictions at a soon-to-be-renovated apartment complex near Redwood City are sparking a backlash.

    Displaced tenants and other local residents plan protesting the evictions [] outside the 48-unit Buckingham Apartments, bought in July by Trion Properties for $15 million and located in the unincorporated North Fair Oaks neighborhood.

    The Los Angeles-based private equity firm bought the property, whose units had been renting at 40 percent below market rates, with the intention of renovating the building to attract employees of nearby tech companies like Facebook, Oracle and Google. According to its website, the company will invest almost $1 million in improvements.

    Eviction notices have been sent to 12 units, nine of whose residents have left, said Trion Managing Partner Max Sharkansky, who said renovations will probably start next month.

    According to a Trion pamphlet, average rents for a one-bedroom in Buckingham are currently $1,670. Post-renovation, the company expects that to rise to $2,400.

    "Trion's plan is to high-end those apartments, which is crazy in this neighborhood," said Sister Christina Heltsley, who is organizing the protest and is executive director of the nonprofit St. Francis Center. "... This is historically a neighborhood for low-income people who do service work."

    Community Legal Sevices(1) in East Palo Alto is representing the three families who have stayed in their units beyond the effective eviction date, as well as residents of five other units who have not received eviction notices yet.

    Attorney Daniel Saver said this group of tenants has been in negotiations with Trion, but declined to provide details. As far as tenants getting relocation compensation packages, Sharkansky said "we have had conversations about it, but I can't get into details."

    Sharkansky said Trion is in "no big rush to push people out" of units where renovations are not scheduled to imminently take place, saying they've allowed the three families to stay in their apartments past the eviction date.

    Saver said displacement of residents is a problem for the entire North Fair Oaks neighborhood, which is predominantly Hispanic and lower income. He wants the San Mateo County Board of Supervisors, which has jurisdiction of the area, to pass tenant protection ordinances related to rent stabilization, just cause eviction and relocation assistance.

    "This building isn't going to be the last," he said. "This has been happening ... and will continue to happen."
    Renovations are planned for the buildings exterior and common areas as well as the units themselves. Improvements will include new kitchens, bathrooms and wood flooring, according to Sharkansky, who said all renovations should be completed by the end of next year.
For the story, see Redwood City tenants to protest evictions at to-be-renovated apartment complex.
(1) Community Legal Services in East Palo Alto provides legal assistance to low-income individuals and families in East Palo Alto and the surrounding community. Practice areas include housing, immigration, and economic advancement.

American Dream Turns Into Nightmare For Unit Owners In 130-Unit, NYC-Financed Affordable Housing Development; HOA's Lawsuit Blames Developers, Architects For Crappy Construction, Design; Condo Board President Fears Complex Could Turn Into "Zombie" Condos If Repairs Price Owners Out Of Homes

In Arverne, Queens, Habitat Magazine reports:
  • A city-sponsored affordable Rockaways housing development is at risk of becoming “zombie” condos if the board loses a $60 million lawsuit against developers and architects. That’s the fear of Lenny Yarde, board president of Waters Edge at Arverne, a 130-unit complex made up of 65 two-story buildings completed in 2009 amid much fanfare from the Bloomberg administration.

    The lawsuit, which seeks $10 million for repairs and $50 million in punitive damages,(1) was filed by the condo board against developers and sponsors Briarwood Organization and its principals, including Raymond, Vincent, and James Riso, and AIA Architects and Associates.

    The suit claims the complex is plagued by numerous construction defects, including improper installation of roofs and gutters, corroded electrical pull boxes, water damage to windows and doors, inadequate boilers, and lack of access to electrical panels and water shut off valves. The board hired an engineer to document the alleged defects.

    “My feeling is that we have been duped,” says Yarde, who claims no entity involved in the complex’s construction – from the City of New York to the developer – will take responsibility.

    “How does the city hand over $12.8 million to a developer [to complete the project] and not have oversight on what’s going on?” Yarde says. “It seems to be that as soon as we have raised money to purchase and the developer has that money, he can ride off into the sunset.”

    According to the Waters Edge board, issues have been present for at least six years, and the past 24 months have been spent in fruitless negotiations with Briarwood Organization.

    The city’s Department of Housing Preservation & Development (HPD) and the Department of Buildings did not respond to requests for comment. In an email, HPD advised the office of City Councilman Donovan Richards that Waters Edge should “explore any and all legal remedies it has against the contractor/developer, particularly with respect to any warranties.”

    Florence Ferguson, the board secretary who bought into Waters Edge in 2010, says she is particularly angered by the lack of accountability and oversight of the project by the city. “The developer obviously has no integrity and is going to walk away,” Ferguson says. “They don’t care. This developer got $12.8 million from the city – from people’s taxes.”

    The average cost for a Waters Edge two-bedroom unit is $188,000, with three-bed units topping out at $300,000, with HPD subsidies.

    If the lawsuit is not successful, many unit-owners fear that some units will foreclose and will not be resold.

    This can become a zombie complex because people will be forced out of their homes,” Yarde says. “You can’t pay common charges or your mortgage if you are priced out of your home [by the repairs]. If this can happen to us, it can happen to anyone who purchases affordable housing. That is not the American dream. That’s the American nightmare.”

    Briarwood Organization did not respond to a request for comment.
Source: When Affordable Housing Becomes a Money Pit (Lawsuit seeks to prevent “zombie” condos on the Rockaway Peninsula).
(1) Another story prices the damages sought in the lawsuit at $210 million. See Owners of Queens city-financed affordable condos sue developer over construction defects (The condo board at Waters Edge at Arverne in the Rockaways is seeking $210 million from the project's developer, Briarwood Organization, and its architect).

City Slaps Rental Building With Vacate Order After Landlord Fails To Correct Series Of Structural Issues That Make Premises Unsafe For Habitation; Code Enforcement Inspection Triggered By Tenants' Complaints, 120 Now Face The Boot, Getting 72 Hours To Pack Bags & Take A Hike

In Stockton, California, KXTV-TV Channel 10 reports:
  • A hundred and twenty residents could be forced to move from their apartments in Stockton because the owner has not fixed structural issues the city deems unsafe.

    In September, Code Enforcement Officers with the City of Stockton inspected the Doyle Garden Apartments at 625 East Oak Avenue following complaints from residents about the living conditions there, Public Information Officer Joseph Silva with the Stockton Police Department said.

    The inspection revealed a series of structural issues that have made the apartment building unsafe for people to live in.

    The stairwell, balconies and walkways at the apartment complex are structurally unsound and dangerous, Officer Silva said. Code Enforcement Officers notified the building owner in September that the issues would need to be resolved, but the owner never made the necessary repairs, Silva said.

    On Friday residents received notices to vacate the building within 72 hours due to the unsafe living conditions. If an effort is not made to make the necessary repairs asked by the city, resident may be asked to leave as early as next week, Silva said.

    “We don’t want to evict anyone that’s living there without making sure that they have another place to go,” Silva said. “So before we actually get to that point, we’ll go back out and meet with the residents with some service providers so that we can make sure that they all have a place to go to if the property owners does not bring up this building to code.”

    The Stockton Police Department is working with the San Joaquin Housing Authority, San Joaquin Fair Housing Association, and California Rural Legal Assistance agency to insure that residents will have temporary location should they be forced to vacate their homes.

    Any costs associated with temporary relocation such as residents being moved to hotels will be the responsibility of the owner because of negligence, Silva said. If the owner does not take care of those costs, a lien may be taken out against the property, and if necessary law enforcement officials will take the matter to court.

Landlord Goes AWOL, Stiffing Vendors On Bills For Essential Services; Resulting Water Shutoff Forces City To Abruptly Boot All Tenants, Forcing Them To The Streets With No Place To Go

In Hopewell, Virginia, WWBT-TV Channel 12 reports:
  • Hopewell neighbors contact NBC 12 after they were suddenly evicted from their homes, stuck with no place to live.

    No running water at several apartments along East Broadway Street forced the city to evict the residents. Now those neighbors are speaking out about why they say their landlord is to blame.

    The problems started last month.

    "I went to take my trash around back and there was no dumpster," said Brenda McRae. According to a letter from the city of Hopewell, the landlord at the apartments never paid for trash pickup. Then came this.

    "Just yesterday morning, the water went off, and just a few moments later, everyone's here handing all this stuff out," McRae said, showing vacate letters ordering neighbors to get out by noon Tuesday.

    It’s a result of water bills that hadn't been paid. McRae says per her lease, her rent is supposed to cover it. "It includes the trash pick-up and water with the rent. I'm responsible for my electric bill," she said.

    So where's the landlord? "I've never seen the man. We don't know where [he is]. They can't get in touch [with him]," McRae added.

    NBC 12 called the rental office based in Richmond, but the line went to voicemail. NBC 12 then stopped by the Richmond home associated with property owner Brian Spencer. It appeared someone was home but no one opened the door.

    "The tenant has a very quick and effective remedy," says Marty Wegbreit with the Central Virginia Legal Aid Society.(1) He says in situations like this, renters can go to court demanding their landlord restore water. He says if you're forced out:

    "We give the tenant the right to seek damages," Wegbreit said.

    He adds those damages can include a portion of the rent you paid. Wegbreit also advises tenants to get multiple contact information of the person they're paying.

    "The landlord certainly knows where the tenant is going to be, it’s at the premises that the tenant is about to rent. The tenant needs to have as much information about the landlord," he said.

    In this case, neighbors feel stuck.

    "They have nowhere to go. There are people here with children," Shanna McRae said.

    Hopewell City Manager Mark Haley says even he has been unsuccessful in reaching the landlord. He says the Department of Social Services will work with displaced neighbors to help them find housing.
Source: Residents forced out of Hopewell apartments say landlord is nowhere to be found.

For a similar story involving a Richmond, Virginia building owned by the same landlord, see More tenants could face eviction after landlord avoids bills.
(1) Central Virginia Legal Aid Society provides free civil (non-criminal) legal assistance to low income people who live in, or have legal problems arising in, five cities and over a dozen counties in Central Virginia.

Grandma Faces Boot From Seniors-Only Mobile Home Community After Taking In Her 1-Year Old Grandson; No Luck Finding Buyer For Her Unit As Park Landlord's 6-Month Notice Nears Expiration

In Bradenton, Florida, WFLA-TV Channel 8 reports:
  • A Bradenton grandmother is being kicked out of her home after bringing in her 1-year-old grandson.

    Donna Souza lives in the Pine Haven Mobile Home Park in Bradenton. It’s a retirement community and she was told now that the child is living with her, she has got to go.

    Souza smiles, laughs and sings while playing with her grandson Bryson. Her joy is evident, but she’s hiding her fear. She explained when she held up a piece of paper that was delivered to her [].

    “This is Bryson’s and my eviction notice,” Souza explained.

    Bryson’s mother is battling drug addiction and is unable to care for him. So last year, Souza allowed Bryson to live here. The problem is, no kids are allowed to live at the Pine Haven Mobile Home Park.

    ‘I don’t want him put in foster care. He doesn’t deserve that,” said Souza.

    She was given a six month notice to sell her property, but she hasn’t had any luck finding a buyer. Now the deadline looms in 30 days and she has nowhere to go.

    “I’m scared. I’m terrified. Not for me but for my baby,” said Souza.

    Souza says the park management has not been cooperative. “Where’s their compassion? This is an innocent child, it’s not his fault,” said Souza.

    Even neighbors are frustrated. “This whole situation should never have come about….This is wrong, this is wrong,” said neighbor Art Brogren.

    8 On Your Side went looking for answers. When reached by phone, the mobile home park owner Mike Hickmann told us they’re following the rules that were put in place at the complex. “Other residents have complained about this, we’re trying to follow the rules that are in place for all not just for one,” he said.

    “In addition to the six months that we provided to her to sell her unit, which she signed an agreement voluntarily, she had been given verbal warnings prior to that time. We’re well in advance of six months plus another month that she’s been provided during the notice that she just received. She has not come to management since receiving the notice to talk about the issue. To suggest that we’re not listening or talking to her would not be accurate,” Hickmann added.

    Souza understands the management’s position. She just wants them to be more sympathetic. “I’m doing everything in my power to honor [the rules.] It’s just I can’t go into the streets with the baby.”