Five Charged in Bay Area Mortgage Scam

In California, CBS-TV Channel 5 reports that a 73-count felony complaint was filed in Alameda County Superior Court charging five people in connection with a complex real estate fraud scheme involving seven homes in Oakland through which they allegedly stole more than $3.5 million. Charges against the defendants include grand theft, identity theft, filing false documents and forgery.

Those named in the complaint include Amy Schloemann and Karim Akil, also known as Scott Kinney, the husband and wife owners of Hiddenbrooke Mortgage in Vallejo. Others charged are Hiddenbrooke Mortgage employee Michelle McGuirre, Financial Title escrow officer Wonda Kidd, and Gregory Lamont Orr, the owner of G.L.O. Enterprises, Inc.

Elements of the alleged scam include artificially inflated home values, creation of false documentation for loans by using false addresses, fake bank accounts and forged documents, use of the identity of local real estate brokers and individual citizens without their knowledge to make the transactions look legitimate, and the diversion of the fraudulently obtained loan proceeds to the alleged co-conspirators. New Century Mortgage and Right-Away Mortgage were the reported victims of the fraudulent loan applications.

For more, see Vallejo Mortgage Co. Charged With $3.5M In Fraud.
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Las Vegas Man Files Suit In Loss Of Home In Foreclosure Rescue Deal

KLAS-TV Channel 8 in Las Vegas, Nevada is reporting on the story of a local homeowner who lost his home to a foreclosure rescue operator. The victim has brought suit against the operator and others for breach of contract, bad faith, fraudulent misrepresentation, civil conspiracy and wrongful eviction, among other claims.

The lawsuit alleges that Ken Ragle, aka Kenneth Ragle, the president of a company called Dreamscape Solutions, agreed to purchase the victim's home for $233,000. The deal would stop the pending foreclosure and offer the homeowner the chance to stay put. He would then rent the house from the Ragle and buy it back in a few years for close to a $100,000 over the purchase price. Before the closing, Ragle reportedly flipped the contract to a California realtor named Shana Burbank. When all the dust settled, the $233,000 sales price was never paid, nor was the homeowner's existing mortgage ever paid off, and the homeowner found himself being evicted from his home.

For more, see I-Team Investigation: From Homeowner to Homeless.

To read the lawsuit, see Complaint - Ogilvie vs. Dreamscape Solutions, Inc., Kenneth Ragle, et al.

Go here to watch KLAS-TV report by investigative reporter Colleen McCarty.

(revised 5-12-07)

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North Carolina AG Pursuing Mortgage Broker

The North Carolina Attorney General is going after mortgage broker Hall Financial Service, of Matthews, on allegations that the company's owners have engaged in mortgage fraud, according to a report by WCNC-TV. The attorney general claims that one third of Hall's loans are headed to foreclosure, and he wants to strip the company of its license and permanently bar its owners from the mortgage business. For more, see Dream home destroyed by mortgage fraud.
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Ohio Prosecutors Indict Franklin County Trio In Flipping Scam

The Columbus Dispatch reports that an indictment was unsealed in state court last week charging Mohamed A. "Mike" Mohamed (who acted as the buyer), Jeremy K. Virgin (who prepared the inflated appraisals), and Karen Axline (who was a clerk for a title agency who used forged documents to help Mohamed buy the property), with theft, forgery, money laundering and falsifying loan applications for their roles in an alleged flipping mortgage fraud scam. An organized-crime task force of Columbus police, prosecutors and the Ohio Attorney General's office brought the charges. For the details, see 3 indicted in mortgage scheme (Suspicions aroused by buyers who offered much more than some houses' asking prices).
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$17.6 Million Fraud Involving 280 Properties Gets Missouri Man 5 Years In Federal Slammer

Jeffrey Tyler Wine, of Kansas City, Missouri, was sentenced in a Missouri Federal Court today to five years in federal prison and ordered him to pay $4.9 million in restitution for his role in a nearly $17.6 million straw buyer / flipping mortgage fraud scam that involved 280 residential properties. According to John Wood, U.S. Attorney for the Western District of Missouri:

• "Dozens of financial institutions were victimized by this mortgage fraud scheme, which in turn erodes the area's real estate market and negatively impacts the local economy. Wine will not be allowed to profit from his deception; in addition to a lengthy prison term, virtually all of his assets will be used for restitution for his victims."

For more, see:

• U.S.Attorney Wood Press Release, and
• Businessman gets five years for mortgage fraud (Kansas City Business Journal)

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Illinois Files Disciplinary Actions In Alleged Flipping Scam; 125 Homes Involved

According to a Press Release issued yesterday from the office of Illinois Governor Rod R. Blagojevich:

• "[O]fficials from the Illinois Department of Financial and Professional Regulation (IDFPR) and the Governor’s Mortgage Fraud Task Force (MFTF) today announced a series of disciplinary actions against more than a dozen real estate licensees, including mortgage brokers and loan originators, allegedly involved in a ‘mortgage flipping’ scheme – buying houses below market rates and re-selling the same properties for artificially higher prices. The scheme, centered in the Chicagoland area, involved more than 100 properties, said IDFPR officials during a press conference called to disclose the results of a three-month investigation."

Those named in the state disciplinary actions are:

• Tyrone Matthews: Appraisal and LoanOriginator, Felicia Matthews: Appraisal, Joseph Holman: Appraisal, Jomonique Moore: Appraisal Associate, John Tagtmeier: Loan Originator, Illinois Mortgage Assoc.: Residential Mortgage Broker, Carteret Mortgage: Residential Mortgage Broker (Va.), Contemporary Financial Services Inc. Mortgage Broker, New Family: Residential Mortgage Broker, Kelly Husband: Loan Originator, Appex Mortgage: Residential Mortgage Brokers (Fla.), Cynthia Woodcox: Unregistered Loan Originator, Odeh Saleh: Unregistered Loan Originator, Clint Welsh: Unregistered Loan Originator, Deangelius Smith: Unregistered Loan Originator, Tri-Star: Title Agency, Resource: Title Agency.

For more, see Blagojevich Administration officials take action against massive mortgage fraud ring.

See also Chicago Tribune story, 17 penalized in 'mortgage flipping'.

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Debt Forgiveness On "Short Sales" Not Always Subject To Income Tax

An article by syndicated columnist Kenneth Harney (reported in The Ledger, of Lakeland, Florida) describes the income tax "hand grenade" that homeowners in default on their mortgages face when mortgage lenders agree on either a mortgage modification or a "short sale" where, as part of the deal, the mortgage lender agrees on forgiving part of the mortgage debt. Under general income tax rules, the part of a debt that is forgiven is subject to Federal income tax (and state and local income taxes, if applicable, as well). Such a tax generally causes a problem for a homeowner because he/she is not actually receiving money to pay the tax with. Further, since these situations typically arise with financially strapped people, they usually don't have any other source of cash to pay this tax with.

Reportedly, proposed legislation in Congress could soften some of the impact on financially stressed homeowners, however. The Mortgage Cancellation Tax Relief Act of 2007 (HR 1876), if ultimately passed by Congress and signed into law, would amend the tax code to exclude debt forgiveness on principal home mortgages from treatment as income.

For more, see The Tax Man Will Care About Your Forgiven Debt.

For those who can't wait that long, I will point out that there are a number of exceptions and exclusions to this income tax rule. Among the exceptions and exclusions are:

• debt that would have been deductible if paid,
• debt that is canceled as a result of Hurricane Katrina,
• debt that is canceled in a Federal Bankruptcy case,
• debt that is canceled while you are insolvent, but limited by the dollar amount of your insolvency,
• and others.

I suspect that many financially strapped homeowners losing their homes may, in fact, be insolvent. I also suspect that, because there doesn't seem to be much written about the insolvency exception (or the other exceptions, either) to the general rule, it is probably being overlooked by many people. To read more about all the exceptions and exclusions to the general rule that subjects an individual to income tax on the amount of debt that is forgiven, see:

• Section 108 of the Internal Revenue Code,
• IRS Publication 4681: Canceled Debts, Foreclosures, Reposessions and Abandonments.

If you need assistance in determining whether or not you qualify for one or more of the exceptions or exclusions, I highly recommend retaining the services of an experienced tax professional who knows something about doing some basic tax law research (ie. tax attorney, CPA, or Enrolled Agent; this is not a job for your average tax form preparer). And be prepared to show the tax pro copies of the three references listed above, just in case.

Go here for other posts on this subject.

(revised 5-9-07; 1:12 pm)

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Lenders More Willing To Work Out Payments With Homeowners

A recent Washington Post article reports that some mortgage lenders are becoming more flexible and increasingly more willing to help troubled borrowers stay in their homes. Described in the story are various options that may be available to homeowners when dealing with their lenders in making payment arrangements.

One caution in negotitaing with lenders is directed to financially strapped homeowners who have significant equity in their homes, where "[i]f the lender then forecloses, that lender is protected against loss because the equity in your home could cover the loan balance and foreclosure-related costs."

According to industry expert Jack Guttentag, "It's a paradox, but the borrower who gets into trouble and has no equity is in a stronger negotiating position with the lender than the borrower who has equity."

For more, see Fighting to Keep the Roof (Strapped Owners Find Help From Their Lenders).
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FHA Mortgage Reform Bill Gaining Steam In Congress

Pending legislation allowing the Federal Housing Administration to offer borrowers a safer alternative to risky mortgage products and to help many homeowners facing foreclosure is moving along in Congress. A Congressional committee voted last week to send the bill to the full House of Representatives for a vote.

The legislation – called the Expanding American Homeownership Act of 2007 – would increase loan limits, eliminate the statutory 3 percent minimum cash down payment, and give FHA flexibility to provide risk-based pricing.

For more, see Passage of FHA reform bill would help homeowners and homebuyers, says NAR (courtesy of the Florida Association of Realtors).
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"Baseball Bat" Intimidation Used At New Century, Says Former Employee

A recent Washington Post story describes the "pressure cooker" atmosphere experienced by in-house appraisers and underwriters at New Century Financial Corporation to approve loans where the underlying documentation for the loans "had problems."

The article is reportedly based on accounts from former New Century rank-and-file workers who worked at five different branches that handled subprime loans all over the country. In agreeing to give interviews for the article, all except one former employee spoke on condition of anonymity, citing recent e-mails from the firm telling them not to comment publicly.

Among the details in the story was the reported use of yelling and slamming desks with baseball bats by salespeople (who worked on commissions) when one in-house appraiser rejected their deals. According to one former employee whose job it was to approve or reject the loan documentation on pending mortgage applications:

• “There was instant notification to everyone as soon as you rejected a loan. And you dreaded doing it because you paid for it. Two guys would come with a bat, and they were all [ticked] off because you cut their deals.”

Reportedly, "the pressure to meet [...] expectations was so unrelenting that a worker in Foxboro, Mass., collapsed from stress and was taken to the hospital."

For more, see Pressure at mortgage firm led to mass approval of bad loans (reported at the Florida Association of Realtors website).

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Arizona Regulators Crack Down On Escrow "Skimmers"

The Arizona Republic reports:

• "Arizona regulators are cracking down on escrow officers for skimming hundreds of thousands of dollars off home sales. So far this year, a handful of those officers have been banned from the escrow business and the mortgage industry for writing unauthorized checks out of home-sale funds to relatives, real estate agents, loan officers, contractors and cleaning companies. Some also have been convicted of theft."

• "Barred from the business for writing unauthorized checks out of home-sale proceeds are: Anna Solis, Denise Claudia Ramsey, Margie Means, Annette Damico and Sandra Flores. The state regulator also has moved to ban Nancy Wilson from the business amid allegations that she embezzled $129,418 from her former employer, LandAmerica of Phoenix..."

For all the details, see Escrow officers under scrutiny.

Go here for stories on other alleged escrow agent mishandling of funds. sneaky slick escrow agents alpha

New Hampshire Not Immune From Subprime Crisis

The New Hampshire Union Leader reports that New Hampshire is not immune from the nationwide foreclosure crisis within the "subprime" mortgage industry. One local expert is predicting a "Nantucket sleigh ride" for the industry.

Sarah Mattson, a staff attorney with New Hampshire Legal Assistance, a non-profit law firm offering free legal services to seniors and eligible low-income persons, reports that a growing portion her organization's foreclosure practice involves people who have been ensnared by "foreclosure rescue scams."

Peter Wright, director of the Consumer and Commercial Law Clinic at Franklin Pierce Law Center in Concord, also reports seeing more clients who fell victim to predatory loans.

New Hampshire and Massacusetts bankruptcy attorney Richard Gaudreau, warns the picture is about to get even worse, referring to "deferred interest" / "negative amortization" mortgages as "the real time bomb" in this crisis. Reportedly, he is pursuing cases involving Truth in Lending Law violations by mortgage lenders on behalf of a number of New Hampshire homeowners.

For more, including a description of what is a "Nantucket sleigh ride", see NH foreclosures jump as 'exotic' loans' rates adjust.

Go here for more posts on homeowners who have refinanced into bad mortgage loans and are now using the Federal TILA to try and undo the bad loans. undo mortgage loans TILA alpha

More On New Hampshire Foreclosure Trouble

For more stories from the New Hampshire Union Leader on New Hampshire foreclosures, see:

New Hampshire couple who was reportedly misled into taking out a subprime mortgage with payments that were $600 per month higher than was represented, see Immigrant family falls afoul of subprime mortgage.

Manchester couple fighting in court with a foreclosure rescue operator in an attempt to undo a transaction purportedly inteneded to "save" their home from foreclosure, the nature of which was reportedly misrepresented to them, see Seeking a lifeline, their 'rescue' made things worse.

New Hampshire legislature's attempt, through House Bill 365 which passed in March, to address the abuses that are common in foreclosure rescue transactions, see House bill could help homeowners.
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Multi-Flipped St. Pete Home Raises Suspicion

In Florida, the St. Petersburg Times recently reported on the story of one home that sold three times in one year; the last two times for $50,000 more than the previous sale. According to the Times:

• "All three transactions involved Victor Clavizzao, a loan officer whose suspicious real estate deals and lengthy criminal record were the subject of a St. Petersburg Times story April 29."

For the details of the three sales, the relationship between Clavizzao and the subsequent home buyers, a reported FBI investigation, and comments from industry professionals, see One house, three quick sales, one familiar link (Questions multiply about a loan officer who is the key thread in a home's rise in hard times).

For story update, see Felon changes tune on mortgage fraud (8-23-08; In filings made public this week in U.S. District Court in Tampa, Clavizzao agreed to plead guilty to conspiring to fraudulently obtain nearly $6-million in mortgage loans on the Venetian Isle house and 12 other homes and condos in Pinellas County).

For more on the reported real esate escapades of Victor Clavizzao, see:

• Felon drives dizzying web of house deals (Inflated prices, bogus buyers, swollen loans. It's a whole different housing market for some).

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Weekend I.D. Theft Blotter

I stumbled into these identity theft related stories that caught my eye:

• Used computer donated by Illinois city contains names and social security numbers of about 130 city employees (see Identity Theft Scare or watch WCIA-TV Channel 3 Video report),
• Woman discovers she's an I.D theft victim when hospital bills her $17,000 for surgery she never had (see Hospital bill alerts woman to identity theft),
• Computer hackers set up shop next door to Internet cafes; set up "evil twin" websites to lure victims (see NBC2 Investigates: New forms of identity theft or watch NBC2-TV Video Report),
• Anne Arundel (Maryland) Police Community Relations Council is holding a countywide document shredding event on May 12, 2007 (see Shred-a-rama to protect against identity theft - County will set up free shredding machines),
• Children, ages 3 weeks and 7 years, victims of I.D. theft; victims under 18 increasing every year (see ID Theft: A Growing Problem For Children or watch Video - Child ID theft),
• NYC airline employees charged with using stolen passengers' credit card information to run up charges (see JetBlue Workers Charged In Identity Theft Scam or watch Video - JetBlue ID Theft Scam),
• I.D info stolen by office temp while working at insurance company used to borrow $12K to buy motorcycle (see Charges filed against man accused of identity theft),
• School administrator accused of stealing co-worker's identity; caught writing herself check for $3,500 in co-worker's name, resigns her position (see School administrator will likely avoid jail in identity theft case),
• 2007 list with personal info of about 450 graduates of local Texas college accidentally put in server easily accessible on public computers on campus, (see ID theft a concern for Montgomery College students - Identity theft a worry after data is put on an open server on campus)

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Are "No-Cost" Mortgages Actually "Cost Free"? What's a "Yield Spread Premium"?

For answers to these questions and a discussion of so-called "no cost mortgages", see these MarketWatch articles:

• Lenders agree more disclosure is needed on 'no cost' mortgages
• Debate between borrowers and lenders rages over 'no-cost' mortgage loans
• No-closing-cost refinancing will cost you one way or the other
• Lenders defend pricing on no-cost mortgages

For a story on the controversial "Yield Spread Premium", thought of by some as a type of hidden charge for a mortgage that may not show up on a closing statement, and by others as a legitimate fee when disclosed and applied properly, see Subprime crisis shines light on mortgage brokers (Class action suit against NovaStar alleges hidden fees; lender to fight back)

For a basic explanation of what the "Yield Spread Premium" is all about, see Mortgage Ails: Too Much Information?

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Watch Out For Well Known Home Repair Scams

"Spring is a time of renewal, change, and new beginnings. Unfortunately, it's also a time when crooked contractors come out of the woodwork to prey on innocent homeowners", reports Bankrate.com, which has an article that sets forth a half dozen often used home improvement scams, how to recognize them, and how to protect yourself from them. For more, see 6 sleazy home improvement scams.
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New Jersey Contractor Cons Two Out Of Their Homes; Uses Straw Buyer To Cash In

Oscar Brown, a Jersey City contractor and owner of Divine Developers, was arrested late last month on charges he conned two homeowners out of their residences and then sold them to a straw buyer in order to "cash in" on the alleged swindle, according to a story in The Jersey Journal. He was charged with theft by deception stemming from the false documents and false representations he made to the mortgage companies.

According to a county prosecutor, it was only when the bank began foreclosure proceedings after being stiffed by the straw buyer that the real owners learned they no longer owned their homes. Both homeowners had to obtain court orders to keep from losing their homes.

Reportedly, Brown persuaded the two homeowners to sign over the deeds to their property when they couldn't afford to pay for work he performed. They were told that it was an interim solution while they worked to get a loan to cover the construction bill, according to authorities.

For more, see Call contractor a $$$ trickster (Two nearly lost homes to scheme).
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Suspected Home Repair Scammers Victimize Elderly Couple

A story by KRNV-TV Channel 4 in Reno, Nevada serves as another reminder to approach with suspicion unsolicited visitors knocking on the front door of your home offering to provide services that will purportedly help you avoid trouble.

According to detectives, four men approached an elderly couple and told them their home was not up to code and offered to make the "necessary" repairs so as to avoid inspectors from "red tagging" the residence.

The elderly couple then reportedly paid the suspects more than $12,000. The suspects then came with a crew of laborers and did some yard work, scraped some paint from the house and worked on porch repairs. The couple reportedly saw one of the suspects come down from the home's second floor where jewelry and coins were later reported missing. The suspects failed to return the following day to complete the work for which they had been paid and haven't been seen since.

For more, see Reno Police Looking for Home Improvement Scam Suspects.
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Indiana Man Charged With Home Repair Fraud

Dennis D. Sayers, of Arcadia, Indiana, was arrested by Indiana State Police for home improvement fraud, among other charges on Thursday, according to a story in The Indianapolis Star. With respect to the home improvement fraud charge, Sayers was accused of taking $3,500 in advance from a homeowner to do work on a New Palestine, Indiana home. The homeowner reportedly told police that Sayers set up scaffolding and tore off some siding and never returned. Subsequent bad weather then destroyed part of the home where the siding had been removed. For more, see Home contractor charged with fraud.
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Free Home Repairs For Two Dozen South Florida Homes

Rebuilding Together, a national nonprofit organization that makes free repairs to seniors' homes, coordinated home repairs for two dozen families in need through their Broward County and Miami-Dade County chapters last week. These chapters were among 240 chapters nationwide that revamped the homes of the elderly, disabled and families with children -- the organization's principal beneficiaries. Lowe's home improvement store participated in the South Florida effort. For more, see:

• Home improvement makes life little easier (South Florida Sun-Sentinel),
• Homes receive free makeovers (Two dozen homes in Broward and Miami-Dade counties were treated to free home repairs by volunteers on Saturday) (Miami Herald),
• 9,100 Homes Repaired by 270,000 Volunteers Nationwide on National Rebuild Day 2007 (PR Newswire),
• Go here for recent Rebuilding Together home rehab stories around the country,
• Go here to find a Rebuilding Together Affiliate in your area (by state or zip code).

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Free Home Repair Program Launched in Fort Wayne

The Journal Gazette reports that volunteers, city officials, charities and churches in Fort Wayne, Indiana have come together to launch a free home repair program that will try to offer an ongoing solution to the problem of low income homeowners ordered by local code enforcement agents to make unaffordable home repairs. For more, see Volunteers nail down details of citywide home repair plan.
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New Century Financial Corporation - RIP

HousingWire reports on the one-time subprime mortgage darling, New Century Financial Corporation:

• "News broke late yesterday that New Century will shutter the rest of its business, laying off the remaining 2,000 employees it had been keeping in hopes of finding a buyer."

For more, see Game Over: New Century Won’t Be Bought.

Southwest Florida Builder, Brokers Named Again In Another Lawsuit Alleging Real Estate Fraud

A Lehigh Acres, Florida couple alleges in a real estate fraud lawsuit that the value of eight properties they bought from First Home Builders was falsely inflated by three real estate appraisers in Lee County to support a construction loan, according to a report in The News-Press of Southwest Florida. The purchases were reportedly made in connection with a real estate investment program formerly operated by D'Alessandro & Woodyard Commercial Realtors.

Named in the suit are First Home Builders of Florida, First Mortgage Lenders of Florida LLC, real estate brokerage D'Alessandro & Woodyard, its broker Frank D'Alessandro and real estate agent Samir Cabrera, Gary Ouellette, Honora Kreitner, real estate appraisers Gary Neese, William Meador and Gulf Coast Appraisal and Associates, Primary Mortgage Funding Inc., Norlarco Credit Union, and First Home Title, Inc. D'Alessandro is a weekly real estate columnist for the The News-Press.

The allegations contained in the lawsuit include (1) fraud in the inducement, (2) civil conspiracy, (3) breach of contract, (4) negligent misrepresention, (5) recission, (6) misleading advertising, and (7) violation of the Florida Deceptive and Unfair Practices Act.

Representing the plaintiff is attorney Gary F. Ritter, with Thompson Law Firm, Bonita Springs, Florida.

First Home Builders, the real estate brokerage, and Cabrera are currently defendants in another lawsuit brought by a Broward County, Florida couple that also reportedly involved the investment program that was operated by D'Alessandro & Woodyard.

Buried in an April 28 article by The News-Press (which reports that Cabrera is a defendant in a $13+ million foreclosure action filed by an entity controlled by D'Alessandro), Cabrera and D’Alessandro are reportedly named as defendants in six lawsuits alleging securities fraud, mortgage fraud and breach of contract in connection with sales to investors of homes built by First Home Builders in Cape Coral and Lehigh Acres in 2005 and 2006 (see Suit filed against broker’s agent - Lenders seek foreclosure action).

For the copy of the Lehigh Acres couple's lawsuit, see Schmidt vs. D'Alessandro & Woodyard Commercial Realtors, First Home Builders, et al.

For the current article on the Lehigh Acres couple's lawsuit, see Lawsuit alleges appraisals inflated.

For the previous article on the Broward County couple's lawsuit, see First Home Builders dispute could lead to class-action lawsuit (Broward couple claim fraud in loans for three First Home properties in Lee).

For other posts on First Home Builders, see Securities / Mortgage Fraud Suit Filed Against Florida Builder, Bank, Broker.

For a prior post on the ongoing real estate flipping in Southwest Florida involving allegedly inflated appraisals, see Flipping Deals Running Rampant In Southwest Florida.

(this is an updated post - originally posted 5/3/07 - 1:55 pm)
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Pennsylvania Woman Charged With Stealing $100K From Mom

Michelle Yoter, of Bethel, Pennsylvania, was charged with stealing about $100,000 from her mother, according to a report in the Lebanon Daily News. Included in the alleged theft were the proceeds from the sale of the mother's home. Reportedly, according to court records:

• Yoter tried to keep her mother from contacting other relatives, keeping them unaware of her whereabouts or what she was doing with her mother's property,
• The mother stayed with Yoter in her Bethel home for several months, allegedly without medication or adequate food,
• It wasn't until the mother fell and broke her arm and was taken to a hospital that she was able to contact other family members.

For more, see Area woman accused of ripping off her mother.

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Some Mortgage Market Players Agree On Bailout Principles To Apply To Help Struggling Homeowners

Several major participants in the home mortgage market have agreed to adopt a set of principles for dealing with homeowners facing foreclosure due to subprime mortgage loans, according to an Associated Press article appearing on the website of the Florida Association of Realtors. Such voluntary action by mortgage lenders and other players are preferable to any government bailout to cover mortgage loans in default, according to Senator Chris Dodd, the chairman of the Senate Banking Committee.

Those agreeing to the principles include the Mortgage Bankers Association; Wall Street powerhouses Citigroup Inc., JPMorgan Chase & Co. HSBC Holdings Corp. and Bear Stearns & Co.; government-sponsored mortgage finance giants Fannie Mae and Freddie Mac; AARP; and the Leadership Conference on Civil Rights. Several activist and community groups receive money from financial institutions and work with homeowners to refinance high-rate loans.

Some companies, however, including Countrywide Financial Corp. and Wells Fargo & Co., did not endorse the principles. For more, see Several players in home mortgage market agree on principles for borrowers in trouble.
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