Sunday, June 03, 2007
Pennsylvania AG's Elder Abuse Unit Fast-Tracks Financial Crime Cases Involving Senior Victims
If a Pennsylvania attorney is representing you and screws you out of money or property through dishonest conduct, go to the Pennsylvania Lawyers Fund for Client Security for more information.
For other states, see:
- Directory Of Lawyers' Funds For Client Protection (American Bar Association - November, 2007);
- Check the USA Client Protection Funds Map; or
- try this "Google" search.
Hawaii Passes Law To Protect Elderly From One Form Of Home Equity Theft
Go here , go here , and go here for other posts on elder financial abuse. zeta elder financial abuse
Weekend I.D. Theft Blotter
- I.D. theft victim receives IRS letter demanding taxes on income earned by suspect who stole victim's I.D.; victim now has new Social Security number (see Tax season brings rise in ID theft cases),
- Four men charged with I.D. theft for allegedly stealing credit and debit card account information through tampered PIN-pad terminals in supermarkets (see Another guilty plea in identity theft case),
- Credit union pays for two years' worth of I.D. theft protection for thousands of members after their Social Security numbers ended up on the Internet (see Credit union paying for ID theft protection after info error),
- Red Cross I. D. theft scam invoves scammers impersonating Red Cross reps on phone & tell military spouses that loved ones have been hurt (see Red Cross warns military families about scam).
Thursday, May 31, 2007
Homes Used As Marijuana Grow Ops A Concern For Some
- "An increasing number of grow ops are being discovered across the country, leaving mortgage lenders and sometimes unsuspecting new homeowners with dangerously contaminated homes. The cultivation of large amounts of marijuana in confined spaces gives rise to safety issues involving mold from excess moisture, as well as contamination from the use of fungicides and insecticides, various solvents and other chemicals used for various purposes."
In addition, the San Francisco Chronicle recently reported a story about the problems landlords face when their tenants turn a rental home into a marijuana "grow room." The story includes the plight faced by one landlord who actually went through this nightmare; the pot-growing tenant actually threatened to sue the landlord -- for mold. For more, see Hard to just say 'no' to marijuana-growing tenants.
Tenants Suffering Fallout From Unwittingly Renting Homes In Foreclosures
The St. Petersburg Times is reporting a couple of stories of tenants who have unwittingly moved in and rented homes in the Tampa, Florida area, only to learn that the owner hasn't been making his mortgage payments and, consequently, found themselves as defendants in foreclosure actions.
One family, who moved from The Bronx into a Tampa-area home two months ago, were served with notice on May 19 that the bank seeks to foreclose because the owner is months behind in his mortgage payments.
For another couple, this scenario played out on two consecutive rentals. First, they rented a home from Victor Clavizzao, a loan officer (and reportedly, a felon) whose real estate transactions have been the subject of prior investigative reports in the St. Petersburg Times. When that home went into foreclosure, they moved into a home purportedly managed (and possibly owned) by Billy Womack, whose own real estate activities were the subject of a prior story in The Tampa Tribune. The Womack house had reportedly been recently flipped for more than double the previous price within a six month period, and the mortgage is also reportedly now in default.
For more, see Renters, too, face mortgage fallout (Unwary tenants find themselves caught in a widening web of fraud and foreclosure).
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 other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here.
For more on Victor Clavizzao, see Multi-Flipped St. Pete Home Raises Suspicion.
For more on Billy Womack, Tampa-based Womack Property & Asset Management, and the 12 houses Womack's brother and sister-in-law got stuck holding the bag on (allegedly purchased on Womack's advice), see A Dozen Houses, A Dozen Headaches (The Tampa Tribune). alpha
Landlords' Rent Skim Leaves Tenant Without Home
For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here. alpha
$20 Million Scam Dupes The Well-Heeled & Sophisticated
Ohio Man Allegedly Steals Parents' House Payments, Home Goes Into Foreclosure
New Hampshire Woman Charged With Stealing Elderly Woman's Home Sale Proceeds
NY Attorney Pleads Guilty Of Ripping Off Aunt Of Home Sale Proceeds
Disbarred Florida Lawyer Accused Of Stealing From Trust Accounts
Wednesday, May 30, 2007
Subprime Mortgage Manipulations Being Exposed
Among the sub-stories contained in the article are:
1) The story of Taher Afghani, who went from making $58,000 a year managing a Target distribution center, to pulling down $120,000 when he joined Secured Funding. "Afghani and other subprime veterans say their job was to reel in borrowers, period. Never mind whether customers needed loans or could manage payments."
2) How "anyone can work for a big lender under the umbrella of a single corporate license. The [California Association of Mortgage Brokers] estimated that a minimum of 600,000 people were peddling loans in the state last year. In other words, the corporation can hire a loan originator right off the street and have them originating loans that day without any education, licensing or individual accountability."
3) The story of Charlyn Cooper, a former Secured Funding underwriter, whose "job was to rein in the salespeople and make sure paperwork was legitimate so Secured Funding could sell its loans upstream. She says Secured Funding unloaded most of the loans on HSBC Holdings Plc's HSBC Finance unit, which has been racked by the subprime blowup. [...] Secured Funding salespeople didn't always appreciate Cooper's scrutiny of loans, she says.
4) The lawsuits from individual borrowers that are piling up around the country against the big lenders in the industry and the prospect that details of "[m]any subprime sales techniques are now spilling out in the lawsuits, advocacy reports and Congressional hearings."
For more, see Subprime Fiasco Exposes Manipulation by Mortgage Brokerages.
Michigan Servicemember Loses Home To Illegal Foreclosure, Says Lawsuit
- "When Sgt. James Hurley of the Michigan National Guard returned from the war in Iraq in December 2005, he found someone else living in his home. Hurley's lender had foreclosed on his mortgage while he was serving overseas and put his wife and two children out of the house in Hartford, in western Michigan, according to a complaint filed this month in U.S. District Court in Detroit."
Reportedly, a foreclosure and sale on a mortgage secured by home owned by someone while on active duty in the military is prohibited under the Federal law now known as the Servicemembers' Civil Relief Act. Michigan attorney Matthew R. Cooper, who is representing Hurley in the lawsuit, claims that the foreclosure and sheriff's sale happened even though the lender was notified that Hurley was on active duty in Iraq and that the Hurley's financial situation was as a result of being on active duty.
For more, see Servicemen battle money troubles too (Michigan soldier's loss of home to foreclosure illustrates financial strain of being sent overseas) (no longer available online).
For copy of the civil lawsuit filed in Detroit Federal Court, see Complaint - Hurley vs. Deutsch Bank National Trust, et al.Go here for other posts on the Servicemembers Civil Relief Act.
Illinois Servicemember Loses Home To Foreclosure
Reportedly, troops on active duty are protected from foreclosure only if their financial delinquency is the result of their military service. In this case, the doctor's failure to pay his mortgage started before the Army sent him overseas and, consequently, is not entitled to the protection afforded by the Federal law now known as the Servicemembers' Civil Relief Act. For more, see
- Overseas, and homeless (Army reservist on duty in Iraq is evicted from Aurora home)
- Out of their house, yet family holds on to hope.
Go here for other posts on the Servicemembers Civil Relief Act.
$6.5 Million Property Bought At Foreclosure For $2,000
"The sheriff commenced the sale around 10:00 a.m. (the exact time is the subject of intense dispute) and Palmbaum submitted an opening bid of $2,000. Palmbaum’s bid turned out to be the only bid because [the foreclosing lender's] designated bidders
Subsequent litigation by the foreclosing lender to undo the foreclosure sale was unavailing. The bottom line was that Mr. Palmbaum walked away with 57 acres of land, reportedly worth over $6 million for two grand (I hope the foreclosing lender's attorney had his/her malpractice insurance paid up).
Source:
Amalgamated Bank vs. Superior Court, (Cal. App. Ct., 3rd District, April 16, 2007; case available online courtesy of Findlaw.com)
For a short blurb in The Union on this case, see Business Law Bulletin: The devil is in the details, by California attorney Peter C. Bronson (look for the caption: Third case: The purchase thwarted by heavy traffic).
Tuesday, May 29, 2007
More Surprises For Real Estate Investors To Look Out For
1) Man uses pigs to trash own house after foreclosure,
2) watch KGW-TV Channel 8 News Report,
3) Follow up report, Charges possible after pigs rescued from foreclosed home.
For more on foreclosures and family pets, go here, and go here. petsII and foreclosures
The San Francisco Chronicle recently reported a story about the problems landlords face when their tenants turn a rental home into a marijuana "grow room." The story includes the plight faced by one landlord who actually went through this nightmare - the pot-growing tenant actually threatened to sue the landlord -- for mold. For more, see Hard to just say 'no' to marijuana-growing tenants. pot grow ops alpha
Commentary On Ex-Subprime Loan Originators Eyeing Move To Reverse Mortgage Market
For a BusinessWeek blogger's thoughts, see The mortgage mess of ... 2012.
Go here for other posts on reverse mortgage problems.
Go here , go here , and go here for other posts on elder financial abuse. zeta zebra elder financial abuse
NY Lawyers Land Legal Fee Of $1 Million In Pro Bono Case
Examples of such laws are:
1) The Federal Truth In Lending Act (see, for example, Moore vs. Cycon Enterprises, where a Michigan Federal Court ruled that a foreclosure rescue operator violated that law in a purported sale leaseback arrangement with a financially strapped homeowner).
3) In addition, there is at least one state that allows for a similar award of attorney fees by a court for violation of the state usury laws involving consumer loans and credit sales (see, for example, Smith v. Eisen, where an Arkansas appellate court ruled that a homeowner was entitled to an award of her attorney's fees to be paid by a pawn shop owner; in this case, the court found that a sale of a home with a contemporaneously executed buyback arrangement between the homeowner and a local pawn shop owner was nothing more than a usurious loan secured by an equitable mortgage).
I am also compelled to mention one other case reported on this blog in the past. In this case, the Washington, D.C. law firm Hogan and Hartson LLP obtained a substantial jury verdict, including $3.3 million in punitive damages, against a foreclosure rescue operator in the Washington, D.C. metropolitan area for violating the D.C. Consumer Protection Act (see Hogan & Hartson Wins $3.3 Million Verdict in Pre-Foreclosure Scam Case). While the news release does not discuss attorney fee awards (and presumably the D.C. statutes allows for an attorney fee award on top of the damages award), it is not unreasonable to believe that the law firm will, at a bare minimum, share in a part of the $3.3 million punitive damage award. Assume a cut of between 20% and 40%, and you can do the math yourself.
Whether you are a financially strapped homeowner, an experienced or aspiring foreclosure rescue operator, or an attorney thinking of representing either, I hope the foregoing has given you some insight as to:
1) How foreclosure rescue victims can go about retaining the services of an attorney for the purpose of undoing a foreclosure rescue arrangement and either getting back their homes, or otherwise salvaging the equity in their homes, and
2) who will end up footing the bill for the foreclosure rescue victim's legal fees in a successful litigation.
Go here for other posts referencing Eicher vs. Mid America Financial Investment Corp.
Go here for other posts referencing Smith vs. Eisen.
Go here for other posts referencing Hogan & Hartson. equitable mortgage yak
Monday, May 28, 2007
How Reliable Is The Reported Foreclosure Data?
The following excerpt reflects, in part, the frustration of some:
- "This is highly misleading, the company's critics say. A Colorado housing official recently called RealtyTrac's numbers "ridiculous and irresponsible." The Mortgage Bankers Assn. chastised Congress for depending on the company's data. RealtyTrac's competitors are becoming increasingly vocal about what they see as its overstatements but are sometimes arguing among themselves as well."No one is measuring the truth," said Mark Zandi, chief economist for Moody's Economy.com. "This is a problem when formulating policy.""
NYC, Chicago, Cleveland Getting Clobbered By Home Foreclosures
In Chicago, Crain's Chicago Business reports that "Cook County is on pace to record at least 30,000 and as many as 36,000 foreclosure filings this year, according to Cook County Circuit Court Judge Dorothy Kinnaird, who presides over the Chancery Division, which handles foreclosures." For more, see Foreclosures Still Raging In Chicago Area (Defaults could nearly double in '07 as pain spreads across region).
In Cleveland, a story by WKYC-TV Channel 3 reports on how hard the problem of home foreclosures has been hitting Cleveland and northeast Ohio. Go here to watch the Video - Foreclosure: Growing problem in Northeast Ohio.
Urgent Need For Mortgage Counselors In NYC
Commentary on the DMI Blog reports of the urgent need for cash to build the capacity of foreclosure prevention specialists throughout New York City. The author states:
- "Each person facing foreclosure represents hours upon hours of intensive intervention. And those in the trenches doing foreclosure prevention work will end up turning away more people than we can help because there simply aren't enough staff people and training supports (Read "dollars") to handle the need. If those struggling to overcome real estate scams and grotesque "exotic" loan terms represent a forest fire, then the fire fighters have been equipped with cups of water to meet the blaze. An estimated 15,000 foreclosure actions will be filed against New York City homeowners this year ..."
For more, see Foreclosure Prevention in NYC: Throw Money at It
Flexibility To Restructure Subprime Mortgages Lacking In Most Cases
- "Federal banking regulators are giving lenders more flexibility when they restructure high-interest rate mortgages given to home buyers with poor credit. The effort by the Office of Thrift Supervision and other agencies is aimed at softening the impact of the housing market’s slowdown and bolsters the argument of lawmakers who say mortgage reforms may not be needed."
Reportedly, the efforts of federal regulators are limited, however, by the fact that "lenders independent of federal authority originated more than 50 percent of subprime loans in recent years. Those loans were then often bundled into securities and sold to institutional investors."
In addition, regarding the difficulty in restructuring home mortgages that have been packaged into securities and sold off to institutional investors, Reuters reports:
- "Little can be done to change the terms of subprime mortgages to prevent foreclosure because of the way loans that were packaged and sold to Wall Street investors, mortgage industry executives said Monday."
Reportedly, the complexities involved in the financing structures that slice up and package different parts of the mortgage loans into bonds sold to investors, make it extremely difficult to restructure the troubled mortgages. Other complications that make restructuring difficult involve income tax issues, REMIC issues, and financial accounting issues.
For more, see:
Competitors Take Pot Shots At B of A's New "No-Fee Plus" Home Loan
- "Call it the "too good to be true" mortgage: Bank of America's new "no-fee plus" home loan program has competitors searching for sleight of hand tricks and gimmicks. But Bank of America says that its new program is for real, and comes with none of the usual grab bag list of origination, processing, title or closing costs."
For more, see A True "No Fee" Mortgage? (reported by Realty Times)
Alabama Feds Gets Gulity Plea In Mortgage Fraud; $9 Million In Losses, Says FBI
The Alabama Press-Register reports that real estate investor Darlene Hill, 50, of Mobile, Alabama, pleaded guilty in a Mobile Federal Court to wire fraud in a mortgage fraud scheme that bilked banking institutions and mortgage companies out of mortgage loan proceeds that resulted in a net loss to the lenders of $9 million, after money recovered from foreclosure sales is factored in. The scam involved was the standard "straw buyer" scam were investors with good credit were recruited and paid a fee for signing their name to bogus loan applications. Reportedly, it was unclear whether those people realized that their conduct was criminal. None of them was charged with a crime.
Other participants in the scam were:
- Mortgage broker Antonio Harrison of Mobile, who has admitted to submitting fraudulent loan applications to Regions Mortgage, loan closer Jocelyn Easter of Mobile, who served as closing agent on most of the fraudulent loans, Kathy Frye of Eight Mile, an office manager at title insurance agency Harris Title, who assisted in the scheme by notarizing signatures of straw buyers even though they did not appear in person for the closings and who also acknowledged that she was was aware that title insurance was not being issued even though funds were allocated for that purpose at the closings.
For more, see Mobilian uses accomplices to bilk mortgage companies.
For copy of indictment, see Indictment - USA vs. Hill, et al.
For story updates, see
- Eight Mile woman gets probation in mortgage fraud case (8-17-07 - Alabama Press-Register),
- Go here for updated posts on this story.
California Authorities Charge Bogus Appraiser With 142 Felonies
Ohio Feds Get Guilty Verdict Against Title Insurance Agency Owner
The investigation was conducted by a taskforce of federal agencies including the FBI, the IRS and U.S. Postal Service, which began investigating mortgage fraud in the sale of low price homes in the Cincinnati area. Over three dozen individuals have pleaded guilty to charges since the probe began. For more, see Title Company Owner Guilty (Was party to mortgage fraud).
For the 11 count indictment, see Indictment - U.S.A. vs. Corsmeier (drop me a line at HomeEquityTheft@yahoo.com and I'll email you the indictment - be sure to put "Indictment - U.S.A. vs. Corsmeier" in the subject line).
Missouri Feds Convict Title Insurance Agent Of Stealing $3 Million+ In Escrow Funds
Reportedly, Missouri doesn't restrict what title agents do with escrow money. According to Doug Ommen, the new director of the Missouri Department of Insurance, "What we have seen in the St. Louis area is, the agencies get into a squeeze because of competition. [...] They have been dipping into those funds that do not belong to them, to cover expenses. [...] It's shocking to me that there are no restrictions on the use of those funds."
Missouri insurance regulators also warned recently that some companies that sell title insurance to homeowners have two sets of prices - one for sophisticated buyers and a second for everyone else. For more, see
Colorado Feds Get Indictment In Alleged $4.5 Million Mortgage Fraud
- First Franklin Financial Long Beach Mortgage Co., Fort Worth Mortgage, First National Bank of Arizona, Accredited Home Loans, Countrywide Home Loans, Express Capital Lending and Fremont Investment & Loan.
For the rest of the story, see Aurora man indicted in real estate fraud.
For indictment details, see Indictment - U.S.A. vs. Taylor.