Central Florida Woman Scheduled For Sentencing On Equity Skimming, Fraud Convictions

The St. Petersburg Times reports that Synthia Ippolito, who along with her now ex-husband, was convicted of equity skimming and fraud in a scam that robbed people of some of their home equity, is scheduled for sentencing today in a state court in Pinellas County, Florida. The ex-husband, Christopher Nickelson, 45, was convicted of the same crimes last year. He got 15 years. For the story that led to their convictions, see:

• Con artist or beaten spouse? (She blames her ex. It's an act, her victims in a housing scam say).
• For prior post, see Florida "No Money Down" Scam Artists Convicted Of Equity Skimming.

Refinancing Funds Made Available By Some States To Aid Troubled Subprime Borrowers

The Wall Street Journal reports:

• "Hoping to slow the quickening pace of home foreclosures, about a half-dozen states are setting up funds to help homeowners with high-risk subprime mortgages refinance to more-affordable loans. The states -- which include Maryland, Massachusetts, New Jersey, New York, Ohio and Pennsylvania -- are expected to invest a total of more than $500 million in the effort."

While state officials concede that it is not a large amount relative to the size of the problem, the hope is that these funds will be enough to keep some vulnerable low and moderate income neighborhoods from sliding into decline. For more, see States Aim to Stem Tide Of Home Foreclosures With Funds for Refinancing.

Whistleblower Suit Accuses Lender Of Defrauding Government Out Of Millions

A whistleblower lawsuit has been bouncing around in a Brooklyn, New York Federal Court since May, 2005 in which four "whistleblowers" accused M & T Mortgage Corp., a subsidiary of M & T Banking Corp., of "knowingly and recklessly present[ing] fraudulent claims for millions of dollars to the United States Department of Housing and Urban Development (HUD) for ... mortgage insurance claims on properties ... after recklessly taking assignments of forged, and therefore, void mortgages thereon, after knowing that the mortgages were forged ..."

Among other accusations in the original lawsuit is the claim that inflated mortgages, for which no funds were actually advanced, were written and forged, and then assigned to banks for the purpose of defrauding HUD.

A recent (July 9, 2007) press release reports on what is apparently an updated development in the case:

• "The whistle blower suit stems from a case involving more than 50 mortgages owned by M & T on properties in Manhattan and Brooklyn that were fraudulently secured through HUD's 203K program for non-profits. A new admission by M & T's lawyer reveals there are nearly 400 fraudulent mortgages worth a half-billion dollars. Indeed, on Friday night, June 29, 2007, Todd Marcus, the attorney for M & T, admitted in a letter to the court that his client never made him aware of a secretive deal between the bank and HUD, in which HUD agreed to pay off not just these 50 fraudulent mortgages, but an astonishing total of 374 fraudulent mortgages worth some $500 million! Marcus previously represented to the court that M & T had no knowledge of any fraud in the origination of any of these loans. The deal between M & T was reached six years ago, according to a letter dated January 11, 2001. Although his law partner attended the meeting at which the deal was reached, Marcus told the court on Friday that he was not aware of the agreement or even the letter's existence until April of this year!"

The press release quotes the plaintiff's attorney, Peter S. Gordon, as saying "[The] admission to the court by M & T attorney Todd Marcus concerning these 50 fraudulent mortgages, as well as the 324 other ones, not only propels the whistle-blower lawsuit forward, but could also result in a number of criminal indictments."

For more, see:

1) Copy of Federal whistleblower lawsuit - Pugatch, et al. vs. M & T Mortgage Corp.

2) July 9, 2007 Press Release - M & T Bank Subject of Whistle Blower Lawsuit; Bank Accused of Defrauding Government Out of Millions From Forged Mortgages (from Earthtimes.org) or (from PR Newswire).

3) Go here for other posts on whistleblower suits involving alleged fraudulent mortgage lending practices.

Hawaii Homeowner Suing To Get Back Home Lost In Foreclosure Rescue Deal; Reportedly Out $160K In Home Equity

(original post - 7-21-07)

KITV Channel 4 in Honolulu reports:

• "An Ewa Beach family is the victim of a spreading scam involving foreclosure rescue fraud, according to attorneys with the Legal Aid Society of Hawaii. As more people struggle with rising mortgage payments, attorneys for Legal Aid Society of Hawaii said there are groups promising hope that are actually out to steal homes."

When the homeowner fell behind on the mortgage payments, she reportedly turned to a company called USA Mortgage. What the homeowners thought was a refinance was a below-market sale, with a contemporaneous leaseback of the home requiring rent of hundreds of dollars higher than the old mortgage, and she paid thousands to people associated with Mortgage Alliance, according to the article. For more, see Legal Aid Says Ewa Beach Family Scammed By Mortgage Company (Mortgage Company's Attorney Says Client Did Nothing Wrong).

Go here for other posts on Hawaii foreclosure rescue.

Editorial Note:

Even if there is no fraud, deception, overreaching, etc. committed by the foreclosure rescue operator in this case, the transaction described in the story still smells like an equitable mortgage. If, in fact, a transaction like the one described in the story is treated by a court as an equitable mortgage, the foreclosure rescue operator would only be entitled to a repayment of any amounts advanced, plus interest (subject to any applicable usury statutes), and the homeowner would be entitled to get back the title to the home, subject to the equitable mortgage.

The Hawaii Supreme Court decided the applicability of the equitable mortgage doctrine in the state (or at least I thought they did) over forty years ago (see Kawauchi v. Tabata, 49 Haw. 160, 413 P.2d 221 (1966)).

(In that case, a sale-leaseback arrangement involving a property owner facing foreclosure, where the property selling price was found to be inadequate relative to its true value, and where the financially strapped property owner retained possession of the realty after the transaction, was held to be a secured loan subject to the usury statutes, and not a sale. In so holding, the Hawaii high court observed, "Were we to hold otherwise our usury statute would be emasculated.") equitable mortgage yak

Texas Homeowner Facing Foreclosure Falls For Upfront Fee "Rescue" Offer

(original post - 7-21-07; revised 8-17-07)
KHOU-TV (Channel 11) in Houston, Texas reports on one homeowner facing foreclosure who responded to a postcard in the mail from an entity she thought was an arm of the Federal government, but ultimately turned out to be American Housing Authority — an outfit in California offering hope, claiming it can stop foreclosures. Reportedly, she's out a $948 fee, and she's losing her house anyway.

For more, watch Channel 11 TV report, Foreclosure Rip-Offs (Wendell Edwards reporting).

To read online report, see Don't let foreclosure fears rush decisions.

For a recent post on an "upfront fee" Ohio foreclosure rescue operator currently being sued by financially strapped homeowners, see Foreclosure Rescue Service Sued In Cincinnati For Alleged Failure To Provide Promised Services.

Go here for other posts on American Housing Authority and Brandon Roberts.

Minnesota Feds Investigate Unusual Twin Cities Deals For Possible Mortgage Fraud

The Star Tribune reports:

• "Federal investigators are probing a renewed rash of potential mortgage fraud in the Twin Cities area in response to reports of a large number of unusual real estate transactions in north Minneapolis and elsewhere. One company being examined has purchased hundreds of properties from southern Anoka County to eastern Dakota County, according to property records."

Reportedly, there is a claim that one company is buying property at one price and flipping it at an inflated price to an affiliated company, with many of the properties lacking any evidence of improvements that would justify the gain in prices. Part of the claim also is that many of the resold properties continue to use the same property manager. Those listed as partners in the company reportedly did not respond to repeated requests for comment. For more, see Mortgage fraud in Cities on FBI radar (Several agencies are scrutinizing fears about property flipping as the North Side reels from foreclosures).

Old-School S&L Stuck With Toxic Meth Lab In Its Portfolio

The Denver Post reports:

• "Century Savings [and Loan] is a tiny financial institution, founded in 1903. It sits on [Trinidad, Colorado's] Main Street, a relic of a bygone era when S&Ls took deposits from and made loans to the people in their communities. It has only $86 million in assets and 16 employees. "We are the old-school savings and loan," said [Century's president, Mike] McMillan. "We may not light the world on fire, but we're here and we're steady and we're serving our community.""

This story is about a small frame house in Trinidad, Colorado which once secured a mortgage loan made by Century Savings. A grandmother once lived there with her children and grandchildren until one day when there was a small explosion in the home. As it turns out, Granny was operating a methamphetamine lab. She was eventually arrested and then her house sat vacant and rotting for years. Ultimately, Century Savings foreclosed and got stuck with the house which, as it turns out, was not only completely worthless, but it actually had a "negative value," as the article reports:

• "The S&L is small enough that any foreclosure stings. But granny's kitchen was so toxic it left the property with a negative value. It might cost $30,000 to $40,000 to demolish and dispose of the contaminated house, leaving a lot worth only $10,000. And forget about the loan."

The article goes on to describe: (a) how easy it is for a home to become toxic as a result of its use as a meth lab, and (b) the nightmares (either for landlords or foreclosing mortgage lenders) of having to deal with a property (which could be a single family home, an apartment on the ground floor of a large aparment building, etc.) which has been used by its occupants to manufacture methamphetamine.

The article reports that "[t]o this day, granny's place remains a hazardous-waste spill."

Go here for some methamphetamine information resources.

For more, see Meth house a lender's nightmare.

Go here and go here for other posts on home based meth labs. meth lab zeta

Never Buy Property At Court Ordered Foreclosure Sales! (Unless You Know What You're Doing)

In Ohio, The Canton Repository recently ran a story of a naive, young couple with absolutely no clue of what they were doing who went to a court ordered foreclosure sale at the Stark County Courthouse and were the winning bidders on a four bedroom Victorian home on four acres of land that they were going to make their home. They celebrated that night by calling a family who wanted to buy their then-current home and signed a contract to sell it to them.

What happened next should serve as a cautionary tale to those thinking about buying a home at a foreclosure sale (not to be confused with an auction of foreclosed homes that mortgage lenders are already stuck with and are trying to unload). The message is that, unless one is prepared to do all the research and legwork that professional foreclosure sale investors do when buying properties at these sales, you should probably think twice about doing it. For the rest of the story, see New home turns into a Catch-22.

Mississippi Man Gets 2 Year Prison Term For "Doing Nothing" In Mortgage Fraud Scam

The Clarion-Ledger reports that Daniel Floyd, of Greenwood, Mississippi who pleaded guilty to failing to alert authorities to a scheme he knew others were involved in to fraudulently obtain mortgage loans of approximately $2.8 million, was sentenced in a Mississippi Federal Court to 24 months in prison and will be placed on one year of supervised release after completing his sentence. For more, see Greenwood man sentenced in mortgage scheme.

To read the official criminal charges, see Information - U.S. vs. Floyd.

For the federal statute (U.S. Code) violated in this case, see Section 4, Title 18 - Misprision of felony.

North Carolina Alleged Cash Back Mortgage Fraud Dupes The Educated & Well Heeled

(revised 8-12-07)
A recent story in The Wall Street Journal serves as another reminder that it isn't only the poor, uneducated and financially unsophisticated that can get sucked into a costly real estate scam.

In the fall of 2002, a real estate developer lured a financially well-to-do crowd to a tent party near an artists' colony tucked in North Carolina's Blue Ridge Mountains where he "talked up a plan he promised could bring big financial payoffs to the isolated community and anyone who invested in it."

For North Carolina real estate developer Tony Porter and his company, company, Peerless Real Estate Services Inc., to get his 2,000-lot residential and retail development project of the ground, the article reports:

• "[h]e needed investors to launch the project in time to catch the real-estate wave. To help them get in on the action, Mr. Porter promised to arrange loans of as much as $2 million ... [.] Even more enticing, Mr. Porter and documents promoting the project said investors would receive large cash payments -- as much as 10% of the proceeds -- when the loans closed. The investors also were promised they wouldn't have to make down payments with their own money and Mr. Porter or one of his companies would make their monthly mortgage payments for at least a year, according to the documents in a civil suit filed in June by the North Carolina Attorney General against Mr. Porter and more than a dozen associates and related companies. The suits alleges [sic] they used inflated appraisals and phony down payments and performed other misdeeds to cheat investors and mislead the banks."

According to investigators, nearly 200 investors -- mostly well-heeled professionals including real estate lawyers, doctors and Air Force officers -- borrowed more than $100 million from a handful of banks. No crimes have been charged; state and federal agents are reportedly investigating.

It's now been about five years since that tent party, and no houses have been built, loans are in default, and worst of all, "weeds are invading the lawn at the empty sales office."

For more, see 'I Feel Like an Idiot' (Land Project Gone Wrong Shows How Even Well-Off Lured By Go-Go Climate) (May require subscription - if no subscription, try here).

See also, North Carolina Attorney General Press Release - AG Cooper stops $100 million mountain real estate scheme (Developers convinced dozens of consumers to invest in overvalued lots in Mitchell County).

For later articles on this story, see:

Developer's dreams too good to be true (3 ambitious Carolinas projects failed; many say they're owed money). (8-12-07 -The Charlotte Observer) (no longer available online).

Developer Leaves Failed Projects in His Wake (8-12-07 - The Associated Press).

More On Fires & Foreclosures

According to Burr Ridge Suburban Life, a house in Burr Ridge, Illinois bought from a bank for $1.1 million in December, 2006 went up in flames a month later. The homeowners, a husband and wife, left the country for Syria shortly thereafter. Almost six months after being gutted by fire, the spacious three-story house on one of Burr Ridge’s most prominent streets remains boarded up, and the now former owners (the mortgage lender has since foreclosed on the property) are still out of the country. Authorities don't know why they left (and possibly don't know if they are ever coming back) and the DuPage County Arson Task Force has yet to determined the cause of the fire. The village of Burr Ridge is waiting for the bank that now owns the property to grant authorization for demolition. For more, see Village awaits bank’s OK for house demolition.

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WZZM-TV Channel 13 in Grand Rapids, Michigan reports that a vacant foreclosed house owned by out-of-town lender Fidelity Bank of Kansas went up in flames at the end of June. After over two weeks after the fire, Fidelity finally boarded up and secured the premises. Neighbors say the house is a hazard and feared neighborhood children would get on to the property. Reportedly, the house sits next to a church and will be torn down eventually, damaging the surounding neighbors' home values in the meantime. No mention if arson is suspected. For more, see After weeks, burned house is boarded for safety.

To see the fire, the aftermath, and the interview with the neighbors, go here to watch WZZM-TV report.

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The Columbus Dispatch reports on a fire-ravaged house in foreclosure in Mifflin Township, Ohio that still stands vacant after four years, with grass growing high in the trash-strewn yard and nobody knows what to do with it. Boards over the windows keep falling off, allowing troublemakers to break in. Bank One, now JPMorgan Chase and Co., foreclosed and agreed to buy the property at a sheriff's sale in 2006 but then backed off, court records show (the mortgage lender obviously doesn't want it). The homeowner's attorney sent a letter to the Franklin County, Ohio Board of Health, saying he is physically and financially unable to care for the property (the owner obviously doesn't want it, either).

(Presumably, the real estate taxes aren't being paid on the property, either - but I doubt that the county wants to foreclose; they probably don't want the house, either.)

Reportedly, local officials say the township and county are prevented by state law from demolishing the property. Meanwhile, the house continues to sit, in all its majesty, damaging the surrounding neighbors' home values. For more, see Mifflin Township residents, officials seek fix for fire-damaged house.

For other posts on fires & foreclosures, go here and go here. zebra

Florida Homestead Laws Save Home Of Accused Child Molester

In Port St. Lucie, Florida, TC Palm reports:

• "The city is dropping its bid to seize the home of a man accused of molesting a 13-year-old boy after learning he has a homestead exemption on the property. An attorney with the city filed paperwork last week to seize Robert Hasty's house, a van and computer equipment it alleges are connected to criminal charges against him. Assistant City Attorney Gabrielle Taylor said Wednesday the city had dropped its efforts to take the house after confirming Hasty does have a homestead exemption on it, something an initial records check did not reveal."

For more, see Port St. Lucie drops plans to seize man's house.

"Operation Home Improvement" Stings 19 Unlicensed Florida Contractors

The Ocala Star-Banner reports that detectives from Marion County, Florida Sheriff's Office executed "Operation Home Improvement," an undercover sting operation that netted 19 home improvement contractors in the act of contracting without a license. According to the story:

• "Operation Home Improvement was a joint effort between the Sheriff's Office, the State Attorney Office for the 5th Judicial Circuit and the Florida Department of Business and Professional Regulation. [...] During the weeklong sting, from July 9 to 13, a home was used to lure the would-be contractors to check out bids for a job. [...] The bids from the unlicensed contractors were for between $18,000 to $20,000, with 50 percent down. Many were told it would be a cash deposit for the work."

For more, see Sweep targets unlicensed contractors (Man hired by soldier among those charged). Go here for arrest video.

Elderly Couple Almost Lose Home To Scam Artists

The Waikato Times has a story of an elderly couple who almost lost their home and suffered ill health due to a mortgage broker / scam artist and a cohort who, in assisting the couple in obtaining a loan to to pay some debts and buy a car, had them sign their property over to a family trust set up by the brokers; they were told no loan repayments would be required because the house was now owned by the trust. Mortgage broker Miles McKelvy and Arden Fatu are reportedly now both in jail for convictions resulting from the fraud investigations in connection with this scam.

For more, see "They pick on the vulnerable" (A retired Huntly couple can again call their home their own after almost losing it when borrowing turned sour) (story no longer available online).

More On Tampa / St. Pete Multi Million Dollar Mortgage Fraud

The arrests of Scott Almeida, Orson Benn, Adrienne White, Frank Giffone, and Samuel Green for allegedly fraudulently obtaining mortgages in the names of local homeowners solicited for home improvement projects was the result of a three-year joint investigation by the Tampa Police Department (TPD), Hillsborough County Consumer Protection Agency (HCCPA), Pinellas County Department of Justice and Consumer Services (PCDJCS), Florida Attorney General’s Office of Statewide Prosecution (OSWP), and the Florida Department of Law Enforcement (FDLE).

Investigators conducted hundreds of interviews, issued approximately 250 subpoenas, and reviewed tens of thousands of documents over this period of time.

Of the five charged, Orson Benn and Samuel Green are former high-ranking employees of the Argent Mortgage Company White Plains, New York office who, according to authorities, subverted Argent policies and approved fraudulent documents and loan packages submitted by the others.

The other three defendants, Scott Almeida, Frank Giffone and Adrienne White, are reportedly all former owners, principals or employees of the mortgage brokerages Advanced Mortgage Solutions and Consumer Lending Resources. In addition to the mortgage brokerages, they also operated two home improvement companies: Premier Quality Renovations and Florida Beautiful Construction, according to authorities.

In addition to Argent, fraudulent loans were also allegedly submitted by Almeida and processed and approved by Pinnacle Mortgage Company, Decision One Mortgage Company and Mortgage Lenders Network USA.

Authorities say Argent Mortgage executives and their outside legal counsel have cooperated with investigators and have provided information and documents to support the investigation. Argent has also communicated with and assisted the homeowners victimized in this case, many of whom were facing potential foreclosure actions. (Strictly in terms of dollar amounts, however, Argent itself looks like the single biggest victim of the fraud).

For more, see FDLE News Release - Former Mortgage Company Employees Charged in Multi-Million Dollar Racketeering Case.

Go here for other posts on this story.

Complaints Against Florida Home Improvement Contractor Results In BBB Suspension

As a result of processing 78 complaints in the last twelve months involving, among other things, the company taking large deposits or payments and not finishing jobs, the Better Business Bureau of Central Florida has pulled the membership of Rockledge contractor Transflorida Corp., according to a story in Florida Today.

Reportedly, Transflorida is working to fix the problems and has hired four subcontractors to help with its backlog of jobs, and a public relations firm to handle the negative publicity the business has received.

Several Broward County residents who had contracts with Transflorida have banded together in an effort to persuade the Broward state attorney to file criminal charges. Reportedly, under Florida law, contractors who take deposits of more than 10 percent must apply for a permit in 30 days and start work within 90 days unless a customer agrees to a delay in writing. The law doesn't say how long the job should take. Theft charges can be filed against violators.

One couple had to pay other firms to make their home habitable, and they may face foreclosure because of financial problems caused by their experience with Transflorida. For more, see Company appeals its suspension by BBB (Transflorida says it's fixing problems) (no longer available online).

See also:

• Broward County families band together to fight Brevard County contractor (South Florida Sun-Sentinel) (no longer available online).
• Broward homeowners take complaints against builder to prosecutor (Builder took money, didn't do work, they say) (no longer available online).

For story update, see:

• Contractor offers refunds to angry clients (Florida Today - 10-4-07) (no longer available online),
• BBB Reliability Report for Transflorida Corp..

Go here for other posts on Transflorida Corp.

Home Health Care Aid Charged With Ripping Off Elderly Couple; Leads To Home Foreclosure

The Norwalk Citizen-News reports:

• "A 60-year-old city woman is accused of defrauding an elderly couple of hundreds of thousands of dollars while she worked for them as a home health aide. Nuria Reyes, 60, ... was arrested July 12 on six counts of first-degree larceny, one count of second-degree larceny, one count of third-degree larceny and 15 counts of criminal attempt to commit third-degree larceny."

According to an investigator with the Norwalk, Connecticut police, Reyes went to work for the elderly couple in 2003, at which time, the elderly couple owned their home free and clear of any mortgage. The husband died later that year after suffering a stroke, but the woman, who has a long term debilitating disease, continued to reside in the home. By 2006, the house had three mortgages and a home equity line of credit of almost $100,000, which led to its foreclosure in October, according to the investigator.

For more, see Home Health Aide Charged With Larceny.

Maryland Attorney Cops Plea To Stealing $260K From Dead Friend's Trust

Attorney James Lee Coffin, 54, of Crownsville, Maryland pleaded guilty this week to stealing more than $260,000 over a two year period from a family trust that he was hired to manage, according to a story in The Capital. Reportedly, he used the money towards buying a house, and also, the money came in handy in helping him avoid telling his wife that he lost his job at a law firm. Stealing the money made it look like he was still working.

Coffin was considered a friend by the family patriarch who hired him to manage the family trust. When the patriarch became ill in December 2002 and was not expected to live much longer, Coffin reportedly went to the hospital and promised him and his family that he would make sure the family was financially secure. He failed to keep his word. For more, see Attorney convicted of stealing $260,000 (Crownsville man stole from trust fund).

California Foreclosure Rescue Operator Gets Five Years In Federal Prison

The Sacramento Business Journal reports that Christopher Craig, 35, of Auburn, California was sentenced in a Sacramento Federal Court yesterday to five years incarceration, followed by five years supervised release, and ordered to pay nearly $1 million in restitution. Craig pleaded guilty to fraudulently collecting $1.2 million in home equity loans from Washington Mutual Bank that were obtained in the course of an equity stripping, foreclosure rescue operation in which he bilked homeowners of their home equity and defrauded WaMu of almost $1 million.

The straw buyers who participated with Craig, Donald Edgecomb, 35 of Trevor, Wisconsin., and Jacob Esteves, 35 of Auburn, also pleaded guilty to misprision of a felony (failing to report a crime) and are scheduled for sentencing next month. For more, see 'Foreclosure help' leads to prison term.

For copy of grand jury charges, see Indictment - U.S.A. vs. Christopher Craig, et al. Go here for other posts on this story.

Go here for U.S. Attorney's Press Release - Man Who Posed As Foreclosure Specialist Sentenced To Over 5 Years In Federal Prison And Ordered To Pay Back Almost A Million Dollars.

Go here for other Criminal Prosecutions Of Foreclosure Rescue Operators.

South Florida Realtor Finds Himself In The Middle Of A Cash Back Mortgage Fraud

In South Florida, the Daily Business Review recently reported:

• "It took real estate broker Wayne Blackburn less than a minute to spot the fraud in documents for a pending Fort Lauderdale home sale. A settlement statement showed a $1.2 million purchase price when the contract price was $830,000. The buyer’s name had been changed to Edimar DaSilva from Alex Costa. An unrecorded $237,080 second mortgage to a construction company was to be paid off at closing. The papers said sellers Gordon and Paula Clelland were holding $70,000 of an $80,000 deposit on the house and were to give DaSilva a $33,268 credit toward closing costs. Blackburn knew none of it was true. It turned out there was no second mortgage, and the actual deposit had been $20,000. [...] It’s not even clear if the first buyer, Alex Costa, even exists. If the sale had closed with lender Washington Mutual, the cashback deal allegedly would have allowed DaSilva to walk away with more than $330,000 on closing day and the house."

To find out what happens next, see Mortgage fraud’s latest fashion. (link OK as of 7-23-07; 10:39 am - EST)

NYS AG Charge Owners Of Adult Home With Theft Of Elderly Patient's Home Sale Proceeds

New York Attorney General Andrew M. Cuomo announced the arrests of Harry Smith, 46, and his wife, Christine Smith, age 40, of Beaver Dams, the former operators of a Beaver Dams “Family Type Home” for adults, for stealing thousands of dollars from two elderly residents of the home. Among other things, the indictment accuses the pair of stealing the proceeds of the sale of a 71-year-old resident’s home. Both elderly residents are now deceased. For more, see NY AG Press Release - Schuyler County Home Care Operators Charged With Stealing from Elderly Patients.

See also, Couple stole from elderly, officials say (Schuyler County husband and wife operated adult home in Beaver Dams) (The Ithaca Journal) (no longer available online).

More On Multi Million Dollar Tampa Bay Home Improvement Mortgage Fraud Scam

(revised 7-20-07)
In Central Florida, mortgage brokers Scott Almeida and Frank Giffone, both of Tampa, and three others have been arrested and charged for their alleged involvement in a multimillion dollar mortgage fraud scheme in the Tampa Bay area. According to investigators, the group passed out fliers that lured residents on fixed incomes to agree to a mortgage to finance home improvement projects. Investigators said a majority of the improvement projects were never started. They said it was one of the largest fraud cases they've ever seen in the Bay area. Their companies included Giff Inc., Priority One Title Services and Advanced Mortgage Solutions and Florida Beautiful Construction Management Inc.

According to a chief investigator at the Hillsborough County Consumer Protection Agency, "The defendants were targeting the low-income areas of town, which typically in this case were all minorities, uneducated, poor, dilapidated houses in many cases that needed repairs." The current criminal case focuses on 31 fraudulent mortgage loans, but it’s believed Almeida and his associates submitted about 180 loans totaling $18 million through Argent Mortgage Company.

Others arrested include two Argent employees, Orson Benn, 36, and Samuel Green, 27, who investigators say Almeida paid off to approve loans even though they knew supporting documents were fake, and Adrienne White, 37, who worked as a loan processor for Almeida. There is currently an arrest warrant out for a sixth person, Bradford Chase Peck.

For the local TV reports, watch:

Channel 10 TV report - FRAUD: Mortgage employees busted stealing millions

Channel 9 TV report - Five accused of mortgage fraud (They allegedly got people to take out loans, but didn't start construction).

To read Channel 9 online report, see Five accused of mortgage fraud.

For Tampa Tribune article, see 5 Arrested In Mortgage Scam.

For St. Petersburg Times article, see Loan scam hits dozens (Investigators describe victims across Florida, then five arrests).

Florida Mortgage Broker Charged In Multimillion Dollar Racketeering Fraud

The St. Petersburg Times reports:

• "State investigators arrested a Lithia man Wednesday in a multimillion-dollar racketeering mortgage fraud case, the result of a three-year probe into the former mortgage broker. Scott A. Almeida ... is accused of obtaining mortgages under false pretenses, according to his attorney, Todd Foster. Almeida faces charges of racketeering, conspiracy to commit racketeering, seven counts of grand theft and six counts of obtaining a mortgage by false representation, jail records show."

For more, see Arrest made in mortgage fraud case (A man is in jail after a three-year inquiry).

Go here for other posts on this story.

WBAL-TV Investigates Another Baltimore-Area Foreclosure Rescue Operator

WBAL-TV Channel 11 I-Team reporter Barry Simms is hot on the tracks of another Baltimore-area foreclosure rescue operator who is in a legal dispute with another homeowner facing foreclosure. Yesterday, I put up a post on rescue operator Michael Powell, who Barry Simms was literally chasing around trying to get answers to some questions about Powell's rescue business (go here to watch that WBAL-TV report) (link no longer available).

Today's post is on rescue operator Michael K. Lewis, who reportedly considers himself a pioneer and calls his cure for people facing foreclosure the "MKL financial diet." Unlike Michael Powell (yesterday's featured foreclosure rescue operator), Lewis was amenable to an on-camera interview with Simms.

Reportedly, the MKL financial diet for the homeowner featured in the story involved, among other things, her filing bankruptcy, selling her home, and the renting it back for nearly double of what her mortgage payments were. The buyer ended up being Ernest Lewis – Michael Lewis’ brother.

Reportedly, the homeowner is in court trying to get her home back. Her attorney is Phillip Robinson, executive director of Civil Justice Inc., a Baltimore nonprofit group.

Go here to watch the WBAL-TV report. (which includes an excerpt of a TV commercial featuring Michael K. Lewis offering his foreclosure rescue services) (link no longer available).

To read the WBAL-TV online report, see Woman May Lose House After Answering TV Ad.

Go here for other posts on Michael. K. Lewis.

Orlando TV Station Unveils Possible Central Florida Equity Skimming Operation

WKMG-TV Channel 6 in Orlando, Florida reports:

• "A Local 6 investigation unveils how some Central Floridians who thought they were on their way to home ownership may be caught up in one of the worst cases of mortgage fraud to hit the area, according to Problem Solver Steven Cooper."

The article highlights the stories of two aspiring homeowners who initially did business with a company called Livewire Properties. One homeowner entered into a "rent-to-own" arrangement to buy a home; the other reportedly bought her home using owner financing. Apparently, both homes had existing mortgages that were not paid off upon the consummation of each transaction. Each homeowner says that he/she unwittingly paid Livewire monthly payments without realizing that Livewire stopped applying the payments to the mortgages owed to the bank. Now, both homes are in foreclosure.

The story then takes an odd twist. Now that the homes are in foreclosure, two new companies stepped in, including Firenze Property Solutions owned by Robert Bove. Reportedly, Bove claimed he can save the homes if the homewoners start making payments to him. Bove's foreclosure rescue pitch is claimed to be the working out of "short sales" with foreclosing mortgage lenders.

Reportedly, Bove's past includes being wanted in New York on 37 felony counts. Go here to watch the full WKMG Channel 6 TV report (reported by Channel 6's "Problem Solver" Steven Cooper).

To read the online story, see Local 6 Investigates Man Promising To Save Homes.

For update on Robert Bove, see WFTV Channel 9 - Orlando: Man Sentenced To 13 Months For Writing Bad Checks In Real Estate Deal (Robert Bove, accused of using bad checks in a real estate scheme, has been sentenced to 13 months in prison, pleading no contest to grand theft. Investigators said he wrote bad checks worth more than $31,000 to buy a condo duplex in Apopka. Bove was also accused of using bad checks to buy condos then re-selling them before the original check was deemed worthless.).

Go here for other posts on "rent to own" scams.

For other recent stories on Robert Bove, see:

Flight ends in harsher sentence (Con artist who skipped court date sees his prison term doubled) (2-26-08 - Albany Times Union),
Mobile-home park residents still hoping for changes (Palamar's would-be savior has a criminal history. Will he improve their living conditions?) (8-19-07 - Orlando Sentinel),
Man Who May Buy Trailer Park Has Record (WKMG Channel 6 - Orlando),
Park finds a buyer -- with a catch (Orlando Sentinel), and
New Owner Of Mobile Home Park May Evict (WKMG Channel 6 - Orlando) or watch Channel 6 TV report - Eviction Fight. alpha rent to own lease purchase option scams zebra

Washington Post On The Maryland Foreclosure Rescue Problem

In a recent column in The Washington Post, Metro columnist Courtland Milloy comments generally on the foreclosure rescue problem in Greater Baltimore. He also gets comments about the problem from Largo attorney Stan Brown and Baltimore attorney Phillip Robinson, executive director of Civil Justice Inc. Both attorneys represent clients involved in the foreclosure rescue class action lawsuit filed last month in Prince George's County, Maryland against Metropolitan Money Store and a number of other defendants. For more, see Foreclosures Bloom at Corner Of Prosperity and Gullibility.

See also, Maryland foreclosure rescue class action lawsuit reported in other posts. Joy Jackson

Maryland Resident Falls Victim To "Rescue Buy Back" Scheme

WTOP Radio reports:

• "Instead of the American dream, a growing number of homeowners are experiencing the nightmare of losing their homes. YaVonna English of Silver Spring knows that anguish all too well. After her business failed, she filed for bankruptcy. She fell victim to a buy back scheme that meant the loss of the home her parents bought in 1970. Maryland state and local officials say English is not alone."

Since 2005, foreclosure rescue operators have been subject to strict rules on how they conduct business in Maryland. The new law passed in 2005 can be found at Sections 7-301 through 7-321 of the Maryland Real Property Law (Protection of Homeowners in Foreclosure - Each section of the statute has its own link).

For more, see Hot Mortgage Deal With Really Low Rates? Watch Out.

Two Detroit Men Get Prison Terms In Deed Theft / Forgery Scams

The Detroit Free Press reports:

• "Two Detroit men who were forging the signatures of property owners so they could illegally obtain ownership of the land, take out a mortgage and then pocket the money have been sentenced to prison, Wayne County officials announced Monday. Leroy Adams of Detroit was sentenced last week to 3-14 years on 15 counts of fraud after he used the identity of Vanna De Dona, 66, of Grosse Pointe Park, who owns rental properties in Detroit. [...] A month earlier, Russell Daniels of Detroit was sentenced to 3-20 years after neighbors told the owner of a Detroit house that unknown people were living there."

For more, see Forgery with homes leads 2 to prison.

Go here for other deed theft posts. deed theft zorro

Foreclosure Rescue Service Sued In Cincinnati For Alleged Failure To Provide Promised Services

Cincinnati-area foreclosure rescue operator Foreclosure Solutions LLC, Tom Bien, and attorney John S. Brooking have been sued by four homeowners in a state court in Hamilton County, Ohio for allegedly running an upfront fee foreclosure rescue scam that promised to save their homes from foreclosure, but did little or nothing in exchange for an upfront fee of $1,150.

According to the lawsuit:

• "The 'Solution' that Foreclosure Solutions sells to homeowners is the false promise of a foreclosure defense in exchange for an up-front charge of $1,150. After the customer pays the fee Foreclosure Solutions hires an attorney who does nothing more than file an answer to the foreclosure. When the foreclosing lender files a motion for summary judgment, the attorney abandons the case and the house eventually goes to sheriff's sale."

In addition to the upfront fee, the foreclosure rescue arrangement allegedly required the homeowners to deposit their monthly mortgage payments into "escrow" with Foreclosure Solutions.

The lawsuit asserts the following claims: (1) violations of Ohio's Consumer Sales Practices Act & Home Solicitations Sales Act, (2) misrepresentation, (3) civil conspiracy, and (4) infliction of emotional distress. Representing the homeowners are the Legal Aid Society of Southwest Ohio, LLC and Cincinnati attorney Matthew Brownfield.

For a copy of the lawsuit, see Dorn, et al. vs. Foreclosure Solutions, LLC, et al. (lawsuit available online courtesy of WCPO-TV Channel 9 in Cincinnati).

For the WCPO-TV Channel 9 online story, see People With Homes In Foreclosure Say They Were Victimized By Blue Ash Firm.

For The Enquire online story, see Mortgage 'rescue company' faces suit (Homeowners mad at foreclosure group).

Go here for the Press Release (Legal Aid Society of Southwest Ohio, LLC.)

Maryland Homeowner Still Battling Foreclosure Rescue Operator For Her Home Equity

WBAL-TV Channel 11 has a report on Michael Powell and Amanda Mende, Powell's business partner, who are currently being sued for allegedly running a foreclosure rescue scam on a Glen Burnie, Maryland homeowner in which they are accused of tricking her out of the title to and equity in her home which she claims to be over $100,000. Attorney Michael Gregg Morin, who filed a lawsuit on her behalf claiming the deal to rescue her home broke Maryland law, calls it "a classic foreclosure rescue fraud. It's what is forbidden by the law that was passed in 2005."

The law passed in 2005 can be found at Sections 7-301 through 7-321 of the Maryland Real Property Law (Protection of Homeowners in Foreclosure - Each section of the statute has its own link).

To see foreclosure rescue operator Michael Powell literally be chased around by Channel 11 I-team investigative reporter Barry Simms while refusing to answer Simms' questions, go here to watch the WBAL-TV report (no lonhger available online).

To read the online report, see Woman Claims To Be Swindled In Foreclosure Feud.

Go here for other posts on this story.

Possible Virginia Straw Buyer Flipping Scam Ends Up In Bankruptcy Court

The Virginian-Pilot reports:

• "A half-dozen investors in CM Development have asked a federal court to force the company and its president into bankruptcy in an attempt to recoup some of the millions they've spent on properties across Hampton Roads. If successful, the investors' move could spell the end of a company dogged by mortgage lenders, city code officials and creditors."

• "A Virginian-Pilot investigation in March found that about half of the 250 properties owned by CM Development and its investors were vacant and in various stages of disrepair. [...] The investigation also found that since forming in late 2001, CM Development has financed its operations largely by selling its properties repeatedly among a growing circle of investors at ever-higher prices. The investors, drawn by the promise of big returns, took out larger and larger loans on the houses."

Attorneys representing the six investors who filed the involuntary bankruptcy petition against CM Development said they had no choice. Reportedly, many of the investors haven't been paid in months and have been left to care for properties, mostly in Norfolk and Portsmouth, that now are going into foreclosure. The attorneys said company President Cary McEntee has said little about why payments were not made. For more, see Housing developer's investors ask federal court to step in.

Go here for posts and links to other stories on CM Development and Cary McEntee.

Connecticut Woman On Alleged Financial Fraud Rampage Arrested By Cops

The Bristol Press reports that Lori Wadman of Southington, Connecticut has been arrested by police on suspicions that she charged more than $20,000 on fraudulent credit card accounts she opened in her mother's name. According to sources for the story, Wadman had previously:

• (1) allegedly stolen money from community services, (2) been arrested in February after she allegedly stole about $225,000 from her employer by forging business checks, and (3) reportedly, took money from her husband's construction business and took her husband's share of their home equity by refinancing the mortgage on their home without his consent.

For more, see Police: Woman charged with credit-card fraud (no longer available online).

Virginia Homeowner Hauls Foreclosure Rescue Operator Into Court

While working on a post last week on New York City foreclosure rescue operator Home Savers ConsultingaCorp., I stumbled into a pending foreclosure rescue lawsuit against a Virginia rescue operator also using the "Home Savers" moniker. The lawsuit, being litigated in a Norfolk, Virginia Federal Court, is captioned Clemons vs. Home Savers LLC, and White and Selkin, and has been filed by Virginia Beach attorney Tanya Bullock of the firm Bullock & Cooper, PC on behalf of the plaintiff.

Among the causes of action asserted in the lawsuit are (1) equitable mortgage, (2) violations of the Federal Truth In Lending Act, Home Ownership & Equity Protection Act, and Federal Reserve Board Regulation Z, (3) breach of fiduciary duty & negligence, (4) fraud, intentional misrepresentation and deceit, (5) conversion, (6) unjust enrichment, (7) breach of the implied covenant of good faith & fair dealing, (8) violations of Federal & Virginia Real Estate Settlement Procedures Acts, (9) constructive trust and resulting trust, (10) action to quiet title, (11) violation of Virginia Mortgage Broker Lender Act.

For a copy of Clemons vs. Home Savers LLC, et al., drop me a line at HomeEquityTheft@yahoo.com and I'll e-mail you a copy.

Go here for information on other foreclosure rescue litigation filed by the law firm Bullock & Cooper. equitable mortgage yak

Baltimore Realtor Group Criticizes Last Minute Ground Rent Ejectment Suits

The Baltimore Sun reported last week:

• "Leaders of the Greater Baltimore Board of Realtors, which for years served as an advocate for ground rent owners, are criticizing some of them for rushing to seize houses of delinquent rent-payers ahead of a recent change in state law and are proposing to help affected homeowners. The Realtors are talking with the Community Law Center in Baltimore about using their charitable foundation to help pay for review of ejectment lawsuits to ensure that they were conducted properly and that fees are "reasonable.""

One official with the Greater Baltimore Board of Realtors is quoted, "It's one thing if someone is going to collect on a debt and collect what they're owed, but this is more like robbery. To lose all the equity [in one's home] they've accrued over all those years is just wrong."

For more, see Rush to ejectment criticized (Realtors reduce support for ground rent owners).

For links to the entire series of stories on the Maryland ground rent issue reported by The Baltimore Sun, see The Sun's ground rent series.

Go here for other posts on the Maryland ground rent issue.

Alabama Feds' Mortgage Fraud Investigation Focus On Orlando Businessman

The FBI is investigating convicted Florida cocaine dealer Robert B. Guest Jr. for alleged mortgage fraud in and around Montgomery, Alabama involving the purchase and subsequent resale of "100 houses," according to a story in the Montgomery Advertiser. Federal agents have reportedly conducted searches of the offices of Betts Realty and Appraisal Service and real estate brokerage Jerri Baker Real Estate LLC in Montgomery for records of home sales involving Guest. According to the story:

• "Acting through several companies, Guest is suspected of buying 100 homes, mostly in Montgomery, obtaining misleading appraisals and then reselling the rental properties within six months at two or three times the price he paid, according to a sworn statement by FBI agent Christopher P. LaCarter. [...] Each investor was required to put down 20 percent of the purchase price and the rest was financed through the home mortgage unit of Countrywide Financial Corp., a Fortune 500 company. [...] After the home sales closed, according to the FBI affidavit, Guest refunded the down payments to the investors. So Countrywide ended up funding the full price of the homes. Unhappy investors, realizing they cannot resell the homes for anywhere near what they paid, have begun filing lawsuits in Montgomery County Circuit Court. To date, the fraud suits claim economic losses of $1.4 million."

For more, see FBI inquiry involves area home sales.

The Subprime Bait & Switch

An opinion article appearing in In These Times expresses a not-so-flattering point of view of the subprime mortgage lending industry, the tactics employed by some loan originators that has left the subprime mess that we deal with today, and the inherent problems that are very difficult to regulate. Among the points mentioned are (1) the misrepresentation of a loan’s characteristics, such as the concealment of a fixed rate “teaser” period that adjusts upward after two years, (2) the use of bait-and-switch tactics to lure in potential borrowers, (3) the targeting of low-income and minority communities, and (4) “perverse compensation incentives” for “hazardous” loan products. For more, see The Subprime Bait and Switch (Under the guise of extending home ownership to all, predatory lenders undermine community reinvestment).