Monday, November 26, 2007

New Jersey Judge Relieved Of "Bench Duty" - Acted As Closing Attorney In Wide-Ranging Real Estate Fraud

In Garfield, New Jersey, the Herald News reports:
  • City Manager Thomas J. Duch has relieved Municipal Judge William C. Colacino Jr. of his responsibilities, after reports that Colacino was the closing attorney in a wide-ranging real estate fraud in Paterson. [...] Colacino has not been suspended but that could change if he is indicted, Duch said.

***

  • On Nov. 14, Mahwah real estate agent Michael Eliasof pleaded guilty to one count of conspiracy to commit money laundering. Eliasof oversaw an elaborate scheme between 2002 and 2005 to sell properties whose values were inflated to unqualified buyers. Colacino has not been named by federal prosecutors in court documents, but a review of mortgage applications and deeds by the Herald News showed that Colacino, who at one point had a private law practice, was the closing attorney on more than a dozen of those deals. [...] Last week, Colacino's assistant, Melanie Gebbia, pleaded guilty for failing to report to the Internal Revenue Service income she received in that same scheme.

For more, see Garfield removes municipal judge. See also, Garfield judge relieved of duties.

Go here for other posts on this ongoing story.

Go here for other posts on allegedly Naughty / Knuckleheaded Judges. naughty judges

Florida Couple Gets 4 Years For Stealing Land From The Dead

In Southwest Florida, The News-Press reports:
  • A Broward County couple convicted of stealing land from the dead in Lee, Charlotte and Collier counties will spend the next four years in federal prison. Howard and Sheila Henry fraudulently obtained between $200,000 and $400,000 in property from 2001 to 2005. They illegally acquired the property by forging documents and selling the land. The pair would use the Internet to find property with several years of unpaid taxes, then connect those properties to deceased people. [...] Both Henrys were convicted in federal court in Miami for charges in an unrelated real estate scheme and were sentenced late last year and early this year. They were both sentenced to less than four years and all sentences will run together.

For more, see Couple get 4 years for stealing land from dead.

Tampa-Area Real Estate Agent At Center Of Suspicious Transactions

In Tampa, Florida, the St. Petersburg Times reports a story of an anonymous letter accusing local real estate agent Lori Polin of contributing to the alleged mortgage fraud that has resulted in nine homes going into foreclosure. According to the story:
  • In a letter to Re/Max's Denver headquarters, the Pinellas Realtor Organization and many of her fellow agents, an anonymous sender claims Polin "artificially inflated" the prices of nine homes in Tampa and North Pinellas so buyers could get larger loans.

  • Most of the houses were mortgaged for far more than the actual sales price, with the buyer or a third party pocketing the difference. Except for well-documented renovations, such "cash-back-at-closing" transactions can be a sign of mortgage fraud. In one transaction, $109,000 went to a construction cleanup company although there is no evidence of any construction or cleanup up since the run-down Clearwater house sold last year.

  • That house and the others listed by the anonymous sender are all now in foreclosure proceedings, contributing to a Florida foreclosure rate that is the nation's third highest.
    "The buyers purchased multiple properties in short periods of time to avoid lenders detecting multiloan transactions and fraud," the letter charges. "Lori's contribution to this fraudulent activity has distorted property values and undermined neighborhoods."

For more, including reported details of several of the identified home sales which, on their face, doesn't paint Polin in a good light, see Unsigned letter accuses agent of mortgage fraud (Real estate agent says it may be a rival using smear tactics).

Cops "Foreclosure Evict" Right Family From Wrong Home

In Imperial, Missouri, the Suburban Journals of Greater St. Louis reports:
  • The Jefferson County Sheriff's Office is working to put a family they wrongly evicted back into their home. Ron and Sandy Page of Imperial came home Thursday to find all their belongings covered in tarps on their front lawn. Capt. Ralph Brown of the Jefferson County Sheriff's Office said the Pages had once owned the home deputies were supposed to go to, which was on the same road. "We had the right people, but the wrong address," he said. "They owned the property, but it went back to the bank. The bank wanted possession of the house."

***

  • When the sheriff's office realized the mistake, they worked quickly to get the Pages back into their home. "We hired a mover, put them up in a hotel, hired a cleaning crew and even bought them dinner," [Brown] said. Sandy Page said things were still "a little bit of a mess," but was satisfied the sheriff's office was doing everything possible to make amends.

For more, see Deputies carry out eviction order at wrong house.

NBC Nightly News On Renters Feeling The Mortgage Crunch

Last Wednesday night, the NBC Nightly News ran a report on the problems renters are facing when they unwittingly rent a place to live from a financially overextended landlord whose intent is to pocket the rent, stiff the mortgage holder out of its mortgage payments, and allow the property to go into foreclosure (referred to in some statutes as rent skimming or equity skimming). Two tenants are interviewed for the story: one is a grandmother that has already faced eviction on three separate occasions as a result of renting from three landlords who allowed their properties to go into foreclosure; the other is a family who reportedly got screwed over in a "rent-to-own" arrangement where the seller pocketed the rent without applying the funds to the mortgage payment.

To watch the news report, see Renters feeling mortgage crunch. NBC's Mike Taibbi reports from Minneapolis, Minnesota.

For other posts involving rent skimming and lease/option scams, see Tenants Unwittingly Renting Homes In Foreclosure I , II , III , and IV; and "Rent To Own" Scams I. equity skimming unwittingly gamma rent to own lease purchase option scams zebra

Sunday, November 25, 2007

Tips For Tenants To Avoid Hassles That Come When Renting From Landlords Facing Foreclosure

According to The Modesto Bee:
  • Being forced to move when a rental house is foreclosed on can disrupt renters' lives and prove costly. Housing and legal experts say there are steps renters can take to protect themselves.
For the protective steps recommended by the experts that renters can take (1) before you rent a home, (2) after you've rented a home, and (3) after foreclosure, see Tips for renters.

Note: Some of the information given in the story regarding the "notice to vacate" requirements is based on California law. Accordingly, that portion of the information may not apply to tenants outside California. Check the law of your home state for the applicable notice to vacate requirements. equity skimming unwittingly alpha beta gamma delta

Wall Street Journal On Tenants Facing Foreclosure Eviction

The Wall Street Journal reports:
  • As U.S. foreclosures soar, renters -- especially in small apartment buildings and single-family homes -- are paying a high price for their landlords' financial troubles. Across the U.S., thousands of people are being evicted.

***

  • Often, the small multifamily dwellings entering foreclosure are in older urban neighborhoods with a lower-income population. That's the same demographic, critics say, that was targeted by predatory lenders peddling mortgages with introductory "teaser" rates that reset to higher rates. "The biggest problem in this industry is that you could buy a three- or four-family home with no money down," said Anthony Rondeau, a vice president of Select Financial Mortgage Corp. in East Providence, R.I. "[Mortgage] brokers were shoving this through the system -- it didn't matter that I didn't do it, because someone else would."

For more, see Tenants Pay as Landlords Default (Foreclosures Void Leases, Bring Eviction Notices; Bigger-Building Benefit) (requires subscription; if no subscription, try here; then click link).

For posts related to tenant evictions due to foreclosure, see Tenants Unwittingly Renting Homes In Foreclosure I , II , III , and IV. equity skimming unwittingly gamma

Legal Services Agency "Inundated" With Tenants Facing Foreclosure Eviction

In Providence, Rhode Island, The Providence Journal recently ran a story on the problems local residents face when renting homes that end up in foreclosure. Among the problems is the stress being placed on a local legal services office by the increased demand of renters needing legal help and dealing with deteriorating pre-eviction living conditions:
  • The Rhode Island Legal Services office in Providence has been “inundated” with cases of tenants who are being evicted by banks involved in repossessing foreclosed houses, said Robert M. Sabel, the agency’s litigation director. “Before, it was an occasional case — once every four or five months,” Sabel said. “Now we’re seeing them daily.”
Some of the deteriorating pre-eviction living conditions for tenants caused by landlords in foreclosure are described as follows:
  • A landlord who stops paying the mortgage may fall behind on other bills. Then the faucets run dry and furnaces go cold.

For more, see Collateral damage.

For some information for Rhode Island tenants facing a foreclosure eviction, see Issues for renters facing foreclosure. equity skimming unwittingly gamma

Rent Skimming Problems In Minnesota

KTTC-TV (Rochester, Minnesota) reports on the local problems of financially overextended landlords pocketing tenant rentals while stiffing the mortgage holder out of its monthly mortgage payments:
  • Mona Hoeft with Olmsted County Housing and Redevelopment Authority says they receive tons of calls from families being tossed out on the streets including those receiving government subsidies. "Unfortunately there's not much a tenant can do other than move. There really is no protection for the tenant," says Hoeft. "It's frustrating for us to know we are paying money really for nothing. So the landlord can take that money we are paying them and use it for something besides paying the mortgage," says Hoeft.

For more, see Renters Rights. equity skimming unwittingly gamma

Tenants In Entire Building Forced Out Due To Rent-Skimming Landlord

In Rhode Island, a recent story by The Providence Journal describes the stress being placed on local social services agencies due to the increase in local residents facing financial struggles.

Among other accounts, the story tells of the actions of a local landlord that resulted in the displacement of all of his tenants (about nine rent-paying tenants) out of one building. In addition to milking the rent out of his building without paying the mortgage and the water bills, he allowed the property to fall into extreme disrepair, not to mention foreclosure. The tenants lost their water service and, shortly thereafter, local building inspectors deemed the building uninhabitable. The cops ended up coming by one day without notice and announced that the building had been condemned and ordered everyone to leave, giving them two hours to vacate the premises. The building is now locked and boarded up, awaiting further action by the city and a foreclosure sale by the mortgage holder - scheduled for December 7. For the story, see The worst of times?

For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here, or here. equity skimming unwittingly gamma

Foreclosure Purchasers Liable For Refund Of Tenant Security Deposits In California

In California, The Modesto Bee reports on the story of a tenant in California who rented from a landlord facing foreclosure. After foreclosure, the tenant was forced to move, but was promised a refund of her security deposit by her now-former landlord. The landlord never refunded the money. According to the story, in California:
  • Civil Code Section 1950.5 states that the property's new owners "shall be jointly and severally liable with the landlord for repayment of the security" deposit. That means that if the previous owner/landlord doesn't follow the law and return the security deposit, then the new owners have to pay the tenant what is owed. In [this tenant's] case, that was $1,000.

After being contacted by The Bee, the foreclosing mortgage holder and now new owner sent the tenant a check for $1,000. For more, see New owners liable for refunding deposit. equity skimming unwittingly gamma

Some Tenants Victimized Multiple Times By Landlords Facing Foreclosure

In Northern California, The Modesto Bee reports on the problems many tenants are having with their landlords who are engaging in what some statutes call "equity skimming" (California law calls it "rent skimming"), the practice where financially overextended landlords rent out their property and pocket the rent collected from their tenants while stiffing the mortgage holder out of its monthly payments, thereby allowing the property to go into foreclosure:
  • It happened to Shari Torigian of Patterson three times in three years. Cheryl Vrba of Los Banos said it happened to her four times in four years. It is happening now to Alexis Grijalza of Modesto and her three children. Renters are being forced out of houses every day in the Northern San Joaquin Valley after homeowners default on mortgages and lenders foreclose. The result often is financial hardship for renters who had no clue their shelter was in jeopardy.

  • "It is stressful. Where are we going to stay now? We have three kids, and my baby was just born Oct. 3," lamented Grijalza, who recently learned the Vernon Avenue house she's been renting for more than a year was repossessed by lenders. The lenders insist she move, but Grijalza doesn't have a car or good credit. She's fearful she'll become homeless.

  • To convince her to move out, the lenders offered to pay her $1,500 if she'd leave in two weeks. That's called "cash for keys," a technique some lenders use to avoid the time-consuming eviction process. Many home renters say such compensation doesn't begin to cover the cost or hassle of moving.

After being screwed over three times in three years by landlords allowing their properties to go into foreclosure and before signing her next lease, tenant Shari Torigian reportedly checked out her most recent landlord's credit and references, researched public records about the home's ownership to assure it's not in the process of being foreclosed on, and insisted the owner sign a three-year lease that guarantees all her expenses will be paid if she's forced to leave.

The story also makes the following points on two laws that may provide protection to California renters in these circumstances:

  • California Civil Code Section 890-894 enables tenants to sue landlords who, during their first year of ownership, collect rent but don't pay their mortgages. Tenants can sue to recover actual damages, including moving costs and security deposits, plus attorney's fees and costs. The court also may award tenants exemplary dam-ages of at least three times the amount of actual damages.

  • California Civil Code Section 1950.5 [subsections (h) and (j)] enables tenants to sue their previous landlords and the current property owners, including lenders who get the property after foreclosure, for the return of security deposits.

For more, see A renter's dilemma: Foreclosures can hit those who don't own (Foreclosure pits unwary against landlords, lenders) (if link expires, try here).

For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here, or here. equity skimming unwittingly gamma

Families Losing Homes Without Ever Missing Payments

The Sarasota Herald-Tribune reports:
  • In the foreclosure crisis of 2007, thousands of American families are losing their homes without ever missing a payment. They are renters in houses whose owners default on their mortgages — a large but little noticed class of casualties. [...] Many renters say they never even knew their buildings were heading for foreclosure. “This is an explosion,” said Judith Liben, a lawyer at the Massachusetts Law Reform Institute. “This isn’t business as usual. These are investors that overleveraged themselves, and the renters are collateral damage in the mortgage crisis.”

***

  • The [U.S.] House [of Representatives] on Thursday passed a broad mortgage act that includes protections for renters. The House act, which the lending industry has opposed, would require new owners to continue the leases of tenants for up to six months after foreclosure. [...] The House bill calls for new owners — usually lenders — to give tenants a 90-day notice before foreclosure, then continue leases for up to six months after. Renters without leases would have 90 days to leave the property.

Despite a lease that runs until January 2009, one of the tenants described in the story has reportedly already packed all nonessential items in their garage — everything but clothes, linens, cookware and furniture — in case they have to leave in a hurry. Said the tenant: “It’s not normal to live like this. And the worst part is not knowing if we’re going to have a note on the door tonight, tomorrow or the next day.”

For more, see As Owners Feel Mortgage Pain, So Do Renters.

For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here, or here. equity skimming unwittingly gamma

Saturday, November 24, 2007

NY Attorney Charged With Swiping $300K Of Clients' Money

On Long Island, New York, the Nassau County District Attorney recently made this announcement:
  • Nassau County District Attorney Kathleen Rice announced today that Joseph Levine, a 59-year-old recently disbarred attorney from Hewlett, has been arrested and charged with stealing more than $300,000 from two clients he was hired to represent in legal matters during the past year. Mr. Levine is facing felony counts of Grand Larceny in the Second and Third Degrees, and two counts of Criminal Possession of a Forged Instrument in the Second Degree.

According to the allegations in one case:

Levine counseled one client to settle a personal injury lawsuit that awarded his client $300,000. He traveled to the Pennsylvania office of the insurance carrier to pressure the insurance company into cutting the check immediately because his client’s daughter was having heart surgery and needed the money. After being issued the $300,000 check by the insurance adjuster, Levine then forged the signatures of his client and her husband and deposited the check in his bank account. After three months of writing dozens of checks from his account, his balance on the account stood at a negative $139.44. To date, the client has not received any of the settlement proceeds.

Reportedly, The Lawyers Fund for Client Protection of the State of New York has reimbursed Levine’s client $250,000 since the theft. The fund was established in 1982 and serves as a reimbursement mechanism for client funds that are lost due to the dishonest conduct of lawyers licensed in New York State.

According to the allegations in a second case:

Levine received a $10,000.00 down payment on a home in May to hold on behalf of a client. The sale fell through and in response to the client's request for a return of the money, Levine suggested that he should hold on to the funds, in the hopes that he could resurrect the real estate deal. The client continued contact with Levine throughout the summer about the money but has yet to receive a refund.

For more, see DA: Lawyer Pocketed $300k from Clients (Levine stole personal injury settlement from a client trying to pay for her daughter’s heart surgery).

For those ripped off due to dishonest conduct by a New York attorney, see The Lawyers Fund for Client Protection of the State of New York.

For other states, see:

Florida Attorney Disbarred; Mortgage Money Mysteriously Goes Missing While Acting As Closing Agent In Real Estate Deals

In Pinellas County, Florida, the St. Petersburg Times reports that the Florida Supreme Court has recently disbarred attorney Richard Joseph Da Fonte of Clearwater for "conduct involving dishonesty, fraud, deceit or misrepresentation" and "application of trust funds or property to specific purpose" in connection with his involvement in two real estate deals where money went missing. According to the story:
  • In the first, he acted as the closing agent for the sale of a single-family residence. But instead of paying off two pre-existing mortgages on the property in accordance with the terms of the agreement, Da Fonte diverted $230,000 to an unknown third party, said Karen Lopez, an attorney with the Florida Bar. "We don't know where the money went," said Creston Nelson-Morrill, a Bar spokeswoman. The original mortgage holder filed for foreclosure, and while Attorneys' Title Insurance Fund managed to hold off the bank, the fund lost more than $300,000 as a result of Da Fonte's actions, according to the disbarment on consent signed by Da Fonte.

  • In the second case, Da Fonte, working as an escrow agent and closing agent, failed to disburse $715,000 earmarked as loan proceeds. The deal didn't close even though the bank and buyer, who had begun making regular loan payments, believed it had.

For more, see Lawyer disbarred, two others are disciplined (Diverted mortgage funds led to the disbarment).

See Theft Of Escrow Funds I and Theft Of Escrow Funds II for other stories of trust account / escrow account theft of funds. sneaky slick escrow agents beta

Florida Attorneys Disciplined For Playing Fast & Loose With Clients' Cash

The North Country Gazette reports that, in Florida:
  • The Florida Bar, the state’s guardian for the integrity of the legal profession, has announced that the Florida Supreme Court in recent court orders disciplined 29 attorneys, disbarring eight, suspending 13, emergency suspending two, placing three on probation and reprimanding five. Some attorneys received more than one form of discipline.

Of the 29, the following 12 have been disciplined for playing fast and loose with their clients' cash and/or property:

  • Richard Charles Bagdasarian, Boca Raton, disbarred. Bagdasarian misappropriated client funds totaling more than $1.17 million from about 41 different clients and made material misrepresentations to his clients to conceal his misappropriation and conversion to his own use of the funds.

  • Angelo Cappelli, St. Petersburg, disbarred. Cappelli was a trust officer in a bank and without the knowledge of or authorization from the bank opened an estate using a summary probate procedure. He then used his position to gain access to about $100,000 from a deceased customer’s estate and used about $75,000 of the funds.

  • Richard Joseph Da Fonte, Clearwater, disbarred. Da Fonte served as the closing agent in one real estate transaction and represented the buyer as well as acted as closing agent and escrow agent in another. In one instance, funds were diverted that were intended to pay off two pre-existing mortgages. In the other, Da Fonte failed to tell his client or the bank making the loan that the closing had not occurred. When the bank learned that the transaction had not closed, Da Fonte failed to account for the loan proceeds and to return them to the bank.

  • Chandra Parker Doucette, Boca Raton, suspended. Doucette was found in contempt of court for her failure to respond to subpoena issued by the Court, which ordered her to provide mandatory trust account records.

  • Michael T. Kovach, Inverness, the subject of an emergency suspension, pursuant to an Oct. 31 court order. Kovach has failed to respond to three subpoenas commanding him to appear for a deposition and to produce trust account records. A Bar investigation indicated that he converted client funds from his trust account for his own personal purposes.

  • Albert Scott Lagano, Melbourne, disbarred for 10 years. Lagano was found guilty of five counts related to trust fund shortages and the commingling of trust funds and operating funds of a number of clients. An audit found that, between August 2005 and November 2006, Lagano withdrew cash from his trust account or transferred to his office account a total of more than $1 million. He failed to maintain trust account records supporting these withdrawals and transfers.

  • Peter Malo, disbarred. In August 2001, Malo was disbarred by the New York state bar based on charges of commingling and misappropriation of client funds or property.

  • Joey Dean Oquist, St. Petersburg, suspended for two years. A bar auditor found evidence of shortages in Oquist’s trust account. It was determined that he failed to maintain the required cash receipts and disbursement journal and client ledger cards.

  • Anthony Vincent Scalese, Pembroke Pines, suspended, until further order of the court. Scalese failed to produce trust fund records compelled by a subpoena issued in the course of a Bar investigation into the management of his trust account and was held in contempt of court.

  • Marie Gilberte Thompson, Miami, disbarred. Thompson failed to comply with a subpoena for her trust account records. Records of a real estate transaction obtained from third parties showed that she received nearly $821,000 for payment of a mortgage loan. She failed to apply the trust funds to the specific purpose of paying off the mortgage and had insufficient funds to do so.

  • Ruben Torrence Thompson, Miami, disbarred. Thompson failed to comply with a subpoena for his trust account records. Records of a real estate transaction obtained from third parties showed that he received nearly $821,000 for payment of a mortgage loan. He failed to apply the trust funds to the specific purpose of paying off the mortgage and had insufficient funds to do so.

  • Kendrick Gerard Whittle, Miami, the subject of an emergency suspension, pursuant to an Oct. 23 court order. Whittle failed to produce bank and trust records in response to a subpoena. However, bank records show that he issued checks to himself totaling nearly $298,000 from client funds and used them to pay other clients and for personal matters such as rent, credit cards, Gables Sports Cars and Saks 5th Avenue.

Source: 29 Florida Attorneys Disciplined, Eight Disbarred. sneaky slick escrow agents beta

Friday, November 23, 2007

Freddie Mac Sued By Shareholder; Class Action Status Sought

Reuters reports:
  • A shareholder sued Freddie Mac, its chief executive and others on Wednesday, alleging the No. 2 U.S. home funding company did not take adequate steps to protect itself from problems in the mortgage industry. Scott Reimer, a shareholder, said in the complaint filed in U.S. District Court in Manhattan that Freddie Mac, Chief Executive Richard Syron and some other executives did not adequately implement risk control measures to protect the company from acquiring billions of dollars worth of mortgages with poor underwriting standards. "Moreover, the company's procedures for appraisals led to many inflated appraisals, increasing the risk of defaults," it said. "Ultimately, the company has reported billions of dollars in losses, has been mentioned in investigations by the New York attorney general and announced it must raise new capital to meet regulatory requirements."

The suit seeks class action status. For more, see Freddie Mac sued over mortgage problems.

See also, News Gets Worse for Freddie As Shareholders File Lawsuit (Mortgage Firm Accused of Deception on Risk) (The Washington Post).

Ex-Detroit Cop Charged In Mortgage Fraud, Forgery

The Detroit Free Press reports:
  • A fired Detroit police officer was charged ... with three felonies on allegations that he forged the signature of Wayne County Clerk Cathy Garrett to paperwork in an attempt to receive a mortgage loan. County officials announced forgery and other charges against D’Clarence Reynolds, 27, of Detroit, in a case that left Wayne County Sheriff Warren Evans baffled. “It’s hard to believe that anyone, particularly a former police officer, would forge the name of a county official and not think it would raise a red flag,” Evans said ... .

For more, see Former Detroit cop charged with fraud in mortgage scheme.

Phony NYC Lawyers Sentenced For Scamming Dozens In Real Estate Deals

In Staten Island, New York, the Staten Island Advance reports:
  • Their claims to be lawyers were bogus, but what's very real are the lengthy prison terms and the $14.1 million that two Staten Island brothers must repay unwitting homeowners and lenders they bilked in real-estate deals in Nassau County. James LaForte Jr. and Joseph W. LaForte fronted a Mineola, L.I., law firm that acted as attorneys for banks in real-estate transactions. Along with their parents and other conspirators, they ripped off three dozen personal clients and lending institutions of more than $14 million over the 17 months ending in August 2005, prosecutors said.

For more, see 2 brothers head to jail for duping homeowners (LaFortes must pay back $14.5 million to victims of bogus-lawyer scam).

Three Philadelphia Men Face Charges Of Stealing Homes From Out From Under Homeowners

In Philadelphia, Pennsylvania, WCAU-TV Channel 10 reports:
  • Three men involved in a real estate scam faced a Philadelphia judge [last] Friday. They're charged with forging deeds and stealing homes right out from under their owners. The NBC 10 investigators have been telling you about this unique city crime problem over the last couple of years. It's not hard to steal a house in Philadelphia. Often no one checks forged documents filed at City Hall. You say your brother gave you the house for a dollar and then take possession, NBC 10's Lu Ann Cahn reported.

***

  • In court [last] Friday, [homeowner Susan] Thompson looked at Michael Crosby, Carl Fooks and a third suspect, Charles Faust and told the judge she had never seen the men before, even though somehow her deed said she sold her house to one of them "for a dollar," she said.

For more, see 3 Men Accused Of Forging Documents, Stealing Houses For $1.

Stealing Vacant Lots Gets Disbarred Lawyer 12 Years In Pen

In Chicago, Illinois, the Chicago Tribune reports:
  • Phillip Radmer, a disbarred Berwyn attorney who created phony corporations and invented board members to steal the properties of poor churches, nonprofit groups and businesses, was sentenced Tuesday to 12 years in prison. "Mr. Radmer has ruined a lot of people's lives in this case," Cook County Circuit Judge Stanley Sacks said in imposing the sentence for theft and forgery. Representatives of six churches told the judge that the scheme forced them to spend scarce resources to untangle the mess left behind by Radmer over who rightfully owned the properties.

For more, see Ex-lawyer gets 12 years for lot thefts (Berwyn man faked real estate deals).

Go here for other posts on Phillip Radmer.

Thursday, November 22, 2007

Arkansas Manufactured-Home Company Owner Gets 2+ Years On Mortgage Fraud, Tax Charges

The Associated Press reports:
  • In addition to serving 30 months in federal prison, a Searcy woman who pleaded guilty to mortgage fraud and filing false income tax returns will have to pay $120,000 in restitution to victims. Federal Judge Susan Webber Wright sentenced 54-year-old Debby Cossitt [Monday].

Reportedly, Cossitt was owner, manager or operator of several manufactured-home sales companies in Searcy, Batesville, Jonesboro and Harrison who admitted falsifying mortgage-loan application documents to increase her business, including inflating bank balances of those buying homes, the size of down payments, and incomes. For more, see Sentence for mortgage fraud includes restitution.

Minnesota Man Again A Target In Mortgage Fraud Prosecution

In Minneapolis, Minnesota, the Minneapolis Star-Tribune reports:
  • A Minneapolis man sentenced on a federal mortgage fraud charge in 2001 now faces Hennepin County charges involving at least $1.2 million in mortgages that stretched from Bloomington to Blaine. Larry D. Maxwell, 52, was charged Monday with 10 counts in the alleged mortgage fraud, including racketeering. Also charged with nine counts of forgery, identity theft and theft by swindle was Realty Executive Advantage Plus Group. The real estate brokerage was operated from Maxwell's north Minneapolis riverfront condo.
***
  • The complaint against Maxwell lists four other uncharged conspirators in the racketeering count. They are Vickie Cox-Maxwell and Larry Scott, his wife and son and both agents of Realty Executive, mortgage broker Terrece Large of Worldwide Mortgage, Inc., where Maxwell was a loan officer, and Halisi J. Edwards-Staten, listed as the real estate broker for Realty Executive.

For more, see A second time around on mortgage fraud charges (A Hennepin County investigation continues with four others named as uncharged conspirators in the case).

Tennessee Trio Facing Federal Fraud, Conspiracy Charges In Alleged Mortgage Scam

In Middle Tennessee, Tenessean.com reports:
  • An almost two-year joint federal and state investigation has resulted in the arrest of three Sumner County men in an elaborate mortgage fraud scheme involving the purchase of 22 luxury homes in Hendersonville and Gallatin by unqualified “straw” buyers. Harold Stafford of Hendersonville and Miles Jackson Black and Jeffrey Dunn Hatchcock of Gallatin, were each charged with one count of conspiracy, 21 counts of wire fraud and three counts of bank fraud following a two-year investigation. In addition, Stafford faces 25 counts of money laundering.

***

  • According to the indictment, Stafford, the owner of Stafford Lease Group, Stafford Holding Group and Keys to Success, agreed with the builders and sellers of the 22 luxury homes to find buyers who would purchase the homes at prices that were $10,000-$165,000 more than their original asking prices. [...] The builders and sellers agreed to pay Stafford any amount of the sale that exceeded the original asking prices of the homes, federal court records show. Stafford recruited seven unqualified straw buyers with good credit histories to apply for first and second mortgages on multiple properties where the purchase price was greater than the seller’s original asking price, according to the indictment.

For more, including a detailed timeline of the alleged scam activities, see Mortgage fraud scheme results in three arrests.

For the U.S. Attorney's press release, see Three Sumner County Men Indicted For Mortgage Fraud Scheme.

Wednesday, November 21, 2007

The American Dream Shattered: The Dream of Homeownership and the Reality of Predatory Lending

From the Massachusetts Attorney General's office:

Attorney General Martha Coakley has released a report about new consumer protection regulations governing mortgage lenders and brokers. “The American Dream Shattered: The Dream of Homeownership and the Reality of Predatory Lending,” is a summary report of statewide hearings held on proposed mortgage regulations that the Attorney General’s Office held in September. The report includes an analysis of the concerns of residents and businesses of Massachusetts as well as state, local and federal officials who are also considering remedies to address the foreclosure crisis. The report also briefly discusses the reasons that stronger consumer protection regulations are necessary in making the mortgage lending marketplace more transparent and fair.

Read the report, "The American Dream Shattered: The Dream of Homeownership and the Reality of Predatory Lending".

Elderly Chicago Woman Victimized In Predatory Lending Scam; Brings RICO Charges Against Lenders

New York Times' Op-Ed Columnist Bob Herbert recently recounted the story of an elderly Chicago, Illinois woman who is facing the loss of her home in an alleged predatory lending scam:
  • Like vultures, the mortgage lenders began circling the single-family house with the tiny front lawn on Merrill Avenue. They knew that the woman who owned the house was old and sick and that her two aging daughters were struggling with illness and poverty as well. That was all to the good as far as the lenders were concerned. The predator’s mission is to home in on the vulnerable. “The people that wanted to put through the loan called me about a hundred times,” said Rosa Dailey, who is 65 and going blind and needs an oxygen tank at times to help her breathe. “I kept telling them no, because I didn’t think we could afford it. But they kept saying how it was to our advantage. So I finally said: ‘All right, let’s see what we can do.’ ”

For more, see A Swarm of Swindlers (may require registration; if no registration, try here).

Ms. Dailey's mother and older sister are now dead and she is facing the loss of her home. Chicago, Illinois Attorney William Spielberger has taken up Ms. Dailey’s case by filing a federal Racketeering (RICO) lawsuit on her behalf in September against Citi Residential Lending, a subsidiary of Citigroup that acquired Argent Mortgage, as well as WM Specialty Mortgage, a subsidiary of Washington Mutual, and (the curiously named) Integrity First Mortgage.

Judge's Aide Cops Plea To Federal Tax Charge; Admits Role In Eliasof North Jersey Flipping Operation

In Newark, New Jersey, The Star-Ledger reports:

  • A legal assistant to Garfield's long-time municipal court judge pleaded guilty yesterday to federal tax fraud charges in connection with a widespread mortgage scam tied to the judge. Melanie Gebbia, 33, of Wanaque waived indictment and admitted preparing fake mortgage settlement documents in exchange for more than $50,000 in cash and checks that she never reported on her income tax returns.

  • The subprime mortgage deals involved the sale of more than a dozen ramshackle residential properties in Paterson that were quickly sold at inflated prices to buyers with no money. Most of the houses ended up in foreclosure, leaving banks holding worthless loans. Gebbia worked for William Colacino Jr., an attorney who has served as Garfield's municipal court judge for more than 20 years. He has not been charged in the case and was only identified in court papers by his initials as an unindicted co-conspirator. However, a separate civil fraud lawsuit spelled out Colacino's role as the closing attorney in the sale of at least five of the Paterson properties.

The guilty plea was a result of an ongoing criminal investigation that has so far led to the indictment of several housing enforcement officials and caseworkers in Paterson on charges of bribery and conspiracy, and has also resulted in last week's guilty plea by local real estate agent Michael Eliasof, 63, of Mahwah to money laundering in orchestrating a series of fraudulent mortgages that netted him and others between $1 million to $2.5 million. For more, see Garfield judge's aide admits subprime mortgage fraud (no longer available online).

See also, Involved in Paterson real estate scheme (Herald News - 11-21-07) (no longer available online).

  • "Well-known New York City criminal defense attorney Ronald L. Kuby said Gebbia had entered into a standard agreement to cooperate with the government in which the more the defendant produces for prosecutors, the greater the likelihood her sentence will be reduced. "Her job now is to produce evidence against others. The most likely 'other' here is the judge (Colacino)," Kuby said. "I'm not suggesting the judge has done anything wrong. I am suggesting that it sounds like the government thinks the judge did something wrong. You don't deal with the legal assistant so she can implicate the janitor. "If I were the judge (Colacino), I would start scraping together bail money." "

Editorial: Look what greed wrought (Herald News Editorial, 11-20-07) (no longer available online).

Go here for other posts on this ongoing investigation.

Two (Now Disbarred) Florida Attorneys At Center Of Real Estate Scam Accusations

In South Florida, the Miami Herald reports:
  • As expected, following Nov. 13's Action Line on land sales involving unlicensed broker Daniel Stephen, (if link expired, try here) his company, First Loan Solution, and the firm of lawyer Marie Estime-Thompson, we received calls from additional readers who said they were victims of unscrupulous dealings. Yvonne Walker of Pembroke Pines said she paid Stephen and Estime-Thompson's firm about $20,000 in 2005 for acreage in Taylor County (along the Panhandle) to which she never received legitimate title. Calls to the Thompsons' firm in North Miami rang either busy or disconnected.

  • Merlyn McKenzie of Miramar called in a similar complaint, saying she paid Stephen and the Estime-Thompson firm $9,250 as a down payment for a lot in Madison County.
    What we didn't expect was to hear from family.

  • Between them, Marie Estime-Thompson and her husband, Ruben Thompson (also a lawyer), have to their names five Miami-Dade properties; all are in foreclosure. One of them, ... , in downtown Miami, is a historic building in the heart of Overtown that, until March 30, 2005, belonged to Brenda Killens Evans, a cousin of Ruben Thompson's.

***

  • Evans ... filed a complaint with the Florida Bar. In response to Bar inquiries, Thompson disputed Evans' allegations and claimed she had sold him the property. Then, on Oct. 18, both he and his wife were disbarred, at their request, which shut down the Bar's investigation.

For more, see Bad real estate deals dash family dreams. (no longer available online).

To file a complaint against a Florida attorney, go to The Florida Bar's Attorney Consumer Assistance Program (ACAP) for more information.

If a Florida attorney is representing you and screws you out of money or property through dishonest conduct, go to The Florida Bar's Clients' Security Fund for more information.

For other states, see the Directory Of Lawyers' Funds For Client Protection (American Bar Association - July, 2007); or try this Google search.

NYC Real Estate Appraiser Faces 397 Count Indictment For Bogus Valuations; Stealing Other Appraisers' I.D.

From the office of the Queens County District Attorney:
  • In a 397-count indictment, D & T National Appraisals, Inc., and its CEO, Donato Odato, 54, ... , have been variously charged with second- and third-degree forgery, criminal possession of a forged instrument, first- and second-degree falsifying business records, first- and third-degree identity theft, first-degree scheme to defraud and fifth-degree conspiracy. Odato faces up to seven years in prison if convicted. The corporate defendant faces a fine of up to $10,000 for each felony count conviction or double the amount of the illegal gain.

  • [A]ccording to the indictment, Odato ... recruited licensed appraisers over the Internet and offered them positions with his company as part of a ruse to steal their personal identity information. Thereafter, it is alleged he would forge the names of the prospective job seekers on numerous appraisals that he filed in connection with residential mortgage applications.

  • It is further alleged that Odato took advantage of the Internet’s anonymity, as well as his own background as a former licensed assistant appraiser, to fraudulently induce lenders and other real estate professionals to use his company’s claimed appraisal services. It is alleged that instead of actually doing the appraisal work, Odato would simply concoct information on real estate values from various sources and then inflate the values to match mortgage applications.

For more, see the Queens County DA Press Release - Queens Real Estate Appraisal Firm And CEO Indicted In Alleged Scheme That Inflated Real Estate Values (Allegedly Stole Identities of Other Appraisers As Part of Scheme).

First American To Fork Over $5 Million In Alleged Kickback Racket

In Florida, the St. Petersburg Times reports:
  • Florida's second-largest title insurance company will pay $5-million to settle charges that it ran an elaborate kickback scheme to build its business, state and federal officials said Friday. Regulators say that First American Title Insurance Co. illegally paid real estate agents, mortgage brokers, banks and home builders for referrals by making them partners in sham title companies. Eighty-four of these companies were created to funnel business to First American and payments to those making the referrals, authorities said.
For more, see Title company to pay $5M (First American says it did nothing wrong but agrees to close partnership companies).

Go here for other posts involving legal issues related to title insurance. title insurance legal issues

Campaign Against Foreclosure Rescue, Sale Leaseback Deals Intensifies In UK

In the United Kingdom, U.K. Personal Loan Store posts:
  • Over recent months sale and rent back scheme have been hitting the headlines on a regular basis, and have not been viewed in a good light by many officials and campaigners. With more and more people facing repossession in the UK due to higher interest rates and repayments these firms have crawled out of the woodwork offering these vulnerable consumers a chance to stay in their homes and eliminate the risk of repossession. This is through selling their home to the company and then renting it back from them.

  • However, campaigners state that these firms are paying way below market value on the properties, with some sellers receiving just 60% of the actual value of the property. Then there is no guarantee with regards to how long the former homeowner will be able to stay in the property beyond the first six or twelve month tenancy. Campaigners and groups are now urging the government to act on this problem to stop any more consumers suffering at the hands of sale and rent back companies.

For more, see Campaign over sale and rent back schemes increases.

For a related post, see Foreclosure Rescue, Sale Leaseback Deals "An Unregulated Free-For-All" In Great Britain.

For more on equity stripping scams, generally,see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Tuesday, November 20, 2007

Houston Courts Handing Out Stiff Sentences In Mortgage Fraud Prosecutions

In Houston, Texas, the Houston Chronicle reports on the stiff sentencing going on in mortgage fraud cases. According to the story:
  • As the meltdown of the subprime mortgage market plays itself out in Houston, prosecutors are getting some stiff sentences fighting fraud that grew from weaknesses in the industry.

***

  • The mortgage-fraud defendants are winding up with more severe sentences than the Enron crew ... . The highest penalty meted out in Enron was the 24-year sentence for ex-CEO Jeff Skilling. But in the last month in Harris County courts, three people have been sentenced to 25 years in prison for mortgage fraud, and a fourth received a 40-year sentence.
For more, see Mortgage fraud cases yield tough sentences (Man received 40 years in prison for his role in skimming scheme).

Pennsylvania Man Cops Federal Plea In House Flipping Operation; Investigation Focusing On About 200 Deals Continues

In Erie, Pennsylvania, the Erie Times-News reports:

  • [Robert L.] Dodsworth -- a central figure in [an] ongoing federal mortgage-fraud investigation in Erie -- pleaded guilty in U.S. District Court in Erie on Monday to felony conspiracy and money-laundering charges related to the probe. With the plea, Dodsworth, 60, became the first and, so far, only person to admit wrongdoing in the mortgage-fraud investigation, which the FBI, Internal Revenue Service and other agencies initiated in 2004.

  • Dodsworth admitted to working with others to falsify mortgage applications for homebuyers, most of them poor and unsophisticated, who otherwise would have been unable to afford mortgages and buy houses.

  • The investigation that included Dodsworth has focused on the sale of nearly 200 Erie homes. The FBI and other agencies have been looking at whether the sales involved inflated appraisals or other fraudulent information that led those buyers to pay far more than market value for their homes. Most of the sales occurred in low-income Erie neighborhoods, and most of the financing was arranged through subprime mortgages ... .
For more, see Guilty as charged (Restitution part of plea in mortgage-fraud case).

For more on this scam, see Money from suburbs helped finance inner-city fraud.

For story update, see Fraud probe figure seeks lawyer (Court appoints public defender for businessman) ("Another local businessman has been connected to the federal criminal probe of suspected mortgage and housing fraud in Erie. Several low-income homebuyers claim the businessman, Keith A. Rice, acted as an ad-hoc real estate agent when they purchased their properties. Rice, 49, last week requested that a federal public defender be appointed to represent him as part of a criminal case in U.S. District Court in Erie.").

Go here for other posts related to this story.

Pennsylvania AG Files Civil Suit Against Man For Bilking Consumers In Unlicensed Real Estate / Mortgage Activity

The Pittsburgh Post-Gazette reports:
  • Pennsylvania Attorney General Tom Corbett yesterday said he would ask federal prosecutors to open an investigation into a North Hills real estate broker and his associates, saying James C. Platts and his company, Easy Realty Solutions, flagrantly violated state and federal laws. "This guy's a con artist. He just keeps shifting schemes," said Mr. Corbett, whose office had previously won fines against a Platts-operated rent-to-own scam.

  • This time, investigators say he moved on to a wide-ranging home sales operation that falsified incomes to enable unqualified buyers to obtain mortgages, filed fraudulent liens against homes he was selling to extract money from the sellers, created fraudulent second mortgages and practiced law without a license. The liens, known as "lis pendens," were used to guarantee Mr. Platts a profit on sales because his real estate license had been revoked several years ago and he would not have been permitted to collect a sales commission.

The Pennsylvania AG filed a 54-page, 13-count complaint against Platts which noted that his deals frequently included duplicate and conflicting settlement papers, called HUD-1s. The suit asks the court to declare more than $1.2 million in second mortgages void; void an estimated 159 lis pendens that Platts recorded against various properties; and force Platts to refund defrauded parties in an estimated 115 home sale deals since 2004. The suit asserts that Platts engaged in the unlicensed practice of real estate and mortgage brokerage.

For more, see State going after real estate broker.

See also:

For earlier reports on Platts, see:

Two Sentenced For Selling Elderly Couple's Home Out From Under Them

In Louisville, Kentucky, The Courier-Journal reports:
  • Two of the four people involved in a scheme to sell a Cherokee Triangle home they did not own have been sentenced in U.S. District Court. Freddie Johnson, 39, and Marilyn Rainey, 60, both of Chicago, had pleaded guilty to aggravated identity theft and mail fraud in connection with two fraudulent loans on the home of Russell and Sally Riggs ... last November. The group managed to sell the Riggses' home -- without the couple's knowledge -- twice within a week. The Riggses have lived in the century-old home since 1966. Johnson was sentenced to more than six years in prison, and Rainey received more than two years in prison, according to U.S. Attorney David Huber's office.

***

  • Russell Riggs, who is retired from a large law firm, and his wife were able to clear up the property's deed with the help of a few legal associates who contacted him after the story was in the local media.

For more, see 2 sentenced in home-selling scheme.

Upstate NY Man Sells Elderly Parents Home Out From Under Them

In New Windsor, New York, the Times Herald-Record reports:
  • It took just five months for Paul Tartaglia Jr. to be arrested, spill his guts to police and shuffle off to state prison for selling his parents' house out from beneath them. Now comes the hard part for Paul Tartaglia Sr. and his wife, Angela: getting back their house.

  • When their son took a plea-bargain in September, he pleaded guilty to grand larceny, which covered the money from the bogus home sale and money he took from a former girlfriend who bore him a son. Between all his victims, Tartaglia's on the hook for $338,000. But Tartaglia's plea didn't provide an explanation for how he stole the money. He didn't explain the sale of his parents' house.

  • That leaves Paul and Angela Tartaglia mired in a civil suit with, among others, their son, a mortgage company, a bank, a title insurance company and a Bronx man who somehow received legal authority — called power of attorney — to act on behalf of the Tartaglias and sell the house on a placid block in New Windsor, where they've lived for nearly 40 years.

  • Paul Tartaglia Sr. says he found out about the sale by accident earlier this year, when he went to Town Hall to pay a water bill and discovered it had already been paid by a complete stranger. The Tartagalias also found out that someone had taken out a new mortgage on their house.

For more, see House-selling scam leaves parents in bind.

For story update, see Fake legal form tangles case of home-sale scam (Times Herald-Record - 11-24-07).

Go here , go here , and go here for other posts on elder financial abuse.

Go here for other deed theft posts. deed theft zorro yak

Convicted Disbarred Lawyer Land Swindles Another While In Jail, Says Report

In Chicago, Illinois, the Chicago Tribune reports:
  • A disbarred Berwyn lawyer awaiting sentencing for selling vacant lots that belonged to a Chicago church pulled off a similar scam while incarcerated in Cook County Jail, according to records and interviews. In the latest bogus transaction, Phillip Radmer sold property on the city's West Side that belonged to Providence-St. Mel School -- without the school's knowledge -- to a savvy real estate investor and developer.

***

  • A Tribune investigation last year disclosed a series of complicated real estate transactions in which Radmer created dozens of sham corporations and phony buyers to steal more than 60 vacant lots from poor churches, non-profits and corporations. Following the reports by the Tribune, Radmer was arrested in June 2006 at his Berwyn home and has been in County Jail since.

For more, see Records show land swindler at it again -- from jail (Ex-lawyer sold lot belonging to school).

See also, Land swindler pulls off another scam while jailed.

For an earlier story on the theft of lots, see Report: Land Sold Without Church's Permission (cbs2chicago.com).

Go here for story update on Phillip Radmer.

Buyers Of Condo Conversions In Aging Buildings Beginning To Have Nightmares

In South Florida, the Miami Herald reports:
  • Their first home should be their joy. But Michelle Fernandez and her fiancé, Efrain Uribe, are bitterly regretting buying a place from a developer converting a high-rise apartment complex into condos in North Miami Beach. Now, they say, they're stuck with shaking elevators, exposed pipes, badly stained hallway carpets, a flooded laundry room and even mold in the couple's air conditioning closet.
***
  • Others who have bought condo conversions have discovered they're on their own to fix code violations, an aging infrastructure and faulty equipment. In some cases, that means the new condo associations are levying thousands of dollars in special assessments for repairs.
***
  • Some new owners complain cities don't find code violations in converted buildings until after the developers have sold all the units, says state assistant condo ombudsman Bill Raphan. In fact, some developers did little more than cosmetic work while converting aging apartment buildings, he says.

  • One woman [said] that she had to take out a $15,000 line of credit to pay a special assessment for repairs after she moved into her converted unit -- only to discover that her new condo association was planning another assessment to cover more work.

Once the condo owners in these old buildings (at least those who financed 70% or more of the purchase price) figure out that they now have little or no equity to salvage in their units, I suspect many will opt for "mailing in the keys" to the mortgage holder rather than having to foot the bill for stiff repair assessments. The mortgage holders will once again be left holding the bag; my condolences to those unit owners who paid cash.

For more, see New condo conversions bring broken promises (Unhappy owners are complaining about units in disrepair and faulty equipment) (when link expires, try here).

Go here for other posts related to the Miami condo market problem.