Countrywide Settlement Offer Rejected In Alleged Phony Docs Case

In Pittsburgh, Pennsylvania, The Wall Street Journal reports:

• A bankruptcy judge has rejected Countrywide Financial Corp.'s proposal to settle accusations that it fabricated evidence used in a bid to foreclose on a home, saying he wants to know more about the alleged false documents. Judge Thomas Agresti of the U.S. Bankruptcy Court in Pittsburgh on Tuesday dismissed the company's request to settle a dispute with Sharon Diane Hill, a Pittsburgh-area woman who was threatened with foreclosure by the country's largest home lender.

***

• Details of the settlement proposal were filed under seal, which Judge Agresti said was unjustified. He also said the settlement documents were deficient because they failed to reveal what Ms. Hill's lawyers found out about the alleged fabricated evidence.

***

• On Tuesday, Judge Agresti said he wouldn't approve a settlement until he got to the bottom of Countrywide's suspected forgeries. He said he was concerned about "the potential effect that a settlement in this case may have in other cases involving Countrywide."

For more, see Judge Rejects Countrywide Plan To Settle Suit on Foreclosure Bid.

See also, Subprime Legal: Judge Dings C’wide Settlement Over Alleged Forgeries.

Go here for other posts on the Countrywide matter in the Pittsburgh federal bankruptcy court.

Go here, Go here and Go here for more on recent Countrywide problems with consumers.

Ohio Statewide Foreclosure Training For Pro Bono Attorneys Continues

In Ohio, the Circleville Herald reports:

• In recognition of Law Day, state officials have announced new foreclosure legal training dates and are reminding attorneys of the opportunity to serve pro bono to assist homeowners facing foreclosure as part of Ohio's Save the Dream foreclosure prevention effort, which in the past month has gained recognition as a national leader in addressing the problem. [...] Beginning May 9 through the end of June, 17 free training sessions will be held around the state covering the basics of foreclosure. Attorneys can receive 5 1/2 hours of CLE credit for completing the sessions.

***

• An April 16 report by The Pew Charitable Trusts [or go here for Pew Press Release] ranked Ohio's foreclosure response as one of the three best in the country. U.S. News & World Report, in an April 21 story, labeled Ohio's foreclosure prevention program as one of the country's most "ambitious." The state also receives daily inquiries from other states interested in following the Ohio model, which is unique in its approach of consolidating all foreclosure prevention resources into one unified, statewide program.

***

• [Ohio] Homeowners facing foreclosure can call the Save the Dream hotline (888-404-4674) to see if they meet the income and other eligibility requirements to be connected with a pro bono or legal aid attorney. Qualified homeowners will be connected with a local legal aid program to be matched with an attorney. Basic income eligibility is 250 percent of the federal poverty guidelines, which is about $53,000 annual income for a family of four.

For more, see Ohio treasurer visits Rotary (Cordray pitches plan to help homeowners).

Sale Of $1B In Tax Certificates For Delinquent Real Estate Taxes Expected In South Florida

In South Florida, The Miami Daily Business Review reports on the upcoming annual late spring ritual throughout Florida whereby county tax collectors convert unpaid real estate taxes into tax certificates sold to investors:

• [A]n estimated $1 billion worth of real estate tax lien certificates will be auctioned off in South Florida beginning June 1 and officials in Miami-Dade, Broward and Palm Beach counties do not expect a shortage of buyers. “It has become a hot item for investors,” said Polly Cacurak, manager of the revenue collection department in Broward County. [...] Investing in a tax lien certificate is almost like lending money to a homeowner with delinquent property taxes, except the investor deals directly with the county.

For more, see Unpaid Taxes (Tax certificates no longer a get-rich quick scheme).

Go here for an illustration on how Florida's tax certificate sale process works.

Go here for an illustration on how Florida's tax deed sale process works.

Massachusetts AG Files Housing Discrimination Complaint Agains Mobile Home Park For Failure To Accomodate Disabled Homeowner

From the office of the Massachusetts Attorney General:

• Attorney General Martha Coakley’s Office filed a housing discrimination complaint [last week] in Franklin Superior Court against Leisure Woods Estates, Inc., the owner of Leisure Woods Mobile Home Park in Orange, Massachusetts. The complaint alleges that Leisure Woods Estates, Inc. violated state anti-discrimination laws by failing to permit a disabled homeowner to install a handicap ramp to enable the homeowner to enter his property.

• The disabled homeowner, aged sixty-four, who has lived in the park with his wife since 1993, recently underwent multiple foot surgeries to address a chronic mobility problem. The surgeries resulted in a permanent physical disability, which makes it extremely difficult for him to walk without assistance and to navigate the stairs to his home. The homeowner planned to pay for the construction of a ramp to his door himself, and requested approval from Leisure Woods Estates. Leisure Woods Estates allegedly refused to approve the ramp, citing purported aesthetic considerations. It is unlawful to discriminate by refusing to make reasonable accommodations for someone with a disability.

For more, see Attorney General Martha Coakley Sues Park Owner For Housing Discrimination.

Struggling Developer Files Bankruptcy As Opportunistic Competitor Acquires Delinquent Mortgage & Seeks Foreclosure On Unfinished Townhouse Project

In Deland, Florida, the Daytona Beach News Journal reports:

• The struggling developer of Carriage Homes, a planned [74 unit] luxury town-house project with just 11 units built -- and only two sold -- sought bankruptcy protection from creditors Tuesday, averting a foreclosure sale scheduled for hours later. [...] Only one unit is occupied, as a rental. Adjacent lots in the gated development are overgrown with weeds and littered with trash.

***

• Another developer, Bob Horian, president of Suncor Properties, said he held the lien on the property and was seeking foreclosure in hopes of completing the project himself. Suncor had acquired the security on the project from Colonial Bank and in March won a $3.4 million foreclosure judgment against it. Horian said he had expected to take possession of the property in a proceeding scheduled for Tuesday.

For more, see Foreclosures foiling future? (Carriage Homes seeks protection) (media report no longer available online).

Charges In Alleged Deltona Deed Theft Scam Forwarded To State Attorney

In Deltona, Florida, the Daytona Beach News Journal reports:

• [Lester] Williams is one of several people swindled in a real estate scam in which scammers literally stole some houses right out from under owners, investigators said. In many of the cases, a simple deed document was forged. Investigators said they don't know how the ring of Deltona scammers chose their victims. Some properties were facing a pending foreclosure. In another, the owner had recently died. In other cases, nothing was out of the ordinary. It could happen to anyone, investigators said.

• The Volusia County Sheriff's Office said it sent charges relating to the scam against four people in three cases to the state attorney. A spokeswoman for the State Attorney's Office said Tuesday prosecutors are reviewing the cases. Formal charges have not been filed.

Among those targeted by investigators are:

1. Cynthia L. Fuentes, 47, who also uses the last names Fontanez, Aleman and Fontanez-Aleman, who faces charges of six counts of grand theft and three counts of operating an organized scheme to defraud,
2. Fuentes' daughter, Cindy R. Fuentes, 26, who faces charges of two counts of being a principal to grand theft,
3. Notary Mark Hittell, 49, a retired corrections officer for the Seminole County Sheriff's Office, who faces charges of two counts of grand theft and being a principal to grand theft, as well as charges of scheming to defraud and forgery, and
4. Hittell's wife, Doris, 41, who currently is a corrections sergeant for the Seminole County Sheriff's Office. She faces a charge of scheming to defraud and two counts of grand theft, according to investigators.

The story includes this blurb on Doris Hittell's personnel file with Seminole County:

• Her personnel file contained three incidents of possible theft from inmates during the intake process at the jail where she works. In one instance she was given a written warning and ordered to repay nearly $1,500 to the agency's inmate account over a period of eight months. In another, she was forced to pay $100 and received a verbal warning. The third accusation was deemed unfounded.

For the story, see Turbulent housing market breeds deed scams.

Go here, go here, and go here for other posts on deed theft by forgery, swindle, etc. deed theft xenon

Mortgage Broker Faces Forgery, Theft Charges In Alleged Scam Resulting In Foreclosure Of Victims' Homes

In Pennsylvania, The Philadelphia Inquirer reports:

• A Delaware County couple had to put their wedding on hold after losing two properties at the hands of a disbarred lawyer turned mortgage broker, authorities said. Joseph James Scafidi, 53, of Warminster, a former Bucks County prosecutor and convicted felon, turned himself in [last week] to face theft and forgery charges. He is accused of fabricating documents, including a phony court order from Delaware County's president judge, to hide his theft of mortgage payments.

***

• After the couple lost both houses [to foreclosure], they confronted Scafidi, who offered them $150,000 if they did not report him to police, the complaint said.

Reportedly, Scafidi's prior brush with the law occurred in 1996 when he consented to disbarment after he was accused of embezzling $264,000 in real estate settlement fees from a Fort Washington title company. He served a 10- to 23-month prison sentence in 1998.

For more, see Broker accused of stealing mortgage payments.

Go here for other posts on Joseph James Scafidi.

More On Three Facing Federal Charges In Alleged Palm Beach County Flipping Scam

In Palm Beach County, Florida The Palm Beach Post reports on the criminal allegations facing Berry Louidort and Ralph Michel (also known as Ralph Duverneau), who are accused of putting together deals for two dozen homes in Palm Beach County, persuading banks to loan far more than the properties actually sold for, then pocketing the difference and letting many of the homes lapse into foreclosure; and Boca Raton mortgage broker Lauren Jasky who is accused of helping Louidort and Michel arrange the deals.

• There's Michel - a native of Haiti who, according to his attorney, can't read or write well enough to pass a U.S. citizenship test - collecting "assignment fees" of $650,000 and $600,000 on side-by-side homes in the Versailles development in Wellington.

• There's Louidort, also a native of Haiti, describing a scheme to buy 50 condos in Boynton Beach while stealing $4 million from lenders. He thinks he's talking to a willing accomplice. In fact, he's laying out the plot to an undercover FBI agent who captures the conversation on videotape.

• There are straw buyers, such as the part-time Publix cashier whose income on loan applications was inflated from $13,000 to $344,000 so she could qualify for $1.3 million in loans on a palatial home in a gated community in Boca Raton.

• There's Jasky saying she doesn't want to know the unsavory details of the loans she's shopping to lenders. Meanwhile, her mother is acting as the Realtor on some of the deals.

• And there are some of the world's most sophisticated financial institutions, including JPMorgan Chase and Bank of New York, making loans on these properties for twice what they were worth.

For the rest of the story, see 3 charged in mortgage scam called 'economic parasites'.

See also, U.S. Attorney Press Release: Palm Beach County Residents Charged With Mortgage Fraud.

Countrywide Admits Errors, Denies Misconduct In Testimony To Senate Panel

In Washington, D.C., The Associated Press reports:

• Mortgage lender Countrywide Financial Corp., which is under investigation for inflating certain borrowers' fees, acknowledged Tuesday that it has made errors and pledged to take steps to improve its operations. Steve Bailey, chief executive for loan administration at Countrywide, told a Senate panel that the company's employees have made mistakes "from time to time." He said the company will hire an outside auditor to review its actions in cases involving homeowners who have filed for bankruptcy court protection. But he disputed accusations, made by hundreds of borrowers in Pennsylvania, Florida and other states, that the company has sought to collect inflated fees and other payments by filing inaccurate bankruptcy documents.

***

• Sen. Charles Schumer, D-N.Y., chairman of the panel, criticized what he called a broader "vulture mentality" in the mortgage lending industry. "Companies have repeatedly sought to foreclose on homes where owners were current on payments, sought attorneys fees in bankruptcy court for motions that they have lost, and failed to keep even the most basic records to justify their claims in bankruptcy court," he said.

For more, see Countrywide Financial Admits Loan Officers Made Errors.

In a related story, see The Atlanta Journal Constitution: Georgia family puts face on mortgage crisis:

• Facing criticism from a Georgia family and senators of both parties, a Countrywide Financial Corp. executive said Tuesday that the company had a new plan to keep mortgage processing errors from harming homeowners. But Steve Bailey's testimony before the Senate Judiciary Committee could not shift the spotlight away from the giant lender's role in the loss of the Atchley family's home.

White House Issues Veto Threat To Democrat Housing Plan

In Washington, D.C., The Associated Press reports:

• The White House on Tuesday threatened a veto of Democrats' broad housing rescue plan, calling it a burdensome bailout that would open taxpayers to too much risk. [...] Democrats' housing plan, written by Rep. Barney Frank, D-Mass., would allow the Federal Housing Administration to insure up to $300 billion in new mortgages for struggling homeowners currently too financially strapped to qualify for such loans. [...] "You can't always get what you want, exactly. But this is a very real effort to reach out and find common ground," Frank said.

For more, see Bush threatens veto of housing aid.

Vacant Land Owners Victimized By Deed Theft Ring, Scam Involved Parcels Worth $23M

In Riverside County, California, The Press Enterprise reports:

• [Albert] Rivera was one of 10 landowners victimized by thieves who in 2003 and 2004 used forgery to secretly seize title to 25 vacant parcels in Perris, Murrieta, Menifee, and unincorporated areas of southwest Riverside County. Even though the Riverside County district attorney's office successfully prosecuted the forgery ring, the rightful landowners learned that it takes a lot of grief, money and time to undo a phony transaction once it is recorded in the county system. All the victims got their land back, but not without hiring lawyers. Since a recorded deed is presumed to be authentic under state law, they said they were advised to file lawsuits to "quiet title," claiming they had been swindled.

***

• Since 2004, she said the Riverside County district attorney's office has received complaints about deed forgeries on about 1,000 properties.

Among those on the hook for the damages is First American Title Insurance Company, who forked out $200,000 on a claim under a title policy it issued to an unwitting purchaser who was left holding bogus deeds on four lots (presumably, there were a slew of other title insurance claims by other unwitting land purchasers).

While the victims of the theft got their property back, they nevertheless sufferred significant losses in the form of:

• unreimbursed attorney's fees for the civil lawsuits they were forced to bring to void the bogus deeds and to "quiet title" to their land, and
• for some, the lost opportunity to sell their land before the real estate market tanked,
• higher property tax bills because the phony sales triggered reassessments (the district attorney had to get a court order to restore the properties to their original assessed value).

For more, see:

• Owners fight to regain land lost to forgers,
• Experts say ownership of land must be proven.

Go here, go here, and go here for other posts on deed theft by forgery, swindle, etc. deed theft xenon

Foreclosing Lender Locks Out Michigan Homeowner, Locks In Pets Despite State's Six Month Redemption Period

In Schoolcraft, Michigan, WWMT-TV Channel 3 reports:

• With the economy and the housing market in a downward spiral, foreclosures keep popping up. It's a reality one Schoolcraft man faces. Jaret Sweet admits he can't keep up with his home payments and surrendered to the fact he'll lose his home. But he says the bank crossed the line in his foreclosure process. Sweet says he came home one day to find a notice on his door, all of his locks changed and his pets and belongings trapped inside.

• Foreclosure rules in Michigan say that a homeowner can live in a house for as long as six months after notice is given. Sweet says he would have used the time to gather his things and move out, but he didn't get that chance. His realtor agrees this was a shady deal. "All I can think is sloppy procedures or disregard for the processes that are in place to protect consumers," said Paul McIntyre, Sweet's realtor. The realtor's heard of at least five other cases like Sweet's. He says the aggressive foreclosure climate is causing banks to either ignore or forget the rules.

Source: Bank accused of shady foreclosure practices.

Go here for other posts on foreclosure services companies who have improperly change locks, remove belongings, etc. ForeclosureLockOuts

Northern Virginia Man Cops Plea In Serial Refinancing Scam

In Northern Virginia, The Washington Post reports:

• [John A. Tsiaoushis, 40,] The former owner of a string of Washington area nightclubs and restaurants pleaded guilty [last week] to federal mail fraud and false-testimony charges relating to a series of real estate scams that netted him more than $3.8 million. [...] Tsiaoushis filed for bankruptcy in October 2005. But by that time, he had begun a series of mortgage frauds in which he repeatedly sold or refinanced two houses in Vienna and in the Fort Hunt area of Fairfax County.

According to the story, Tsiaoushis' scheme involved the diversion of funds earmarked for the payoff of existing liens on the two homes he repeatedly sold or refinanced. Among his alleged escapades were:

1. creation of documents purportedly from the mortgage companies involved,
2. opening local post office boxes,
3. presentation of phony documents indicating that all liens had been resolved,
4. creation of phony bankruptcy court order,
5. directing the real estate settlement company to send the payoff checks to the post office boxes which were purported to belong to the mortgage companies involved, at which point, Tsiaoushis would pocket the checks.

For more, see Ex-Club Owner Pleads Guilty in Mortgage Scams.

California Feds Charge Tenant With Bank Fraud For Attempt At Obtaining $500K Credit Line On Rented Home

From the U.S. Attorney's Office for the Central District of California:

• A man who was renting a Valley Village home has been arrested on federal bank fraud charges for allegedly attempting to secure a $500,000 home equity line of credit on the house. Eduard Sargsyan, 55, was arrested by special agents with the Federal Bureau of Investigation last [month] after completing loan documents at a Bank of American branch in Sherman Oaks.

• According to a criminal complaint [...], last fall Sargsyan rented the Valley Village home, which was owned by a family trust. In February, a “Trust Transfer Deed” was recorded with the Los Angeles County Recorder’s Office, which transferred title of the home to Sargsyan. In March, Sargsyan used Bank of America’s website to apply for a home equity line of credit on the property. During two meetings at Bank of America where an FBI agent posed as a loan officer, Sargsyan said he owned the home and wanted prompt funding of a $500,000 line of credit. Sargsyan was arrested at the bank branch.

For the U.S. Attorney's press release, see Valley Man Charged With Attempting To Obtain $500,000 Credit Line On House He Was Renting.

Go here, go here, and go here for other posts on deed theft by forgery, swindle, etc. deed theft xenon

Rent Scam Offering Cheap Rent On Craigslist Victimizes As Many As 50 Families

In unincorporated Covina, California, the Whittier Daily News reports:

• It could be any street in any city anywhere in Southern California. A swing set, two or three basketball hoops, white picket fences; a view of the foothills framed by tall palms. Stucco homes with stone trim, vegetable gardens, well tended roses, lawn statues; the stars and stripes proudly displayed as if to say, "Here is my piece of the American Dream." That's the scene looking north on Calera Avenue in unincorporated Covina. So when a three-bedroom, one-bathroom piece of the American Dream became available here for just $1,200 a month, who could blame folks for wanting it? Even if the offer came via Craigslist. All prospective tenants had to do was bring $2,400 - that's first and last - and be ready to move in May 1.

• Sheriff's detectives suspect as many as 30 families did just that. Now they are looking for homeowner Pardeep Singh, who apparently cleaned out his bank account and fled last week in a Range Rover towing a U-Haul.

For the rest of the story, see:

• Housing scam steals dream (no longer available online),
• Number of Craigslist victims increases (no longer available online),
• Picture of fraud suspect emerging (if link expires, try here),
• Dozens are expected to file lawsuit (if link expires, try here).

Go here and go here for other posts on tenant victims of rent hoaxes. unwitting tenant rent scam yacht

50+% Of 2006 Homebuyers Now Underwater, Says Report

MarketWatch.com reports:

• Home values in the first quarter of 2008 fell 1.6 percent from the fourth quarter and 7.7 percent from the year-ago quarter, marking the most significant year-over-year decline in the past 12 years, to a U.S. Zindex(R) home value indicator of $213,000, according to the Zillow.com Q1 Home Value Report released today. The median U.S. home value has not been this low since the second quarter of 2005, leaving more homeowners who purchased in 2005 or later with negative equity than any quarter previously reported by Zillow.

For more, see U.S. Home Values in Q1 Post Largest Decline in More than a Decade, Falling Back to 2005 Levels (More than half of homeowners who purchased during U.S. market peak in 2006 are now underwater on their mortgages, according to Zillow.com(R) Q1 2008 Home Value Report).

More On Major Lenders Freezing HELOC Accounts In Response To Declining Home Values

Bloomberg News reports:

• Countrywide Financial Corp. has suspended the home equity credit lines of almost all its Las Vegas customers, including the $60,000 Christopher Whipple says he needed to expand his cell-phone accessories business. "I hope this doesn't break me,'' the 35-year-old retailer said. His credit score was 790 out of a possible 850, putting him in the top 40 percent of borrowers. "It's going to hurt more than I thought.''

• Since January, Countrywide, Bank of America Corp., Washington Mutual Inc. and IndyMac Bancorp Inc. have frozen about 600,000 equity credit lines nationwide, said Michael Kratzer, president of a Bankrate Inc.-owned Web site that's fielding consumer complaints. The lenders are targeting borrowers in cities where property values are falling, including Las Vegas, Chicago and Los Angeles, he said. Frozen credit and real estate declines are putting a chill on spending and hurting the economy.

For more, see Countrywide Takes Away Home-Equity Credit Lines in Las Vegas.

For a related story, see AmTrust Bank freezing Home Equity Lines of Credit for certain customers (read story) (watch video).

Go here for other posts on Frozen HELOCs.

Massachusetts Appeals Court Upholds Injunction Restricting Fremont Foreclosures In Predatory Lending Case

In Boston, Massachusetts, Reuters reports:

• A Massachusetts [appeals] court has upheld an injunction to force cash-strapped mortgage lender Fremont General Corp to halt all foreclosures in the state to give local authorities time to review each mortgage.

***

• After Fremont gives notice that it intends to foreclose, [Massachusetts Attorney General Martha] Coakley then has 45 days to object to any foreclosures that are deemed "presumptively unfair." If she objects, Fremont must get the court's approval to proceed, Coakley's statement said.

• The ruling said a loan would meet the definition of "presumptively unfair" if it was an adjustable rate mortgage with an introductory period that was three years or less, or if it had a beginning "teaser" interest rate that was at least 3 percentage points lower than the fully indexed rate.

• Such loans also included ones made to borrowers whose debt-to-income ratio would have topped 50 percent if Fremont had measured the debt by the amount due under the fully indexed rate rather than under the teaser rate.

• A loan would also be deemed "presumptively unfair" if it had a substantial penalty or one that lasted beyond the introductory period, she added.
  But the injunction does not free borrowers from having to make their monthly mortgage payments, the statement said.

For the story, see Mass. upholds ruling to halt Fremont foreclosures.

For Massachusetts AG press release, see Appeals Court Judge Upholds Preliminary Injunction Against Fremont in Predatory Lending Case.

Go here for earlier posts on the Massachsuetts court injunction imposed upon Fremont General Corp.

Discount Mortgage Investors May Make Loan Mods Easier

The Los Angeles Times reports:

• [I]nvestors — including big fish such as former Countrywide Financial Corp. President Stanford Kurland as well as smaller fry like [chief executive of G8 Capital Evan] Gentry — are buying loans on the cheap from lenders who want them off their books. By paying less than face value for the mortgages, the new holders can modify loan terms, including shrinking the amount owed, and still make money.

• With some economists projecting 2 million foreclosures this year, legislators and regulators are hoping to encourage use of this model. They want lenders and investors in mortgage bonds to mark down what borrowers owe and provide them with lower-cost loans. It's a tricky business: No one wants to be seen as bailing out speculative buyers or imprudent lenders, but they also don't want mass foreclosures.

For more, see Investors move in to save broken mortgages (Homeowners who owe more than their property is worth are offered new terms) (if link expires, try here).

In a related story, see Twin Cities' Lender Seeks To Buy, Work Out Problem Mortgages.

Eight Cop Guilty Pleas In Cleveland-Area Mortgage Scam

From Cuyahoga County, Ohio Prosecutor Bill Mason's office:

• Cuyahoga County Prosecutor Bill Mason announced that eight of ten defendants pled guilty in the first case brought to trial investigated by the Cuyahoga County Mortgage Fraud-Predatory Lending Task Force. On July 31, 2007, ten defendants—seven individuals and three corporations—were indicted on racketeering and theft-related charges for fraudulently obtaining $560,000 in financing to purchase seven Cleveland properties priced at $594,000. Five of the seven properties are either in foreclosure or have been sold through the foreclosure process.

• "These thieves, lying and deceiving to make a quick buck, are leaving entire neighborhoods blighted and abandoned. Communities are being robbed of tax revenue used for schools, roads, and police," said Prosecutor Bill Mason. "They deserve to go to jail."

For the whole story, see 8 Defendants Plea Guilty to Cleveland Mortgage Fraud Case (Eight of Ten Defendants Pled Guilty in $560,000 Mortgage Fraud Case Involving 7 Cleveland Houses).

Straw Buyer Sues Tax Preparer For Leaving Her Holding The Bag On Pair Of $2M Homes

In Hamilton County, Ohio, The Enquirer reports:

• Francisca Webster owns two multi-million dollar Homearama houses in Mason and a third expensive house in Maineville, but she’s never lived in them and can’t afford to pay one month’s mortgage, much less the 40-year loans she got for the houses. So, how does a middle-class woman – who is so broke she can barely afford the Westwood house she really lives in – wind up owning $5 million in houses? Lies, fraud and scams, Webster claims.

• In a lawsuit in Hamilton County, she insists she was scammed into helping her tax preparer in a scheme that left him with lots of money and her fighting for her financial life. Webster had her taxes done for years by Eric Duke. As he prepared her 2006 taxes, Webster’s suit alleges, she mentioned how her job was being eliminated and she had $70,000 in debt. Duke told her he could help her eliminate that debt if she went into business with him.

For the rest of the story, see Three top-end houses, no money.

Appraiser Hit With $830K Judgment In Suit Over Inflated Appraisal

In Garfield County, Colorado, The Aspen Times reports: -

• A district court judge has ruled that a Basalt real estate appraiser must pay a bank $830,000 for assessing a Glenwood Springs home at an Aspen price. The judgment, which was recently slapped on Gary Beaver, came in the wake of a foreclosure, bankruptcy and lawsuit, all apparently spawned by an oversized appraisal. In 2004, Beaver appraised the Glenwood Springs home of Rodney and Donna Poland at $2.75 million, but when the couple defaulted on the loan and went bankrupt in 2006, a later appraisal showed that Beaver’s estimate was more than $1 million over the mark. A later appraisal valued the home, [...] in Glenwood Springs, at $1.1 million. Compass Bank, which held the note on the property and acquired the home in a foreclosure sale, won the recent $830,000 judgment from Beaver to make up for its losses.

For more, see Super-sized GarCo appraisal sparks a six-figure judgment.

Frank Issues Frank Warning To Lenders At Mortgage Bankers Meeting

In Boston, Massachusetts, Reuters reports:

• A bill that would expand refinancings of risky mortgages by requiring voluntary lender write-downs is the industry's last chance to improve their market without more drastic regulation, U.S. House Financial Services Committee Chairman Barney Frank said on Monday. "If this program, this set of inducements, for people to avoid foreclosure doesn't make much difference, what you will face next year ... will be much tougher rules about the home mortgage industry in general," he said at a Mortgage Bankers Association meeting in Boston.

For more, see US's Frank warns mortgage lenders of drastic rules.

Feds Turn Up Heat In Criminal Investigation Of Mortgage Industry

The New York Times reports:

• Federal agencies are intensifying a criminal investigation of the mortgage industry and focusing on whether some lenders turned a blind eye to inflated income figures provided by borrowers. The Federal Bureau of Investigation and the criminal division of the Internal Revenue Service have formed a task force to examine mortgages that were made with little or no proof of the earnings or assets of borrowers, a government official who had been briefed on the matter said Sunday. The group also includes federal prosecutors in New York, Los Angeles, Philadelphia, Dallas and Atlanta, said the official, who spoke on the condition that he not be identified.

For more, see Government Intensifies Mortgage Investigation.

North Carolina AG Files Suit To Shut Down Upfront Fee Foreclosure Rescue Operator

In Raleigh, North Carolina, WNCN Channel 17 reports:

• A Lenoir County company that targeted distressed homeowners with false offers to help save them from foreclosure has been ordered to stop taking consumers’ money, officials said Friday. Attorney General Roy Cooper filed suit against Alphin Marketing Group, Inc., also known as Alphin Group. Cooper alleges that the company and its owner broke state laws and he is seeking to permanently bar them from offering foreclosure assistance and debt adjusting services in North Carolina. Cooper is also asking the court to cancel the company’s contracts with consumers and pay refunds.

For more, see Company Swindled Homeowners, Attorney General Says.

See also the North Carolina Attorney General (May 2, 2008) Press Release: AG Cooper shuts down foreclosure assistance scheme (Company promised to save homes from foreclosure, pocketed money instead).

Feds Describe Elaborate Alleged Flipping / Money Laundering Scam Involving Failed Minneapolis Condo Project

In Minnesota, The Minneapolis Star Tribune reports:

• Federal investigators have identified the majority development partner in the troubled Sexton condominium project as the central figure in a mortgage fraud scheme involving about one-quarter of the units sold in the downtown Minneapolis building. In an affidavit filed [last] week in U.S. District Court in St. Paul, IRS agents say Brett Thielen orchestrated a mortgage flipping scheme involving 13 units at the redeveloped commercial building at 521 S. 7th St.

***

• The Sexton has 123 units, but fewer than 50 were ever sold, according to Hennepin County property records. The affidavit says Thielen laundered proceeds from the scheme by having his lawyer, Ben Houge, wire money to a lawyer in Australia, who then wired the money back to Thielen and others taking part in the mortgage fraud.

For more, see Feds outline condo fraud scheme (Investigators describe an elaborate scam at the Sexton project in downtown Minneapolis that included laundering illegal profits through a lawyer in Australia).

Go here for other posts on the Federal mortgage fraud investigation involving The Sexton.

Attorney, Associate Accused Of $800K Rip Off Of Real Estate Clients; Failed To Apply Closing Funds Towards Payoff Of Existing Mortgages, Say Lawsuits

In New Jersey, The Times of Trenton reports:

• A Hamilton lawyer and his associate face allegations that they swindled real estate clients out of nearly $800,000 by pocketing funds that should have been used to pay off mortgages after home sales.

• Michael J. Feehan, a Lawrence man with law offices in Hamilton, and Jason M. Bloom, of Warrington, Pa., are accused of misappropriating nearly $460,000 related to the sale of a West Long Beach home, according to a civil lawsuit filed earlier this month in Superior Court in Monmouth County. The plaintiffs, Michael A. Mastapeter and Anthony Masters, didn't find out until they received a foreclosure notice on Feb. 14, according to Robert J. Stack, their Kinnelon attorney.

• Meanwhile, another lawsuit alleging a similar fraud was filed in March in Mercer County. In that case, a Superior Court judge ordered Bloom's bank accounts frozen after he allegedly diverted $354,000 to his own use, according to court records.

For more, see Attorney, associate accused in bilkings (Pair allegedly stole $800G) (no longer available online).

If a New Jersey attorney is representing you and screws you out of money or property through dishonest conduct, go to the New Jersey Supreme Court's Lawyers' Fund for Client Protection for more information. For other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

Go here, Go here, and Go here for other stories of trust account / escrow account theft of funds. sneaky slick escrow agents gamma

Significantly Declining Home Values Cause Bank Suspension Of Homeowners' HELOCs

In Mentor, Ohio, WKYC-TV Channel 3 reports:

• If you drive down Case Avenue in Mentor you'll find lovely homes with flowering trees in a beautiful stable neighborhood. Residents, Mac Mahaffee and his wife, Linda where shocked to learn that their lending institution had a different view of the value of their two story brick home. The Mahaffee's received a letter from AmTrust Bank telling them that their property on Case Street has experienced "significant declines in property values". Amtrust told the couple, "we have elected to suspend further advances or draws on your Home Equity Line of Credit", effective immediately.

***

• The Mahaffee's are from alone. In recent months, several other major banks across the country have shut off home equity loans to tens of thousands of people. [...] AmTrust Bank is joining a growing list of national banks that are critically reviewing all current HELOC's. There is a growing fear by many lenders that HELOC delinquencies could rise in 2008. Countrywide Bank has already suspended an estimated 122,000 lines, many in high-foreclosure-rate states. Bank of America, USAA, Citibank, and Chase are reportedly going to follow suit.

***

• Financial planners suggest that if your HELOC is in jeopardy and you need the credit to complete a home renovation project, you might consider pulling out a lump sum. Many experts suggest that you should only borrow as much as you need right now and put the remaining cash in a high-yield savings account or CD until the repair or renovation bills are due.

For more, see AmTrust Bank freezing Home Equity Lines of Credit for certain customers (read story) (watch video).

In a related story, see Bloomberg News: Countrywide Takes Away Home-Equity Credit Lines in Las Vegas.

Go here for other posts on Frozen HELOCs.

SW Florida Cops Cop $3.6M In Contraband In Statewide "Operation D-Day" Grow House Busts

In Southwest Florida, WBBH-TV Channel 2 reports:

• Forty seven counties, including Lee and Collier counties, participated in "Operation D-Day," a statewide initiative aimed at shutting down marijuana grow houses. The Lee County Sheriff’s Office did a sweep in Lehigh Acres and arrested ten people. Deputies checked 55 houses - 12 of those were grow houses. They seized 740 plants worth an estimated $3 million. The Collier County Sheriff’s Office shut down eight grow houses, all in Golden Gate Estates. They seized 200 plants worth an estimated $600,000 and arrested nine people.

For more, see $3.6 million in pot seized in Lee, Collier.

In a related story from the Florida Attorney General's office, see Attorney General Praises Passage of the Marijuana Grow House Eradication Act.

Go here and go here for other posts on Marijuana Grow Houses. pot grow ops beta

Florida Cops Bag 135 Suspects, $41M In Marijuana In Statewide Grow House Busts

Coordinated raids on suspected marijuana grow houses across Florida last week netted at least 135 arrests and seizure of high-potency pot plants worth an estimated $41 million on the street, law enforcement officials said Thursday. The raids took place Wednesday [...], from the Florida Keys to the Panhandle, and identified about 150 homes with indoor growing operations.

Brevard County: The Brevard County Sheriffs Office Special Investigations Unit dismantled a sophisticated indoor Marijuana grow operation after serving two search warrants. Sixty mature Marijuana plants were found to be growing and prepared for the cultivation harvest process. The Brevard County Sheriffs Office has dismantled 11 marijuana grow operations to date this year. See Deputies Dismantle Merritt Island Grow House.

Charlotte County: On April 30, narcotics detectives of the Charlotte County Sheriff's Office raided two marijuana grow houses in Prairie Creek Park, about 10 miles east of Punta Gorda this afternoon. These are the 9th and 10th grow houses raided so far this year in Charlotte County. A detective said there were 395 total plants seized in one home, and 123 potted plants in the other home, not counting numerous marijuana "clone" or starter plants which which were also found. See Two more marijuana grow houses discovered.

Indian River County: A statewide crackdown on marijuana grow houses found one in Indian River County this week, county sheriff's officials said Thursday. Last Wednesday, investigators allegedly found 91 marijuana plants, plus growing equipment, said one detective. During the statewide law enforcement operation that culminated Wednesday, officers found 9,249 marijuana plants in 150 homes and 135 people were arrested throughout Florida. See Grow house found in crackdown in Vero Beach.

South Florida: For the three populous South Florida counties, Miami-Dade had 50 grow houses, 49 arrests and more than 2,200 plants; Broward had nine houses, 10 arrests and more than 300 plants; and Palm Beach had 18 houses, 15 arrests and almost 1,000 plants. See Police Raid Alleged Marijuana Grow Houses In Statewide Operation (135 Arrested; Pot Plants Worth $41 Million Seized).

Columbia County: Law enforcement authorities raided three Columbia homes used as marijuana “grow houses” Wednesday night in area of upscale subdivisions and seized more than $500,000 worth of marijuana plants. The Columbia County investigations also led authorities to a home in Union County where more than 100 plants where seized. See Officials seize ‘grow houses’ worth an estimated $500,000 (Local raids were part of organized, statewide sting).

Sarasota County: Three Sarasota County homes were raided as part of a coordinated statewide crackdown at locations suspected of being marijuana grow houses. Two of the homes were in North Port and one was in Sarasota. Cops copped at least 200 marijuana plants. See Grow houses raided.

Marion County: One day after drug agents cast a wide net across the state, snuffing marijuana grow houses and uprooting plants, Marion County authorities added a fourth arrest to their tally. All together in Marion, agents found 507 plants at four separate grow houses. See Sweep halks up new drug charges.

Volusia County: Two smaller-scale grow houses were broken up on Thursday, one in Deltona and the other in Osteen. 24 plants were seized; no one was arrested. See 135 arrested, $41 million in pot plants seized in grow house raids.

Hernando & Pinellas Counties: A statewide crackdown by authorities on marijuana grow houses led to three operations being busted Thursday in Pinellas and Hernando counties. One bust resulted in the discovery of 276 marijuana plants in one house, the Pinellas County Sheriff's Office said. In Brooksville, Hernando County sheriff's deputies found 123 marijuana plants and about 8 pounds of loose pot in one home and seized 352 plants, about 29 pound of loose marijuana and various equipment in another. See Statewide Bust Bags Pot Grow Houses.

Clay & St. Johns Counties: About 650 marijuana plants were seized in Clay and St. Johns counties as part of a drug task force raid this week to cut down on grow houses. In Clay, the Sheriff's Office said authorities found 228 plants in four homes prompting the arrest of five people. In St. Johns, authorities found 429 plants, about a pound of processed marijuana and 11 firearms in seven homes, the Sheriff's Office said. Two people were arrested -and several arrest warrants were pending. See LAW & DISORDER: Task force seizes 650 plants in 2-county pot crackdown.

Pasco County: Pasco County Sheriff's Office Vice and Narcotics Unit say they have made an arrest in a marijuana growing operation. Officers say they found 117 marijuana plants amd $2,000 in cash. See Marijuana grow house bust in Pasco County.

Go here and go here for other posts on Marijuana Grow Houses. pot grow ops beta

Unpaid Water Bills Leave Tenants Without Running Water, Facing Eviction

In Ocala, Florida, the Ocala Star Banner reports:

• Unless unpaid water bills are resolved, residents of two local rental communities will soon face dry faucets - and eviction. Both communities - an unnamed, 16-unit subdivision along Northwest 12th Street and Northwest 13th Street, and the Green Oak Apartments off South Pine Avenue - receive water service through a master meter. This setup creates one bill and one account holder for the entire community. The account holders at both communities have neglected to pay their bills, leaving tenants in a precarious situation.

• This is a familiar conundrum for the city. The same scenario unfolded at Busbee Quarters six months ago when residents of the northwest Ocala rental community - mostly low-income and Section 8 assistance recipients - were forced to leave their homes after landlords could not work out issues with delinquent water bills. Now, most of these units sit vacant, many of their owners tangled in foreclosure.

***

• If these outstanding bills are not paid before their deadlines, the remaining residents at both communities will be required to relocate because living facilities without running water create sanitation concerns, [Ocala director of water and sewer Henry] Hicks said. Once the water is shut off in cases like these, it is not turned back on until the units are individually metered, he said.

For more, see City rental units at risk of losing water.

For other posts involving the problems tenants face in homes in foreclosure, go here, go here, go here, go here, go here, go here, and go here. SkimmingKappaRent

Central Florida Tax Delinquencies Double Over Last Two Years

In Orlando, Florida, WFTV Channel 9 reports:

• As Central Floridians still struggle to pay what many call out-of-control property taxes, Channel 9 has learned the number of tax delinquencies has more than doubled in the last two years. Orange County Deputy Tax Collector Sarah Whittington says more than 40,000 property owners have not paid up this year. The top 10 alone account for $3.8 million in revenue.

***

• In the end, local counties will get their money because state law allows someone else to pay unpaid taxes then charge the property owner's interest. The catch is the person who pays the back taxes can force a foreclosure just two years after purchasing what's called a tax certificate on a home, or in the case of the top 10, the high dollar properties like an unfinished International Drive resort.

• Whittington said, “They know the taxes will be paid and they know that they're safe for two years before anyone will do anything about the property or force a tax deed sale.” That could be the real reason behind the top 10 list. For big companies, not paying taxes really equates to a low interest, five-percent loan for those millions of dollars.

For the story, see Tax Delinquents Not Paying Millions To County.

Go here for the Orange County, Florida Tax Collector's top 10 list of tax stiffs.

Go here for other municipalities dealing with delinquent real estate taxes. delinquent tax problem

Brooklyn Courts "A Snakepit Filled With Bribery & Back-Room Political Deals"?

In New York City, the New York Law Journal reports (at Law.com):

• A Brooklyn judge has filed an unusual $10 million defamation suit against attorney Ravi Batra and the New York Daily News. [...] On Jan. 28, 2007, [Daily News columnist Errol] Louis wrote that the "complicated world of judicial corruption in Brooklyn -- a snakepit filled with bribery and back-room political deals" -- was on the verge of being "blown wide open."

For more, see N.Y. Judge Files $10 Million Defamation Suit Against Attorney, Newspaper.

For earlier posts involving the Brooklyn judiciary & court system, see:

• Ex-Brooklyn Judge Under Indictment For Stealing $160+K From Elderly Aunt Cops Misdemeanor Plea,
• Retired NY Judge Reportedly Left Homeless & Broke By Guardianship Process. knuckleheaded judges zeta

New Use For Vacant Foreclosed Homes: Stash Houses For Guns, Drugs?

In Cleveland, Ohio, The Cleveland Plain Dealer reports:

• As workers board up abandoned properties across the county, police, neighborhood activists and advocates for the homeless are seeing another ugly trend emerge in the foreclosure crisis: Gang members and criminals are using the homes as stash houses for their weapons and drugs. For gang members and street criminals, pitching a weapon or drugs in boarded-up houses is an easy way to avoid being caught with them. For the neighborhood, it's a hazard. The danger comes when neighborhood children use the houses as playgrounds or squatters make dangerous discoveries. [...] Authorities said it's impossible to get definitive numbers on how common the problem is, but they say the mere fact it's happening is worrisome. And it's not just in Cleveland.

• In February, Pittsburgh police told reporters they seized 30 guns and ammunition from abandoned homes in one gang- ridden neighborhood. In March, police in Trenton, N.J., recovered weapons during a search of boarded-up houses. [...] Other communities in Ohio see the same thing. In Summit County, drug detectives have found methamphetamine labs and stashes of cash. "These homes are a breeding ground for crime," said Lorain Police Chief Cel Rivera. In recent years, the department has investigated slayings and a rape at abandoned homes.

For more, see Criminals stash guns, drugs in foreclosed homes.

Collier County Cops Create Community Safety Teams To Control Crime Linked To Abandoned Homes

In Collier County, Florida, WBBH-TV Channel 2 reports:

• As the number of foreclosures increases, so does Collier County's crime rate. The sheriff's office says empty homes are attracting criminals. But they have a new campaign to fight crime and want to make sure people know how to keep their own neighborhoods safe.

• The abandoned houses you'll find scattered all over Collier County are more than just eyesores - deputies call them targets for criminals. "It has the potential to spiral out of control downward. We are not going to let that happen," said Collier County Undersheriff Kevin Rambosk. In both 2005 and 2006, banks foreclosed on fewer than 800 homes. It grew to more than 3,000 in 2007. And so far this year through March, there have been nearly 2,000 foreclosures.

***

• Deputies are now kicking off a new plan to stop the growing problem. The sheriff's office is creating community safety teams. Each team will be made up of deputies, representatives from homeowners associations, and neighbors.

For more, see Community safety teams expected to reduce crime.

See also, Collier Sheriff’s Office working with residents to clean up abandoned homes.

Foreclosed Sacramento Home Goes Up In Smoke; Insurance Fraud Suspected

In California, KOVR-TV Channel 13 reports:

• A Sacramento home went up in flames overnight and arson investigators think this may be an example of insurance fraud. The house caught fire around midnight and by the time fire crews were able to douse the flames, the home was nothing but a charred shell. Firefighters say the house was in foreclosure and the previous residents had been evicted recently. Investigators haven't proved this fire was set by the homeowners but they say they have seen a spike in arsons as the economy has taken a dive.

Source: Foreclosed Home May Have Been Burned For Insurance.

See also, News10.net: Investigators Call Fire at Foreclosed House Suspicious (read story) (watch video).

For other stories on fires & foreclosures, go here, go here, go here, and go here. foreclosure arson whale

Dry Weeds, Brush Around Abandoned Homes, Unseasonably Warm Weather Pose Fire Threat

In Fresno, California, KFSN-TV Channel 30 reports:

• The foreclosure crisis is having a much more dangerous effect in some of our rural areas and the foothills. The unseasonably warm weather has dried out weeds. It's one thing for neighbors to deal with unsightly yards which haven't been landscaped. Some abandoned rural homes are much more dangerous because they're surrounded by dry weeds and brush. [...] The flood of foreclosures has left many homes abandoned. Some are more than just eyesores. They also pose fire hazards.

For more, see Foreclosure Crisis Adds to Fire Season Dangers in Rural Areas.

For other stories on fires & foreclosures, go here, go here, go here, and go here. foreclosure arson whale

Massachusetts Fire Marshal Expresses Concern On Increase In Abandoned Buildings Going Up In Smoke

In New Bedford, Massachusetts, The Standard Times reports:

• Two vacant tenements in the North End were torched Sunday night, fire officials said, underscoring a growing concern among public safety officials that the rising number of abandoned, foreclosed homes are sitting targets for vandals or desperate homeowners looking to recoup their losses. The fires [...] occurred weeks after another apparent arson at [...] an abandoned apartment building the city had boarded up. That fire started inside the first floor, and there is evidence it was set by squatters, fire officials said.

• Similar blazes of uninhabited, foreclosed tenements have been reported elsewhere, including Boston and Brockton, and mirror the trend from the early 1990s, during the last major recession, when arson increased as the rate of abandoned buildings skyrocketed across Massachusetts.

• "The current foreclosure crisis has not existed long enough for us to have a good statistical basis, but it is my observation from the number of fires we're responding to at vacant buildings that there is clearly an increase in the number of fires in those types of structures," said State Fire Marshal Stephen D. Coan.

For more, see Arson in two vacant residential buildings highlights public safety risks of foreclosure crisis.

For story update, see Firefighters back on the scene of North Front Street fire.

For other stories on fires & foreclosures, go here, go here, go here, and go here. foreclosure arson whale

Process Server Charged With Filing False Affidavits Attesting To The Service Of Legal Papers On Defendants In Lawsuits

From the office of the New York Attorney General:

• Attorney General Andrew M. Cuomo [this week] announced the arrest of an Erie County woman who allegedly filed false affidavits of service of legal papers with the Cattaraugus County Clerk, causing default judgments to be entered against unsuspecting individuals. The Attorney General’s Office alleges she claimed to serve papers on individuals when she had not, leaving those individuals with no notice of pending court actions against them. This led to default judgments that could include wage garnishment, the seizure of bank accounts and other assets or negative impact on credit ratings. “These victims had no idea that a court action had been brought against them, and because of that, were unable to defend themselves,” said Attorney General Cuomo.

***

• Annette Forte, 34, of Broadway in Alden was charged today in Little Valley Town Court in Cattaraugus County with two counts of Offering a False Instrument for Filing in the First Degree (class E felony) and one count of Scheme to Defraud in the Second Degree (a class A misdemeanor). The maximum sentence for Offering a False Instrument for Filing in the First Degree is 4 years in prison.

For more, see Erie County Process Server Accused Of Defrauding Court System Through False Affidavits (False filings of court documents led to punishment of innocent individuals).

Go here for other posts on alleged fraud in the serving of court papers.

Go here for other posts on process server screw ups. ScrewUpProcessServing SewerServiceAlpha

Florida Passes Laws Regulating Foreclosure Rescue; Awaits Governor's Signature

In Florida, The Miami Herald reports:

• [I]n an effort to protect the growing number of homeowners [in foreclosure], the state Senate approved a foreclosure fraud bill Thursday, reining in the growing field of consultants and equity purchasers offering home-saver services to delinquent borrowers. Some have been accused of duping homeowners into signing over their property and then selling for profit or charging them stiff fees to get it back -- a scheme sometimes called equity stripping.

For more, see Foreclosure fraud bill OK'd (State lawmakers passed a bill to protect delinquent borrowers from losing their homes and money to fraudulent foreclosure rescue services) (if link expires, try here or try here).

See also the Florida Attorney General's press release on the Foreclosure Rescue Fraud Prevention Act of 2008: Attorney General McCollum Commends Legislature for Passage of Mortgage Fraud Legislation.

Go here for the new Florida foreclosure rescue fraud law (CS/HB 643E1): (bill history) (bill text). Upon Florida Governor Charlie Crist's signing the bill into law, the new law will be found in Section 501.1377, Florida Statutes and will take effect on October 1, 2008.

Cleveland Feds Indict Ex-Cops In "Cash Back" Mortgage Scam

In Cuyahoga County, Ohio, The Cleveland Plain Dealer reports:

• Two former Lakewood police officers have been indicted on federal mortgage-fraud-related charges stemming from the purchase of 13 rental properties. Richard Alvarez, 38, of Medina, and Marcus Adkins, 32, of Lorain, are charged with conspiracy to commit wire fraud and wire fraud. Both resigned from the Lakewood Police Department last year for personal reasons. According to federal prosecutors, Alvarez and Adkins were partners in an enterprise that bought 13 properties - 11 in Cleveland, one in Garfield Heights and one in Toledo - in 2005 and 2006. All 12 properties in Cuyahoga County have since gone into foreclosure. The indictment alleges that they bought the properties at market value but inflated the purchase price on mortgage applications, claiming the money was for repairs. Title companies would then distribute money to the two men or to their company, Copper Properties Inc., the indictment said. The two men also are accused of misrepresenting the source of down payments, claiming there were false second mortgages made on the properties, and creating false leases and rental agreements.

For the story, see Ex-officers accused of mortgage-related fraud.

From the Cleveland-Area U.S. Attorney's office:

• Indictment - U.S. v. Alvarez, et al.
• Press Release.

Mortgage Bankers Begin Bellyaching Over Appraisal Code Of Conduct Agreed To By Fannie, Freddie In Settlement With NY AG

DS News.com reports:

• An agreement to establish a standard Code for home appraisals, which was recently proposed by the Office of Federal Housing Enterprise Oversight (OFHEO), the New York Attorney General's Office and Freddie Mac and Fannie Mae, is now drawing criticism from the Mortgage Bankers Association (MBA). The MBA sent a letter to OFHEO's director and to the leaders of Fannie Mae and Freddie Mac this week, saying the proposed Home Valuation Code of Conduct “must be modified to reflect MBA's concerns for safety and soundness, as well as operational and procedural complications.” The MBA urged OFHEO to reconsider provisions laid out in the proposed code and consider some of the procedural risks that could be created if the code is implemented “as is.”

For more, see MBA Not Happy with OFHEO's Proposed Appraisal Code.

Go here for other posts on the now-terminated investigation by New York Attorney General Andrew Cuomo of Fannie Mae and Freddie Mac that resulted in Fannie & Freddie agreeing to adopt the NY AG's appraisal code of conduct (effective 1/1/2009; agreed to as part of a settlement agreement between the NY AG and Fannie/Freddie to avoid a possible lawsuit and to end the NY AG investigation).

NY AG Out To "Hammer" Another Home Improvement Contractor

From the New York Attorney General's office:

• Attorney General Andrew M. Cuomo [last week] announced his office has filed suit against a negligent Delaware County home improvement contractor that repeatedly ripped off customers, performed shoddy work and didn’t complete projects outlined in contracts.
  Attorney General Cuomo’s lawsuit seeks to make Jeffrey McGowan of Delhi pay full restitution to consumers he defrauded, post a $100,000 performance bond before he continues any home improvement contract business, and pay additional costs and penalties. [...] McGowan operated his businesses, M & M Quality Contracting and Old Homes Friend, at an office on County Highway 16 in Delhi.

The Attorney General’s Office also found that McGowan failed to:

• place advanced payments into trust accounts as required by law,
• inform consumers of their legal right to cancel a signed contract within 3 business days, and
• include the estimated dates when work would begin and be completed in his contracts.

For the NY AG's press release, see Attorney General Cuomo Protects Southern Tier Homeowners From Negligent Home Improvement Contractor (Delaware County man repeatedly ripped off homeowners and performed shoddy work).

For other posts on homeowners left in the lurch due to actions by builders/contractors, go here, go here, and go here.

Go here for other posts on other home improvement contractors hammered by the NY AG. Cuomo hammers contractors contractors stiff subs customers yelbow

NYC Feds Indict Four On Mortgage & Insurance Fraud

In New York City, the North Country Gazette reports:

• Four individuals have been indicted in Manhattan federal court on charges of participating in an associated insurance fraud scheme. Dominick Devito, Robert Didonato, John Liscio and Louis Cordasco Jr. were each charged with insurance fraud and in addition Devito and Didonato where charged in a wide-ranging scheme to commit mortgage fraud. Devito is also charged with obstruction of justice.

• Prosecutors say that from January 2002 through November 2004, Devito was the leader of a fraudulent real estate investment scheme, which had as its primary objective the purchase of multimillion-dollar residential properties in various communities in Westchester County, including Purchase, with loans obtained through the submission of false and misleading information to banks and other lenders.

***

• In addition, from January 2003 through February 2005, the four allegedly engaged in a scheme to defraud insurance companies by submitting false and misleading insurance claims and supporting documents for water damage caused by broken pipes at several of the homes purchased as part of the mortgage fraud scheme. Liscio was a licensed insurance agent who sold insurance policies to the owners of the homes purchased in the scheme and helped Devito submit insurance claims for water damage.

For more, see Four Charged In Insurance, Mortgage Fraud.

Missouri Senator Prods State AG To Target Firms Engaged In Deceptive Reverse Mortgage Marketing Practices

In Springfield, Missouri, KYTV Channel 3 reports:

• U.S. Sen. Claire McCaskill wants more protection for senior citizens who are targeted by unscrupulous mortgage lenders. Specifically, she's concerned about lenders selling reverse mortgages. McCaskill is frustrated with companies sending misleading marketing materials that aim to rope elderly people into an expensive loan that can leave them penniless. [...] McCaskill [...] wants Missouri Attorney General Jay Nixon to do something about it. "He has authority to go after fraudulent marketing and we want him to make sure the whole story is being told and we are protecting the elderly people of our state,” said McCaskill. Specifically, she's targeting companies that market reverse mortgages as a government benefit, much like Social Security or Medicaid.

For more, see McCaskill urges Nixon to go after scam reverse mortgage marketers.

For a recent story on the New York Attorney General's office going after a firm engaged in deceptive reverse morgage marketing practices, see Attorney General Cuomo Protects Senior Homeowners From Misleading Reverse Mortgage Solicitations (Reverse mortgage company portrayed itself as community-based non-profit to mislead seniors into reverse mortgage product).

For stories related to Reverse Mortgage Problems, go here, and go here. reverse mortgage yak

Flood Of Foreclosure, Debt Related Lawsuits Put Strain On New Jersey Court System

In New Jersey, The Star Ledger reports:

• The economic struggles of New Jersey residents are putting a strain on the state's understaffed courts as foreclosure and debt-related cases surge, the court system's director told state lawmakers [this week]. Foreclosure filings for the first three months of the year exceeded 4,000 a month, a staggering 44 percent increase over the same period last year, Judge Philip S. Carchman told the Senate Budget and Appropriations Committee. They are on track to hit 49,000 cases by the end of the year, double the number from just two years ago. Debt cases, mainly from credit cards problems in which $15,000 or less is owed, are also spilling into the courts. Carchman said 621,000 are expected this year, 100,000 more than last year.

***

• Carchman said judges know by experience that family financial problems will also lead to an increase in the Family Court caseload. "Financial struggles tear families apart, possibly resulting in divorce, domestic violence, abuse or neglect of children or missed support payments," he said. "We may see the effects of increased financial strain in the criminal courts as well," he added.

• Carchman said the court system will be hard-pressed to manage and resolve the growing caseload "while at the same time reducing staff by 300 to meet our budget reduction of $27 million."

For more, see Courts are hard-pressed to deal with hard times.

For similar stories in Minnesota & Florida, see:

• [Minnesota] State's court system shows budget strain (More cuts aren't the solution in economic downturn),
• [Florida] Courts foresee staff reductions (30 percent of the workforce is at risk).

Go here for posts on other court systems being squeezed by foreclosures & budget cuts. state budget cuts courts