Ex-Bucks County Prosecutor Cops Plea To Swiping Mortgage Payments

In Delaware County, Pennsylvania, the Philadelphia Inquirer reports:

• A former Bucks County prosecutor who went to jail 10 years ago for embezzling real-estate settlement funds, admitted in court today that he used his job as a mortgage broker to steal from clients again. Joseph James Scafidi, 53, of Warminster, pleaded guilty in Delaware County Court to felony counts of theft and forgery for stealing mortgage payments, writing bad checks, and fabricating a phony order from a county judge. Scafidi, who worked as a public defender and a deputy district attorney in Bucks County before he was disbarred in 1996, faces up to seven years in prison and a $15,000 fine for each of six charges.

***

• Scafidi worked as an attorney for 16 years. In 1996, he was accused of embezzling $264,000 in real estate settlement fees from a Fort Washington title company and was disbarred.

***

• [In one case,] Scafidi persuaded [a] couple to refinance two homes [...] then pocketed subsequent mortgage payments totaling $15,000. When default notices went out, Scafidi forged a court order that included assurances that no action on the houses was imminent. He faced similar charges in Montgomery and Bucks Counties, which were consolidated with the Delaware County charges.

For the story, see Ex-prosecutor admits to theft and forgery.

For story update, see Jail time for mortgage scammer with long record (7-7-08).

Go here for other posts on Joseph James Scafidi.

Another Dead Homeowner The Target In Alleged Long Island Deed Theft

In Nassau County, New York, Newsday reports:

• A West Hempstead woman accused of stealing a house from a dead person was ordered held on $100,000 bond or $50,000 cash bail Friday after her arraignment on grand larceny charges, police said. A Roosevelt man also was charged in connection with the incident, but his court status was not immediately available.

• Barbara Hoist, 49, of 521 Champlain Ave., forged the deed to a single-family home on Underhill Avenue in Roosevelt and transferred ownership from the deceased owner to herself, Nassau police said. Hoist forged the deed to the Roosevelt house the day after Christmas in 2006 and then a few weeks later sold that house for $65,000 to the Roosevelt man, police said.

• That buyer, Ernest Pope, 48, of Roosevelt, resold the house in May 2007 for $190,000, police said. Pope, of 45 Jefferson Ave., was scheduled for arraignment Friday on a charge of grand larceny. Both face additional charges of falsifying business records, forgery and identity theft.

For more, see Two charged after sales of dead owner's house.

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

Alleged Mortgage Fraud Conspiracy Leaves 1st Time New Haven Homebuyers "Knee-Deep In Sewage — And Debt"; Law Students Take Case In Suit For Fraud

In Connecticut, The New Haven Independent reports:

• When they knocked on the door of L & S Mortgage, Delroy Reid and Debra Willoughby just wanted to buy a home. After getting lured into buying a broken-down house through an alleged mortgage fraud scam, they found themselves knee-deep in sewage — and debt. The unwitting first-time homebuyers have gone to court to try to recover.

***

• Reid and Willoughby claim they were lured into a conspiracy between a mortgage company that falsified their loan applications, sellers with family ties to that company, and an attorney who didn’t look out for best interests. The company that brokered the deal, L & S Mortgage, LLC, surrendered its mortgage broker license as of March after the state threatened to shut the company down for charges including taking false loan applications.

***

• With the help of the Jerome N. Frank Legal Services Organization at the Yale Law School, Reid filed suit in New Haven Superior Court against six alleged co-conspirators in the scam: L&S mortgage; CA-based lenders Fremont Investment; two sellers; an attorney who oversaw the sale; and Dolan & Luzzi, a New Haven law firm that has a $20,000 contract with the City of New Haven to do foreclosure work.

For more, see Struggling Couple Sues Over “Scam”.

To view lawsuit, see Reid v. L & S Mortgage, LLC, et al., a 26-count complaint alleging, among other things, fraud, negligence unconscionability, theft, breach of duty of good faith and fair dealing, malpractice as to attorney, mortgage broker and real estate appraiser; Connecticut Unfair Trade Practices Act violations (an MS Word .doc file).

Orphan Forced To The Brink Of Foreclosure On Inherited Home Fights Back As Child Protective Agency Pockets Juvenile's Monthly Death Benefit

In Guilford County, North Carolina, the Greensboro News Record describes the story of an:

• [u]nnamed orphan whose adoptive father died, leaving the child a small Habitat for Humanity house in east Greensboro — plus a $538 a month death benefit, more than enough to pay the $221 mortgage. Even so, [the orphan's] legal guardian — the DSS [Department of Social Services] — kept the full $538 to help defray his upkeep in foster care. That left the mortgage on the vacant home unpaid and on the brink of foreclosure.

Despite being hammered by the adverse rulings of a state trial judge, a state appeals court, and the North Carolina Supreme Court, the DSS has, according to the story, decided to continue its relentless pursuit of the kid's $538/month by filing a petition with the U.S. Supreme Court to have the case heard.

For more, see DSS makes a federal case of an orphan's house.

In an earlier media report on this story, see The New York Times: Welfare Agencies Seek Foster Children's Assets.

To view the decision of the North Carolina Court of Appeals, see In re J.M.G., No. COA06-752 (November 6, 2007) (go here for .pdf version).

Forged Deed To Deceased Grandfather's Home Creates Major Family Rift; Aunt Sues To Void Deed, Confirm Title To Rightful Heirs

In Chicago, Illinois, the Chicago Tribune reports on a story involving Raymond Washington, reportedly a convicted felon who is being sued for allegedly forging a deed to the home of his deceased grandparents, Wesley and Olivia Kimble, enabling him to take title, and then selling the home and pocketing the cash. The home subsequently went into foreclosure, leaving other relatives who lived in the home, facing eviction, including his disabled aunt, Barbara Ward. An excerpt from the story:

• Washington has had some trouble with the law. He has been arrested a dozen times, three of them for felony offenses.In late November 2003, Washington used a false name, Marcus Taylor, to purchase a new Mercedes-Benz, a vehicle retailing for $39,000, from Mercedes-Benz of Chicago. Washington was arrested on forgery charges on Jan. 22, 2004, just 11 days before he filed the documents transferring ownership of his grandfather's house to himself.

• Washington pleaded guilty to forgery in July 2004 and was sentenced to 30 months' probation. In a lawsuit filed in Cook County Chancery Court, Ward maintains that her nephew forged her father's name on the quitclaim deed. Even if it was her father's signature, Kimble was in no physical or mental condition to sign the deed, the suit says.

• Ward is asking Chancery Court Judge James Epstein to rule that the deed and the mortgage are "illegal and void and ordered to be canceled of record," court records show. She also is asking the court to confirm that the house is owned by the legal heirs of Wesley and Olivia Kimble.

For more, see A house divided, family seeks answers (Foreclosure on West Side two-flat touches off ownership battle and raises questions about sale's legality).

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

Elderly Connecticut Man Loses Rented Home Of 20 Years As Landlord's Mortgage Lender Forecloses

In Bridgeport, Connecticut, Hartford Business Journal reports:

• When a 70-year-old Bridgeport man returned to the third-floor apartment that had been his home for nearly two decades, the rental unit was locked and boarded up. His landlord had been foreclosed on. The blindsided renter was collateral damage.

• Attorney Richard Tenenbaum of Connecticut Legal Services declined to name his dispossessed client but said similar incidents are being played out nearly every day in Connecticut. “There are dozens, probably hundreds, of people being victimized because they don’t know what’s going on,” Tenenbaum said. “The number of evictions caused by foreclosures has probably doubled, at least, in the past few months.”

***

• After receiving a wave of phone calls from displaced families last summer, the NLIHC [National Low Income Housing Coalition] looked at foreclosure patterns throughout New England. In Massachusetts, 34 percent of foreclosures were on multi-unit properties. In Rhode Island, the rate was 41 percent. In more rural New Hampshire, multi-unit housing accounted for only 12 percent of foreclosures. “The majority of these foreclosures for multi-unit housing are for two-, three- and four-unit homes.” [NLIHC research director Danilo] Pelletiere said.

***

• But there are legal mechanisms that can protect [Connecticut] renters, including a six-month stay of execution on evictions if the tenant is not the cause of the notice, Tenenbaum said. But few tenants are aware that they have a legal right to contest being thrown out, he added.

For more, see Locked Out: Foreclosures Blindsiding Renters.

For the recent NLIHC study, see Properties, Units, and Tenure in the Foreclosure Crisis: An Initial Analysis of Properties at the End of the Foreclosure Process in New England.

For other posts involving the problems tenants face in homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

Utah Woman Losing Decade-Long Battle To Reclaim Ownership Of Home Lost In Forced Sale Over $68 Dentist Bill

In Salt Lake City, Utah, ABC News reports:

• Can you imagine losing your home over a $68 dental bill? That's what happened to one Utah woman. Sonya Capri Ramos says her Salt Lake City home was sold out from under her in 1996 to pay a collections agency seeking payment for dental work performed on one of Ramos's daughters. And despite the fact that she had made three years of payments on a $51,000 mortgage, the title changed hands for just $1,550 at a sheriff's auction. But the story doesn't end there: Ramos, 41, said she didn't find out that her home no longer belonged to her until two years after the sale. To date, she hasn't moved out. Instead, she said she continues to make mortgage payments on the home and is fighting what has become a decade-long legal battle to reclaim ownership.

For more, see Woman Loses Home Over $68 Dental Bill (Utah Woman 'Dumbfounded' After Learning Her Home Was Sold Without Her Knowledge).

Foreclosure Problems Increasingly Creep Into Suburbs

Whether east or west, foreclosure problems are increasingly creeping into the suburbs. For three examples, see:

• New York State Capital Region: Scotia street exemplifies how foreclosures are hitting suburban areas, as mortgage crisis mounts (Daily Gazette),

• Maricopa, Arizona: Foreclosure crisis hitting town of Maricopa especially hard (KNXV-TV Channel 15),

• Manatee County, Florida: Neighbors also hurt by foreclosure (Bradenton Herald).

After 20+ Years, City Of Newbury Decides To Pursue Real Estate Tax Scofflaws

In Massachusetts, The Boston Globe reports:

• In Newbury, a town of roughly 7,000, about 150 are considered delinquent taxpayers. A few haven't dished out a cent in property taxes since the 1980s. Others owe close to $50,000. But the free ride for some property owners is over, according to Charles Kostro, Newbury's finance director/treasurer.

• Since last March, the town has pursued some $660,000 in back property taxes. Most recently, officials ratcheted up the process by hiring Boston-based D'Ambrosio Law Offices to put the top 10 tax delinquents into tax title, which, if taxes are still outstanding after six months, allows the town to foreclose on their properties.

***

• Things have already improved. The town has collected roughly 40 percent of the $660,000 in back taxes dating from the mid 1980s to June 2006.

For more, see Newbury hopes to collect $660,000 from tax delinquents (Effort is first time town has gone after debtors in 15 years).

Minneapolis Tenants In Dilapidated Foreclosed Building Get The Boot As City Says Place Is Uninhabitable; Belongings Out On The Street, Kids Homeless

In Minneapolis, Minnesota, KAAL-TV Channel 6 reports:

• Several Minneapolis families were without a place to live Thursday night after their apartment complex was boarded up after falling into foreclosure.

***

• While residents say they were given just a few moments warning, the city says the building was foreclosed on last summer and residents should have begun to look for a new place to live at that time. The building had no rental license, authorities said, and they set a May 1st eviction date.

• But the customary 72 hour grace period was extended to May 15th and then again until May 22nd - Thursday. The manager of the Problem Property Unit at the City of Minneapolis, Tom Deegan, told us the building had become "uninhabitable," with at least four units missing copper piping when authorities entered on Thursday.

For more, see Mpls. families evicted from foreclosed apartments.

See also, Minneapolis Star Tribune: North Side foreclosure upends lives (Black garbage bags stuffed with possessions covered the lawn of the north Minneapolis apartment building as its suddenly homeless residents milled around wondering where they would go next).

Lenders Becoming Reluctant To Intiate Foreclosure Actions?

In Central Florida, the Orlando Business Journal reports:

• Home foreclosure numbers continue to soar in Central Florida -- but some experts say the real, untold, figures are significantly higher. In a "normal" real estate market, homes typically are repossessed after the homeowner misses several payments.

• But now, anecdotal evidence shows that many lenders have yet to send foreclosure notices to scores of homeowners who've missed more than a year's worth of mortgage payments. The reason? Many lenders don't want the ever-growing number of foreclosed properties to become bank assets, says real estate consultant Jack McCabe.

• That's because homes aren't selling quickly these days, and banks and lenders would be stuck with these depreciating assets on their books, says Jeffrey Schimmel, an associate who does research on banks and real estate for Situs Cos. in Boca Raton.

For more, see Banks starting to postpone foreclosures (Experts: Lenders don't want more depreciating assets on their books).

Harris County Tax Collector Screws Up In Filing Delinquent Tax Foreclosure Suit Against Active Duty Servicemember; Law Firm Admits Error

In Houston, Texas, KHOU-TV Channel 11 reports on the story of U.S. Air Force Captain Jose Iraheta who, with his family, live in northwest Harris County. They own a home, but he doesn’t spend much time here as he spends most of his time overseas, flying planes high above places like Iraq and Afghanistan. He reportedly had a real estate tax issue that he recently had to deal with.

• [L]uckily for Capt. Iraheta, he knew about [...] a law in Texas that allows people on active military duty like him to defer paying their property taxes. They have until after they’re discharged or otherwise living back home. So Capt. Iraheta filled out the forms and postponed paying his taxes.

• But there was a problem, and the captain found out about it in a most troubling way. He said while he was off fighting a war, Harris County decided to sue him. “I got sued,” Capt. Iraheta said. The county sent him a citation, saying he owed $7,000 in back taxes plus $3,000 attorneys fees and penalties. To collect it, the county said it would sell his house in a foreclosure sale.

***

• Suing soldiers over property taxes is against Texas law, and so is trying to charge them extra fees. So how’d it happen? The mistake is traced to downtown Houston law firm Linebarger, Goggan Blair and Sampson. Harris County uses it to collect unpaid taxes, and the law firm now admits it was all a big mistake.

For more, see While serving his country, Air Force captain was sued by Harris County.

When Your Landlord's Stiffing The Bank, You Could Be The One In Trouble

Here are a number of links to stories from around the country on the apparent widespread prcatice of renting homes in foreclosure to unwitting tenants, and serve as a strong reminder that tenants need to be proactive in their investigation of the status of the property they are leasing:

Washington, D.C. - WTOP Radio 103.5 FM: Renters beware: Know your foreclosure rights,

Bakesrfield, California - KERO-TV Channel 23: Renters Step Into Foreclosed Home Danger (Local Family Loses Home, Deposit After Rented Home Foreclosed),

Orange County, California - The Orange County Register: House, condo renters latest victims of foreclosure crisis (People renting homes, condos and townhouses find themselves out on the street after the owners fail to pay the mortgage).

South Central Michigan - The Ann Arbor News:

• When your landlord's in trouble, you could be too,
• Vulnerable renters need stronger rights (Mortgage meltdown affects them, too),
• What renters should know about foreclosure,

Southwest Florida - The News Press:

• Lousy landlord hurts families,
• Owner defaults; tenants evicted,

Northern/Central Florida - Hernando Today: Renters Suffering From Foreclosure Crisis.

Kingman, Arizona - Kingman Daily Miner: Mortgage crisis hits renters (Landlords with adjustable-rate loans see payments skyrocket).

For other posts involving the problems tenants face in homes in foreclosure, go here, go here, go here, go here, go here, and go here. equity skimming unwittingly digamma

Rockland County Fire In Vacant Home In Foreclosure Under Investigation

In Haverstraw, New York, The Journal News reports:

• Investigators were looking into what caused a fire at a vacant Warren Avenue house yesterday morning. The house had recently been the subject of a foreclosure action, officials said. The 1:25 a.m. blaze at 2 Warren Ave. was quickly put out by Haverstraw and West Haverstraw firefighters. No one was injured during the emergency, police said. A neighbor reported the fire and told police that people were staying inside the vacant building, Lt. Martin Lund said.

For more, see Vacant house fire under investigation in Haverstraw.

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

South Carolina Woman Guilty In Failed "Torch Home In Foreclosure" Insurance Scam

In Chester County, South Carolina, The Rock Hill Herald reports:

• A 60-year-old Rock Hill woman has been sentenced to five years probation after a Chester County jury Wednesday found her guilty of arson and presenting false claims for payment after a house fire in 2004, according to a spokesman for the S.C. Attorney General’s office. Brenda J. Gallman, 60, of 122 N. Confederate Ave., was found guilty of setting fire to her home that was going into foreclosure in Chester County in May 2004, then filing a claim on her homeowner’s insurance policy the following day, according to a written release from Mark Plowden, spokesman for the Attorney General’s office that prosecuted Gallman.

Source: Rock Hill Woman Found Guilty in Chester County Arson Case.

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

Tampa Woman Charged With Torching Home In Foreclosure

In Florida, The Tampa Tribune reports:

• Investigators say Mia Gayshonne Dix was in trouble. The 37-year-old had been fired from her job. Her car had been repossessed. Her home was in foreclosure. So when the house at 3807 N. Highland Ave. caught fire in December, suspicion arose. Dix, who filed an insurance claim on the home in February, was arrested Monday on arson and fraud charges after an investigation on behalf of the insurance company, according to her arrest report.

Source: Tampa Woman Charged With Arson Involving Home In Foreclosure.

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

Foreclosure Eviction Results In Discovery Of Mini Marijuana Grow House

In Chicago, Illinois, WBBM Radio 780 reports:

• Officers on the scene to evict a Chicago man ended up arresting him after finding a room “filled with growing marijuana plants.” Cook County Sheriff’s police arrived at 4548 S. Prairie Ave. to evict 35-year-old Arkey Washington for mortgage foreclosure, according to the Cook County Sheriff’s department. [...] Aside from finding an unloaded handgun on the floor and “two large containers of marijuana” which appeared to be packaged for street sale, officers found a bedroom containing a “sophisticated marijuana growing operation,” the release said. [...] The Sheriff’s police seized all of the drugs and the gun, and estimate the street value of the marijuana to be about $60,000.

For the story, see Eviction Attempt Finds a Garden of Marijuana.

Go here and go here for other posts on Marijuana Grow Houses.

Go here for other posts on Police involvement in foreclosures. SheriffDeputiesForeclosureAlpha pot grow ops beta

Abandoned "Triple Decker" Goes Up In Smoke; Latest In Rash Of New Bedford Vacant, Foreclosed House Fires

In New Bedford, Massachusetts, The Standard Times recently reported:

• Fire, police and EMS personnel responded to a fire at 20 Roosevelt St. in the city's South End just after midnight, working to extinguish a fire on the second floor of a triple-decker.

• A call came in at 12:03 a.m. reporting the fire. Four engines and two ladder trucks responded. The blaze, according to fire officials, was extinguished within an hour and a half, and the last piece of equipment left Roosevelt Street at 1:45 a.m. A police officer at the scene indicated that the home was abandoned. The city has seen a rash of fires in abandoned and foreclosed structures over a span of several weeks.

Source: Fire in South End damages apparent abandoned triple-decker.

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

Tucson Pet Pastor Gets Boot As Animal Cemetary Lost In Foreclosure

In Tucson, Arizona, the Arizona Daily Star reports:

• The longtime operator of Tucson's pet cemetery was evicted from the North Side property Tuesday. Darla Norrish said disagreements with her investors led to the foreclosure of The Pet Cemetery of Tucson, 5720 E. Glenn St. The investors, Slivy Edmonds Cotton and Patricia Taylor, bought the 4-acre property Tuesday at a foreclosure sale through their business, Portico LLM Enterprises. Norrish no longer is involved with the cemetery, but said "my ministry for the animals will continue, perhaps just in a different venue."

For more, see Pet pastor evicted by new owners of Tucson's only pet cemetery.

Southwest Florida Cops Call For Help On Local Foreclosure Problem

In Southwest Florida, The News Press reports:

• Collier County sheriff's officials say they need the help of the community - civic associations, property owners and banks - to clean up foreclosed, abandoned homes that are potential blights on neighborhoods and magnets for crime. Authorities face a similar situation in Lehigh Acres, where more than 220 houses under construction are abandoned and 623 foreclosures were filed in April. Juveniles and adults squat in the buildings, vandalize and steal construction materials, Lee County sheriff's Capt. Ed Tamayo said.

***

• The result, if something isn't done, is the collapse of entire neighborhoods, he said. That's because abandoned homes, [Collier Undersheriff Kevin] Rambosk said, spawn crime, including vandalism, burglaries, thefts and indoor marijuana growing operations.

For more, see Foreclosed properties worry sheriffs' offices. neighborhood destruction from foreclosures zach

Michigan Governor Signs Law Offering Protection For Servicemembers Under Threat Of Foreclosure

In Michigan, WEYI-TV Channel 25 reports:

• Governor Jennifer M. Granholm [Wednesday] signed a bill that protects military service members from the threat of mortgage foreclosure. The bill prevents foreclosure on future home purchases for six months after the end of an owner’s military service. [...] Public Act 138 amends the Revised Judicature Act by allowing a court to issue a stay on mortgage foreclosure proceedings for six months after the end of the individual’s military service. Under the new law, mortgage servicers who attempt to sell or foreclose real estate that has received a stay from the court could be subject to a $2,000 civil fine.

***

• This new law is just the latest action in the Granholm administration’s efforts to help protect military members when they return home to Michigan from service. Last month, the Governor signed a bill that guarantees citizens who serve on active duty in the armed forces or National Guard the opportunity to get their jobs back upon their return from duty. The legislation allows qualified military personnel to file civil actions against employers if they are denied reemployment.

For more, see Mortgage foreclosure protection.

Go here for posts on the Federal statute offering similar protection under the Servicemembers Civil Relief Act.

Cincinnati Woman Sues Lawyer For Leaving Her Holding The Bag On Real Estate Investment; Prosecutors Investigate

In Ohio, the Dayton Daily News reports:

• The Warren County prosecutor's and the Ohio attorney general's offices are investigating claims by a woman who says a lawyer duped her into buying houses worth almost $5 million that she has never lived in and cannot afford. Authorities are reviewing Francisca Webster's purchase of two houses built for Homearama shows in the Long Cove subdivision in Deerfield Twp. and another in the River's Bend subdivision in South Lebanon. Webster, a Cincinnati resident, is suing lawyer Eric Duke in Hamilton County Common Pleas Court because he misled her about the house purchases, her attorney Ron Parry said.

• "When she took her tax papers to Duke in 2006, she told him she had gotten some bad news, that her job was going to be phased out," Parry said. "He told her he knew of a way she could make some money, that he had a real estate hedge fund and if she would help him out, and buy some properties, that there would be some money in it for her to pay her bills."

For more, see Lawyer tricked me into buying 3 houses worth $5 million, woman says.

Austin Man Leaves Longtime Friend/Straw Buyer & Tenant Holding The Bag In Dubious Deal

In Austin, Texas, KXAN-TV reports:

• In 2006, Reggie Allen bought a home at 2000 Short Summer Drive for $178,400, partly because he thought it would be a good investment and partly to help a friend. [...] Allen claims his longtime friend convinced him to use his good credit in March 2006 to purchase the Northeast Austin home. His friend's wife, Lynn Harper-Armstrong, would be responsible for leasing the property, collecting rent, and paying the mortgage. In return, Allen and a co-buyer, Penny Coles, would split $3,000 at closing.

***

• Coles purchased a total of three homes under a written agreement with Harper-Armstrong. [...] The agreement stated Harper would be responsible for keeping the mortgage account current at all times. But 17 months after closing on 2000 Short Summer Drive, the mortgage company informed both Coles and Allen received notices that no payments had been made.

For more, see Home deal leaves investors facing foreclosure (no longer available online).

Philly Foreclosures Of Owner Occupied Homes Postponed Again Until At Least September

In Philadelphia, Pennsylvania, The Court of Common Pleas for Philadelphia County has ordered (May 15, 2008) that the sheriff's sale of all owner occupied homes (as opposed to non- owner occupied homes) in foreclosure originally scheduled to be sold in June and July have been postponed until the Sheriff Sales scheduled for September and October, respectively, in order that the Conciliation Conference required pursuant to President Judge General Court Regulation No. 2008-01 can be held. The cancellations are made as part of the recently passed Residential Mortgage Foreclosure Diversion Pilot Program.

In the event foreclosing mortgage lenders certify that a home in foreclosure is not owner occupied (which would thereby allow a scheduled home foreclosure sale to continue) when in fact the home is owner occupied, a certification/objection procedure is provided and contained in Exhibit C of the court order for owner-occupying homeowners to use to file with the court their objections to their mortgage lenders' certifications.

Homeowner objections are to be filed on or before May 29, 2008 for the properties listed for sale on June 3, 2008 and on or before June 23, 2008 for the properties listed for sale July 1, 2008.

Go here to read the entire May 15, 2008 court order for more information.

Go here for other posts on the Philadelphia foreclosure diversion program.

Thanks to attorney Donald Marritz of Regional Housing Legal Services in Pennsylvania for the heads up on the most recent court order. diversion program

Legal Aid Groups To Testify Today At Senate Hearing

In Washington, D.C., The BLT: The Blog Of Legal Times reports:

• Faced with increased demands for legal assistance from low-income Americans, several representatives of legal aid groups will appear before a congressional panel later today to help make the case for additional funding. The Senate Judiciary Committee’s “Closing the Justice Gap: Providing Civil Legal Assistance to Low-Income Americans” will consists of two sessions.

For more, see Legal Aid Experts to Testify Today in Congress.

Go here for links to the testimony of each witness.

Go here for webcast of hearing.

Congressional Hearings Begin On Blameless Victims Of Foreclosure Crisis

In Washington, D.C., The Wall Street Journal Blog reports:

• Rep. Dennis Kucinich began the first of two days of hearings to call attention to the “largely unrecognized … and totally blameless victim — neighborhoods.” The Ohio Democrat and former Cleveland mayor heard made the case that concerns about creating a moral hazard — or rewarding risky behavior — were countered by the fact that neighborhoods weren’t at fault for the impending foreclosure boom.

For more, see Kucinich: Neighborhoods Are Blameless ‘Victims’ in Subprime Crisis.

See also, The Talk Radio News Service: Foreclosure crisis is leaving neighborhoods in ruins.

"Chairman Dennis Kucinich (D-Ohio) said that “when foreclosure leads to vacant and abandoned properties, surrounding neighborhoods and local municipalities suffer significant consequences.” Kucinich said these include:

• falling neighborhood-wide property values,
• equity loss,
• decreased rental availability,
• lowered business rates for merchants,
• increased crime from arson and vandalism,
• increased building and demolition costs,
• increased legal expenses and reliance on governmental service programs, and
• loss of tax revenue.

Kucinich called the neighborhoods “totally blameless” victims of the crisis who “had nothing to do with the transactions that resulted in the subprime mortgage meltdown.”"

Go here and go here for other posts on vacant homes leaving its mark on neighborhoods. neighborhood destruction from foreclosures zach

Foreclosure Crisis A Factor In Turmoil For School Districts, Students?

The Wall Street Journal reports:

• Some school districts, hoping to control costs and prevent overcrowding, are intensifying efforts to make sure students actually live where they are registered. Districts from Florida to California are hiring private investigators, creating anonymous tip lines and imposing penalties when they believe people have registered at false addresses. The measures often are spurred by parents who feel they pay a premium in property taxes to get their children into good schools.

***

• One reason for the crackdown is the rise in home foreclosures, which may prod parents into faking addresses to keep their children at their current schools, some in the field say. "Foreclosure rates are up. Displacement is up. People are becoming homeless," says William Beitler, a private investigator specializing in address verification for school districts in the Chicago area.

***

• For families facing foreclosure, avoiding a school change is often a priority. "For us, it was huge," said Mike Bertrand, a 36-year-old father of two in Newbury Park, Calif. [...] Carmela Sanchez is desperately trying to hang on to her house so her daughters, 11 and 16, can stay in their Highland Park, Ill., schools and keep up their ballet training. [...] The bank has said she can stay in the house until at least the end of the year. If she can't work out new loan terms with her bank, she figures, she'll have to pull the kids out of school and move somewhere less expensive. "I'm petrified it will affect them," she says. "They've been through enough."

For more, see School Districts Get Tough As Home Foreclosures Rise (if link is unavailable, go here - then click link for the story; you may also have to click the "Refresh" button on the web page to get to the story).

Another Unfinished Neighborhood, More Frustrated Homeowners

In North Texas, WFAA-TV Channel 8 (Dallas/Fort Worth) reports:

• [T]he mortgage crisis has hit the Princeton subdivision hard. Two bare slabs are right next to each other, both with foreclosure signs in the yard. Neighbors there say there is a lot of unfinished work that needs to be done.

***

• The housing crisis has hit hard on subdivisions like Princeton Meadows and Forrest Grove. There are overgrown lots, abandoned homes, and angry homeowners. What really frustrates neighbors is that they are paying hundreds of dollars in fees for an unfinished neighborhood. “We give them money, and what do they do? What are they doing with our money? I don’t know,” said Gayle Wargo, homeowner.

For more, see Homeowners upset over unfinished neighborhood.

Two Year Old Found In Abandoned Building Warding Off Squatters, Thieves

In New Bedford, Massachusetts, The Standard Times reports:

• Nicole Amaral thought she was hallucinating when she saw a dog peeking out of the second story of a dilapidated building on Coggeshall Street. But the 11-year-old animal lover got her mother to stop the car. Sure enough, a dog was there, barking out a window. The family called Animal Control. They weren't the first to notice the dog. New Bedford Animal Control officers said they have gotten several calls about Berta, a 2-year-old German shepherd that has been kept at the house to ward off squatters and thieves since the building was destroyed by arson less than a year ago. The house is uninhabitable by humans, but the rules are different for dogs. "As long as (the owner) provides shelter, food and water" for the dog, it is allowed to stay in the house, Animal Control Officer Mary Ellen Barlow said. She assured concerned neighbors that the dog is well cared for. "He's in good shape," she said.

Source: German shepherd guards New Bedford house hit by arson.

Kansas Homeowner Fights Back Against Option One With Video

A video appearing on iReport.com is the work of a Kansas homeowner, and reflects the negative experience she had with H&R Block's subsidiary, Option One Mortgage Corporation, in connection with a home mortgage that she had with them. Creating the video is part of her fight against the companies. To watch the video, check out "Predator."

City Of Baltimore, Wells Fargo Slug It Out In Federal Court

In Baltimore, Maryland, The Baltimore Sun reports:

• In the latest accusation over who's to blame for hundreds of home foreclosures, city attorneys filed a motion last night in federal court saying that Wells Fargo Bank's actions are far more devious than the city's and that the court should force the lending institution to pay the city millions of dollars in lost revenue.

• The city and Wells Fargo have each blamed each other for the mortgage crisis: First, Baltimore said Wells Fargo Bank was responsible for hundreds of home mortgage foreclosures. Then, the bank shot back with allegations that the city forecloses on many more homeowners through its own tax lien programs.

• In the motion filed in U.S. District Court in Baltimore late last night, attorneys for the city argue that Wells Fargo's motion to dismiss the city's case should be ignored and that the bank's attempt to blame local government for housing problems and urban ills is "palpably false."

For more, see City says federal court should force Wells Fargo to pay for lost revenue (The two have blamed each other for hundreds of Baltimore home foreclosures).

In a related story, see Baltimore Business Journal: Baltimore alleges Wells Fargo targeted homeowners with needless refinancing offers.

To view the lawsuit, see Mayor and City Council of Baltimore v. Wells Fargo Bank, N.A., et al. (8.76 MB).

Go here for other posts referencing Baltimore's battle with Wells Fargo.

Countrywide's Mozilo "Disgusted" By Homeowners' "Form Letter" Pleas For Help; Sets Off Furor

In California, The Los Angeles Times reports on the furor set off by Countrywide chief Angelo Mozilo when he clumsily hit "Reply" instead of "Forward" on an email from a homeowner seeking help in saving his house:

• Apparently clicking "reply" when he meant to hit "forward," Countrywide Financial Corp. Chairman Angelo Mozilo ignited an online furor Tuesday by describing a mortgage customer's plea for help as a "disgusting" example of form letters inundating the Calabasas home lender. Mozilo's e-mail rocketed back to the customer, Daniel Bailey Jr., who had asked Countrywide to modify the terms of his loan so he wouldn't lose his home of 16 years.

• Much of the language in Bailey's message to Countrywide was borrowed from a form letter available at the website LoanSafe.org, a coaching service for troubled borrowers. Bailey, who says he operates a photo studio, posted his e-mailed exchange with the lender on a LoanSafe forum.

• His original e-mail was sent to 20 Countrywide addresses, including Mozilo's. Such mass e-mails have overwhelmed e-mail boxes at Countrywide, disrupting its operations and prompting Mozilo's heated response, the company said. "This is unbelievable," Mozilo said in his e-mail. "Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the Internet. Disgusting." The reply touched off debate on housing websites.

For more, see Countrywide Financial Chairman Angelo Mozilo's e-mail sets off a furor (He calls a borrower's plea for help a "disgusting" example of form letters inundating the Calabasas mortgage lender).

Go here for the e-mailed exchange with Mozilo on a LoanSafe forum.

See also, The Wall Street Journal Blog: Oops! Countrywide Chairman Mozilo’s ‘Disgusting’ Email.

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

Upcoming Hurricane Season Poses Threat To Vacant Foreclosures, Unfinished / Abandoned Homes & Adjacent Neighborhoods In Coastal Areas

Housing Wire reports:

• As the hurricane season ramps up, fallout from the ongoing mortgage crisis provides a new, potentially hazardous twist; vacant properties that may be ill-prepared to handle a storm. The Institute for Business & Home Safety said Tuesday that more than half a million properties in hurricane-prone states are in some stage of foreclosure, and warned that the many thousands of foreclosed homes standing empty in coastal areas from Texas to Maine could exacerbate property damage in their neighborhoods if the wind starts to blow.

***

• IBHS notes that a house is most vulnerable to high winds when the building “envelope” is not sealed by approved forms of opening protection, such as storm shutters or reinforced garage doors. Building materials and other debris from partially completed new homes sitting unsecured along the coasts also could become shrapnel or missiles impacting nearby buildings [and people].

For more, see Half a Million Foreclosed Properties Face Hurricane Damage.

Flood Of Foreclosures, "For Sale" Signs Hitting Working Class Northeast Neighborhoods Hard

The extent to which the residents in Northeast working class neighborhoods are being hurt by foreclosures and the high level of housing inventory currently on the market is described in three recent articles on the state of affairs of neighborhoods in The Bronx (New York), Newark (New Jersey), and New Bedford (Massachusetts). For more, see:

• The New York Daily News: Foreclosures affect Bronx homeowners,
• The Newark Star Ledger: The mortgage crisis' block of despair,
• The Standard Times (New Bedford): Neighbors cope with blight of vacant houses.

Go here and go here for other posts on vacant homes leaving its mark on neighborhoods. neighborhood destruction from foreclosures zach

Guidance From Tax Man On Loan Mods Welcome News For Mortgage Servicers

Housing Wire reports:

• In clarification that market participants said will further embolden servicers to modify mortgages that are likely headed for trouble, the Internal Revenue Service on Monday outlined the tax effects on securitized mortgages that have been modified to avoid foreclosures. Under Revenue Procedure 2008-28, the IRS said that it will not challenge the tax status of securitization vehicles when a servicer modifies a loan — even a performing loan — so long as the modification fits within the new scope outlined by the government agency.

***

• Many servicers have been looking to work with borrowers proactively, ahead of potential default activity, but have been unsure about whether doing so might jeopardize the favored tax status of a particular securitization trust. The reason is tied to IRS rules regarding the favorable tax treatment of REMICs, which mandate not only a static pool requirement but a “passive management” requirement that has served to essentially limits servicers’ ability to modify loans to only those situations where a default is deemed imminent — in other words, to those situations where borrowers have already become delinquent on their payments.

***

• The guidance from the IRS dovetails with January clarification from the Securities and Exchange Commission that suggested fast-tracking loan modifications would not jeopardize the so-called QSPE election, which allows the off-balance sheet treatment of REMICs and other securitization trusts.

For more, see IRS Issues Guidance on Loan Modifications.

Go here for IRS Revenue Procedure 2008-28.

Go here for other related posts on mortgage servicing issues. MortgageServicingIssuesAlpha

Voluntary Foreclosures On The Rise?

Forbes reports:

• To the distress of many banks and investors, American borrowers are increasingly viewing voluntary foreclosure as a practical financial decision, stripped of its taboo. Perhaps a bigger problem is that banks don't want to talk about the problem and they don't appear to know what to do about it. As long as it persists, there will be downward pressure on home prices, especially in overbuilt markets where the supply of housing already outstrips demand.

***

• In mid-April, Chief Risk Officer Don Truslow of Wachovia acknowledged the troubling trend during a conference call: "I don't know where the tipping point is, but somewhere when a borrower crosses the 100.0% loan-to-value, somewhere north of that . . . their propensity to just default and stop paying their mortgage rises dramatically and really accelerates up."

• Even more disconcerting, Truslow added that the trend was "almost regardless" of borrowers' creditworthiness. Lender's are beginning to report that loan-to-value ratios are better indicators of the likelihood of default than borrowers' FICO scores, a widely used metric of creditworthiness developed by Fair, Isaac. (See "Subprime In Sheep's Clothing")

For more, see Deadbeat Homeowners Hit The Road.

Non Profit Law Firm To Offer Predatory Mortgage & Mortgage Foreclosure Clinic

In Watsonville, California, The Salinas Californian reports:

• The Watsonville Law Center is offering a legal-advice clinic to help counter predatory lending practices against low-income communities in Santa Cruz and Monterey counties. The Predatory Mortgage and Mortgage Foreclosure Clinic will be held Thursday [May 22, 2008] with volunteer attorneys giving free legal advice to low-income clients who believe they have been victims of predatory home loans and are facing mortgage foreclosure.

Information: 722-2845, www.watsonvillelawcenter.org.

Source: Law center holding mortgage advice clinic.

Another Alleged Foreclosure Rescue, Equity Stripping Scam Victim Points Finger At Head Brothers

In Lawndale, California, The Daily Breeze reports on the story of an area couple who say they were ripped off out of their home equity in an alleged foreclosure rescue scam by a guy named "Mike" and "Mike's" brother. According to the story:

• "Mike" was Jeremy Michael Head, 30, of Huntington Beach. He is now awaiting trial on a 13-count indictment for mail fraud, money laundering and other related offenses. Head and 15 others were indicted Feb. 28, charged with fraudulently taking $6.7 million.

• Head's brother, Charles Head, was the alleged ringleader of the scheme. He was indicted a second time on March 13 with six others. He is accused of orchestrating an "equity stripping" scheme that netted $5.9 million. More than 300 known victims and 150 homes were involved in the fraud, said Lauren Horwood, a spokeswoman for the U.S. Attorney's Office.

For more, see Lawndale couple counts cost of home fraud (Clark family hoped to reduce payments, but refinancing became nightmare).

Go here for other posts on the Head nationwide foreclosure rescue operation.

Court Bans Flipper From Real Estate Business In Iowa

In Des Moines, Iowa, The Associated Press reports:

• A Des Moines real estate investor accused of consumer fraud has been banned from doing business in Iowa. A Polk County District Court judge on Monday ordered John Davis to stop selling, renting, leasing or investing in real estate in Iowa. The order resolves a consumer fraud lawsuit filed by the Iowa attorney general's office against Davis and his companies in 2006. Davis, who agreed to the terms of the order, also was ordered to pay $30,000 to reimburse consumers.

***

• Iowa Attorney General Tom Miller says the lawsuit alleged that Davis sold homes at highly inflated prices to customers with average or below average credit scores. He says Davis also used phantom down payments to help customers get mortgages. Miller says all the loans cited in the lawsuit ended in foreclosure.

Source: Court bans real estate investor from doing business in Iowa.

From the Iowa Attorney General's Office:

• Consent Judgment,
• Original lawsuit (filed 10-5-06),
• Press release.

Fairfax, Prince William Consider Homebuying Programs Targeting Foreclosed Homes

In Northern Virginia, The Washington Post reports:

• Fairfax County is developing a program to allow as many as 100 first-time home buyers to purchase foreclosed houses at cut rates to bolster the county's affordable-housing efforts and help prevent the region's mortgage crisis from causing neighborhood decline. Dubbed the Silver Lining program, county housing officials have proposed spending as much as $6.4 million over two years to help such middle-income professionals as teachers, police officers and firefighters afford the region's housing.

***

• Although Fairfax has not been hit nearly as hard by foreclosures as neighboring Prince William and Loudoun counties, the number of foreclosures has risen dramatically as a result of the subprime mortgage crisis -- from 198 in 2005 to 4,527 in 2007. Most of the foreclosures are clustered in Springfield, Herndon, Centreville and the Route 1 corridor. The situation has raised concerns about depressed property values, a decline in maintenance and higher rates of crime, including vandalism.

***

• A similar proposal will be considered today in Prince William, where county staff will present a program to supervisors that would make low-interest loans available to county employees to encourage them to buy houses there.

For more, see Fairfax May Offer Deal On Foreclosed Homes.

Squatters Pocketing Money Renting Out Homes They Don't Own; Others Hit Up Lenders In "Cash For Keys" Deals

Reuters reports:

• [S]quatting is on the rise across the United States as foreclosures surge, eviction notices mount and homes go unsold for months, complicating the worst U.S. housing slump in a quarter century and forcing real-estate brokers to enlist the help of law enforcement and courts to sell empty houses.

• In some regions, squatting is taking on new twists to include real-estate scams in which thieves "rent out" abandoned homes they don't own. Others involve "professional squatters" who move from one abandoned home to another posing as tenants who seek cash from banks as a condition to leave the premises -- a process known by real-estate brokers as "cash for key."

For more, see As homes foreclose in U.S., squatters move in. unwitting tenant rent scam yacht