City Of Buffalo v. ABN Amro Mortgage Group Inc.

For those of you who have recently been looking for a copy of the lawsuit brought by the City of Buffalo, New York against a host of lenders on account of the blight caused by abandoned houses in foreclosure in that city, see City of Buffalo v. ABN Amro Mortgage Group Inc., et al. (3.67 MB; available online courtesy of the law firm Skadden, Arps, Slate, Meagher & Flom LLP).

I recently discovered an expired link that appeared in several earlier posts referencing this lawsuit that I have since corrected. If any of you have a problem with this link in the future, simply email me at HomeEquityTheft@yahoo.com and I'll email the lawsuit to you (please put "City of Buffalo v. ABN Amro" in the subject line).

Sorry for any inconvenience the expired link may have caused.

For other "blight-related" and public nuisance lawsuits brought by municipalities and others, see:

• Lawsuit - Commonwealth of Massachusetts v. Doherty,
• Lawsuit - City of Cleveland v. Deutsche Bank Trust Company, et al. (if you have a problem with this link, drop me a line at HomeEquityTheft@yahoo.com and I'll e-mail it to you - be sure and put "City of Cleveland v. Deutsche Bank" in "subject" line),
• Media report - Cleveland sues 21 investment banks over subprime mess,
• Media report - St. Paul threatens legal action against banks that own vacant houses,
• Media report - Cities sue home lenders (Civic group, City of Minneapolis initiate legal action taking banks, lenders to court for failing to fix up foreclosed homes) (Go here for entire story on one web page),
• Media report - Empty Homes Spur Cities' Suits (Banks, lenders sued to recover costs),
• Blog entry - Cleveland Housing Court Judge Hammering Foreclosing Lenders With Fines, Code Violations.

Lenders, Title Company Agree To Fork Over $8.9M To Settle Allegations Of Screwing Over FHA-Insured Loan Program By Submitting False Claims

In two unrelated cases, the U.S. Justice Department has recently settled civil lawsuits brought against two financial institutions and a title company for allegedly screwing over the FHA-insured mortgage loan program.

In one case, the U.S. Attorney for the Eastern District of Michigan announced:

• The Department of Justice announced [...] that National City Mortgage, Inc. has agreed to pay $4.6 million to settle allegations arising under the False Claims Act concerning fifty-eight federally insured loans for mortgages submitted to the Department of Housing and Urban Development (HUD). [...] The United States alleges that National City improperly submitted fifty-eight late endorsement loans for FHA insurance coverage which were already "in default" prior to their submission, in violation of the FHA regulations.

For more, see U.S. Attorney press release: $4.6 Million Settlement with National City Mortgage, Inc. Involving Federally Insured Mortgages.

In a second case, the U.S. Attorney for the District of Arizona announced:

• The United States reached a civil settlement with Wells Fargo Bank and Ticor Title Agency of Arizona. In the settlement, Wells Fargo Bank has agreed to pay $4,046,786 and Ticor Title has agreed to pay $265,370.

• Under certain circumstances, the Federal Housing Administration’s “pre-foreclosure sales” program allows homeowners with federally-insured loans to avoid foreclosures by listing their homes for sale. If a sales price is not enough to pay-off a loan, then the lender submits an insurance claim to the Federal Housing Administration which will pay the lender the balance owing on the loan.

• The United States contends that Wells Fargo Bank submitted more than 70 false claims to the Federal Housing Administration under the pre-foreclosure sales program and that Ticor Title prepared inaccurate escrow documents which allowed lenders to submit false claims to the Federal Housing Administration. [...] Wells Fargo Bank and Ticor Title deny the United States’ contentions but agreed to pay the amounts listed above.

For more, see U.S. Attorney press release: United States Reaches $4.3 Million Settlement With Wells Fargo Bank And Ticor Title.

Mass AG Bags Five In Alleged Straw Buyer Scam Connected With Widespread Foreclosure Rescue Scam; As Many As 60 Homes Involved; Probe Continues

Massachusetts Attorney General Martha Coakley's Office announced Friday:

• Two bank employees, a mortgage broker, an assistant of the mortgage broker, and a Worcester man had 106 indictments returned against them late [Thursday] in connection with allegedly creating false or misleading bank documents that were then used to obtain fraudulent mortgage loans in the millions of dollars.(1)

***

• Authorities allege that the defendants conspired to produce false bank documents that were pivotal in fraudulently obtaining millions of dollars worth of loans. These bank documents were known as verifications of deposit, or VODs. [...] Authorities believe that the false VODs were used to bolster the loan applications of “straw buyers” in a widespread foreclosure rescue scheme. At this time, the investigation remains ongoing.

For the whole story, see Five People Indicted in Elaborate Mortgage Fraud Scheme (Four of These Individuals Arraigned [Friday] in Superior Court).

See also, Worcester Telegram & Gazette: Five indicted in massive mortage fraud scheme (Prosecutors allege a massive mortgage fraud scheme involving as many as 60 properties in Worcester County over the last two years).

(1) Those indicted are: Erik Tancun, age, 29, of Marshfield, Steven Stapleton, age 36, of Waltham, Kenneth Garabedian, age 51, of Worcester, Martha Sass, age 46, of Marshfield, and Thomas Itemere, age 28, of Worcester.

Sacramento Feds Indict Five In Alleged Straw Buyer Mortgage Scam

In Sacramento, California, KCRA-TV Channel 3 reports:

• A federal grand jury returned an eight-count indictment Thursday charging five people with conspiracy to commit bank fraud and other related charges in a mortgage fraud scheme, [Eastern District of California] U.S. Attorney McGregor Scott said.

***

• [Robert] Martinson and [his wife, Sheryl] Hayden operated a branch of MAC Real Estate Services [...]. Scott said the couple purchased dozens of homes as investment properties, [...] then recruited straw buyers and others to purchase the homes as the housing market began to slow. Scott said loan processors Rick and Melissa Villegas helped Martinson create fraudulent loan applications, and also helped Martinson and Hayden by paying "substantial kickbacks" to at least one straw buyer. [Kathleen] Delapp, a loan processor for MAC Real Estate Services, forged signatures and knowingly forwarded at least one false loan application, Scott said.

• According to the indictment, after the lenders funded the loans, Martinson and Hayden [...] would receive substantial loan proceeds from the sales of the homes, and Delapp and Rick and Melissa Villegas would receive fees and other compensation as a result of the fraud.

For the story, see 5 Charged In Mortgage Fraud Case (2 Arrested, 2 Previously Released On Bond).

See this press release for a summary of recent mortgage fraud prosecutions by U.S. Attorney's office for the Eastern District of California.

Thanks to Tim McDaniel for the tip on the story.

Albany DA Gets 64 Count Indictment Against Two Charged In Alleged Mortgage Scam Involving 25+ Homes

In Albany, New York, WXXA-TV Channel 23 reports:

• Former Albany Urban League President Aaron Dare is now facing more charges in connection with his real estate deals. A judge unsealed a more than 59 count indictment [Friday] accusing Dare and his girlfriend of mortgage fraud -- falsifying records and artificially boosting appraisals on buildings now headed into foreclosure.

• Aaron Dare and Ana Monteiro were arraigned in Albany County Court [Friday] morning on a total of 64 counts ranging from money laundering to grand larceny to falsifying records. The [Albany County] district attorney's office says they stole more than $1.5 million from mortgages they got through bogus down payments and inflated appraisals while deflating the hopes of their investors.

• There are more than 25 homes throughout Albany’s Arbor Hill and West Hill neighborhoods, and elsewhere in Albany County, that Aaron Dare and Ana Monteiro are accused of helping other people buy while helping themselves to money from the mortgages on them.

For more, see Aaron Dare, girlfriend indicted on mortgage fraud charges.

See also, Albany Times Union: Massive wave of fraud alleged.

Arkansas AG Files Suit Against Developer For Loan Default On Land Parcels Sold To Consumers Using Installment Land Sales Contracts

In Northwest Arkansas, the Arkansas Democrat Gazette reports:

• [L]ast week, Attorney General Dustin McDaniel sued [developer Wayne] Watkins and some of his business associates, saying they had violated the Arkansas Deceptive Trade Practices Act. Watkins, the suit read, had “engaged in a concerted scheme to knowingly deceive both consumer purchasers and banks to keep his financial house of cards from tumbling.”

According to the story:

• [Watkins] sold hundreds of parcels of land, often financing the deals himself. Buyers signed installment land-sales contracts and were promised deeds once they made the last payment. Until then, the land remained in Watkins’ name.

• Many of Watkins’ customers lost their money and the land they thought they were buying when he defaulted on $ 2.6 million in loans he obtained by using the land he was selling as collateral. Because Watkins did not record the contracts at the courthouses in Sharp or Fulton counties, there was nothing showing lenders that buyers had a legal interest in the land.

***

• Foreclosure records and other documents show that Watkins’ land sometimes had one or more bank liens that buyers never knew about because they did not conduct title searches on the property. At least one buyer told the Arkansas Democrat-Gazette that Watkins’ salesmen discouraged him from having a title search.

For more, see Land-sales firms see image take hit.

Go here and go here for stories on how easy some found it in getting screwed over in these lease/option, "rent to own" and contract for deed, and installment sale contract real estate deals. rent to own lease purchase option scams yellowstone

Ohio County To Squeeze Extra $400 From Lenders Filing Foreclosures

In Pomeroy, Ohio, The Daily Sentinel reports:

• Financial institutions filing foreclosure actions in Common Pleas Court will be required to pay an additional $400 above and beyond court costs, beginning July 1, to address an increase in the foreclosures handled by the court. Meeting Thursday, Meigs County Commissioners established a new line item in the general fund for a “Special Projects Fee for Foreclosure Actions,” to be paid by banks and other plaintiffs filing foreclosure lawsuits.

Source: New charge will address increase in foreclosure filings.

Mass AG Obtains Judgment Against Housing Authority In Disability Discrimination Case

The Massacusetts Attorney General's Office recently made the following announcement:

• [Earlier this month], Attorney General Martha Coakley’s Office obtained a consent judgment from Judge Herman Smith in Middlesex Superior Court against the Cambridge Housing Authority (“CHA”), which resolves claims that the agency violated state anti-discrimination laws by illegally denying a disabled tenant’s request for a two-bedroom housing voucher. CHA currently owns 2,700 housing units in the city of Cambridge and administers 2,300 housing vouchers to Cambridge residents. Under the terms of the agreement, CHA must provide the tenant with a two-bedroom voucher and payment in the amount of $7,500.00, and adopt comprehensive anti-discrimination policies and procedures for all of its properties.

For more, see Mass AG press release - Attorney General Martha Coakley Obtains Judgment Against Cambridge Housing Authority in Housing Discrimination Case.

For a different point of view of this matter, see Letter from Executive Director, Cambridge Housing Authority (if link expires, try here).

Cops Seek Phony Landlord For Pocketing Rent On A Home In Foreclosure He Didn't Own

In Greeley, Colorado, The Associated Press reports:

• Authorities are looking for a man suspected of taking money from people after he offered to rent them a home that was in foreclosure. Police say former Greeley real estate agent Gunnar Weber cashed two checks worth more than $1,500 from a couple who wanted to rent a house Weber claimed to own. The Weld County Public Trustee's office later told the couple the house was being foreclosed. The District Attorney's office has filed charges against Weber and there's a warrant for his arrest. The 28-year-old faces two felony counts of theft.

Source: Realtor Allegedly Tried Renting Foreclosed Home.

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

"The Third Time's A Charm" As Town Finally Demolishes Vacant Foreclosed Home After Being Torched Three Times In Two Months

In Bristol Township, Pennsylvania, The Trentonian reports:

• An unoccupied home in the township's Croydon section was demolished [earlier this week] after it apparently met with an arsonist's flames for the third time in two months. [...] The home, which had been lost to foreclosure in July of last year, was burned in two previous arson fires, one on April 23, then again in mid-May. "It's just too much," said Laura Haertter, whose home across the street from the targeted house was damaged in this third round of likely arson. "Three times? Arson three times? It's just ridiculous. We begged everybody to tear it down, but no one would do it."

Reportedly, there was extensive damage to some of the surrounding homes and one neighbor had two cars destroyed in the fire.

For more, see Third blaze in two months.

For other recent stories on foreclosure homes going up in smoke, see:

• Birmingham, Alabama: Fire destroys house in eastern Birmingham (A Birmingham fire department official said the house was under foreclosure, but was occupied by as many as eight people - I wonder if they overloaded the electrical sockets),

• Orlando, Florida: Orange County Home In Foreclosure Found Burning By Neighbor (Firefighters had to spray water on nearby homes to keep the hot fire from spreading. No one is currently living in the home, which neighbors say is in foreclosure).

Moldy Buildings In Foreclosure An Issue In South Florida

In Miami, Florida, WFOR-TV Channel 4 reports:

• Mold and foreclosure--they might not seem to be a correlation between the two at plain sight, but if you're talking about South Florida's foreclosure crisis you might see that sometimes they go hand in hand. Because of recent skyrocketing short sales and foreclosures in Miami's real estate market, many high rise buildings now have mold growing inside.

***

• Even some of the most luxurious condos in town have been affected. This often happens because owners who are going through short sales or foreclosures end up cutting off their AC, sealing up the unit, and never looking back.

• "These enclosed spaces, you have high temperature, stagnant air, you have high humidity," said Samir Elmir of the Miami-Dade County Health Department. "It's a perfect ground for mold basically to grow," he said. And mold doesn't respect property lines, especially in buildings with central air. "There is an opportunity for the mold to disperse through the duct system," said Elmir.

For more, see Beware Of Mold In Foreclosed Homes (read story) (watch video). meth lab yak

NBC Nightly News On "Foreclosure Pets"

In Seattle, Washington, the NBC Nightly News with Brian Williams ran a story on Wednesday night on the foreclosure pet problem being reported all over the country. In addition to cats and dogs, horses, pigs, and goats are among those other pets seeking their own form of "foreclosure rescue."

To watch the story, see Foreclosure Pets (video only; bad link corrected 6/28/08, 11:30 a.m.)

For other posts on foreclosure pets, go here and go here. petsII and foreclosures

"No Paws Left Behind" Web Site To Help Foreclosure Pets Find Housing Options

DS News reports:

• A few short months after Integrated Mortgage Solutions President Cheryl Lang conceptualized the idea of starting a Web site to help pets left behind in foreclosures, her new nonprofit Web site No Paws Left Behind (www.NoPawsLeftBehind.org) has officially launched to give families with pets a place to find security for their furry friends.

• Lang designed No Paws Left Behind as a 501c3 nonprofit organization, where visitors can type in their zip codes and find local animal shelters and other housing options for the animals they can’t afford to take with them. Lang also has created an online petition that encourages citizens to ask policy makers to change laws that are currently delaying the animal rescue process when dealing with foreclosures.

For more, see No Paws Left Behind Web Site Officially Launches.

For more on "foreclosure pets", go here and go here. petsII and foreclosures

Cleveland-Area Courts To Begin Foreclosure Mediation Program

In Cuyahoga County, Ohio, a Cleveland Plain Dealer blog reports:

• Cuyahoga County Common Pleas Court is instituting a new mediation program to help some property owners and lenders work out solutions after a foreclosure lawsuit has been filed. The goal of foreclosure mediation is to save time and money in working out agreements between lenders and borrowers and to prevent properties from becoming vacant and abandoned.

• The mediation program will begin in the next few days with the mailing of postcards to defendants in new foreclosure lawsuits. The postcards will tell borrowers how they can seek free legal help through the state's Save The Dream program or financial counseling through the United Way's 2-1-1 First Call for Help hotline.

For the story, see Mediation available to ward off foreclosure.

Foreclosure Defense A Popular Subject At Florida Bar Convention

In Boca Raton, Florida, the South Florida Business Journal reports:

• A foreclosure defense attorney from Jacksonville found a warm reception at the Florida Bar's convention in Boca Raton last week. About 20 attorneys swarmed the podium after April Charney delivered her speech during a session titled "Protecting Consumers from Housing Havoc." "This was the best speech I've ever seen on this topic," Fort Lauderdale attorney Ken Whitman said. Charney has made a name for herself at the Jacksonville Legal Aid Society for getting dozens - she said hundreds - of foreclosure actions tossed out of court.

Source: Foreclosure defense a popular subject at Bar convention (the rest of the story requires a paid subscription).

USA Today On Mortgage Servicing Fraud & Abuse

USA Today recently ran a story describing various court cases around the country involving the grievances of homeowners against the companies that service their mortgages, the billing and collection practices these firms engage in, and the abuse of the bankruptcy process that they have been reportedly engaging in. The following excerpt describes a couple of the cases:

• In New Hampshire, Michael Dillon, a handyman and former freelance stage technician, won a 2005 state court decision upholding his allegations that Fairbanks Capital improperly tried to foreclose on his Manchester home. Judge Gillian Abramson issued a contempt ruling after concluding Fairbanks had "created a predatory scheme of penalties," in part by billing him for fees for which Dillon "did not receive any notice." The ruling ordered the firm to give Dillon a chance to reinstate the mortgage "without penalties." The litigation is continuing.

• In Louisiana, a bankruptcy-court review of accounting by Wells Fargo Home Mortgage found the firm's servicing arm collected nearly $25,000 more from Michael Jones than he owed on his Mandeville home. Judge Elizabeth Magner ordered a refund and told Wells Fargo to pay more than $67,000 in sanctions and damages. The firm has appealed.

• [I]n Illinois, a lawsuit that consolidated 18 cases from 10 states accuses Ocwen Financial of engaging in a "nationwide scheme of illegal, unfair, unlawful and deceptive business practices" involving improper fees, costs and other charges. The case is in settlement negotiations, court records show.

For more, see Hitting Home: Homeowners fight for their mortgage rights.

Go here, go here, and go here for posts on questionable mortgage servicing practices. questionable mortgage servicing practices tactics xero

Boulder Woman Suspected Of Improper Use Of POA To Mortgage Home, Swipe Refinance Proceeds From 92 Year Old Lady

In Boulder, Colorado, the Boulder Daily Camera reports:

• A 60-year-old Boulder woman has been arrested on suspicion stealing from an 92-year-old lady by refinancing the elderly woman's home three times without permission and taking the payouts, according to the Longmont Police Department. Eileen Marie Banman turned herself in to Longmont police Tuesday and was arrested on a warrant for theft over $20,000 and crimes against at-risk adults. According to Longmont police, the elderly woman's home already was paid off when Banman obtained power of attorney to "assist" the alleged victim by writing out checks for her.

Cops say the home is now in foreclosure.

For more, see Boulder woman suspected of stealing from 92-year-old.

See also:

• Woman accused of running up $200K in debt against 92-year-old’s home,
• Arrestee accused of refinancing elderly woman's house 3 times without permission.

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

Go here, go here, go here, and go here for other posts related to deed or refinancing scams by forgery, swindle, etc. DeedTheftAlpha FinancialAbuseOfElderlyAlpha

Dayton Feds Indict Six In Mortgage Fraud Involving 210 Properties, 63 Investors, $15M In Bogus Loans; 90% Ended In Foreclosure

In Dayton, Ohio, the Dayton Daily News reports:

• Five Dayton-area residents were indicted Wednesday, June 25, on federal charges they were operating an extensive mortgage fraud scheme that affected more than 200 area properties. Also indicted was a former Centerville resident who now lives in East Cleveland.(1)

***

• The scheme involved 210 residential properties, including 205 in Montgomery County, along with 63 investors, and led to foreclosure of more than 90 percent of the properties, [United States Attorney Gregory G.] Lockhart said. [...] Those purchases were financed with $15 million in mortgage loans obtained through fraud committed against 33 lending institutions, the indictment said.

For more, see Five Dayton-area residents indicted in mortgage fraud case.

(1) The indictment charges the following people: Julian M. Hickman, 30, of East Cleveland; Kamal J. Gregory, 34, of Centerville; Jessica A. Zbacnik, 41, of Monroe; Robert Mitchell, 42, of Vandalia; Edward McGee, 74, of Dayton; Kenneth O. McGee, 49, of Dayton. The six operated and controlled various real estate, mortgage and title insurance-related businesses and corporations throughout the Greater Dayton area including Commercial Property Advisor Group (CPAG), Diamond Vision Capital Group, First Union Appraisals, Gem City Professional Services (GCPS), Option One Appraisals, JMH Real Estate, River City Appraisers, Alliance Mortgage, Gregory Investments, Inc., KG Enterprises, Mad River Properties, Premier Mortgage Funding of Ohio, Star Point Mortgage, Ohio Financial Group, Mortgages Unlimited, Allied Mortgage, E & A Investments, and KM Investments.

Central Florida Legal Group Gears Up For Homeowner Foreclosure Defense

In Central Florida, the Orlando Sentinel reports:

• Community Legal Services of Mid- Florida and volunteer lawyers from the Florida Bar are creating a "Foreclosure Defense Project" and this week launched a recruitment effort from the region's legal ranks to bring more firepower to bear on the growing threat to community stability. Bill Abbuehl, executive director of the Daytona Beach based Community Legal Services of Mid-Florida, put out a call for pro bono attorneys to "help meet the enormous legal needs arising from the current foreclosure crisis."

***

• A training session for lawyers who will step forward to help low income homeowners, looking for signs of "predatory lending" or other legal shenanigans among lenders, will be held Friday, July 11, at the Albertson Room of the Orange County Public Library at 101 E. Central Blvd. in Orlando , from 9 a.m. to 3. p.m. Space is limited so lawyers are asked to register, by calling the legal aid group at 407- 708-1020, ext. 3101, or e-mailing to janetteh@laccf.org.

For more, see Legal group to help more people facing foreclosure.

Editor's Note:

As has been noted on this blog in the past, the term "pro bono" doesn't necessarily mean that an attorney doesn't get paid for his/her services. While the services may, in fact, be "free" to the client receiving the legal services, there is a distinct possibility that an attorney representing "prevailing party" homeowners in foreclosure actions can leverage his/her pro bono services into court-ordered attorney fee awards to be imposed on the losing mortgage lender, loan servicer, etc.(1)

For examples of attorneys seeking to convert their pro bono opportunities into legal fee awards, see:

• The National Law Journal: Pro Bono Case Triggers a Fee Fight (Two recent instances of large firms collecting large fees in pro bono cases point to an increasingly controversial issue),
• New York Lawyer / New York Law Journal: NY BigLaw Leader Scores $1 Million Fee in Pro Bono Case.

Go here for other posts referencing legal fee awards in pro bono (contingent fee) cases.

(1) It may be that these cases could be better described as "contingent fee" cases; attorneys taking on these cases may be well advised to have contingent fee retainer agreements with their clients). legal fee pro bono

North Florida Legal Group Gears Up For Homeowner Foreclosure Defense

In Northern Florida, WCTV Channel 2 reports:

• Legal Services of North Florida says the rising number of foreclosures is putting Florida homeowners in a crisis. About one hundred attorneys from across Florida attended a seminar [Wednesday] to defend foreclosures and to try to help homeowners who are facing financial difficulties with home loans.

• Scott T. Manion, the Legal Services of North Florida Director of Litigation, says Florida has the second highest foreclosure rate in the nation. He said, "I got 14 foreclosures in one week. Sometimes that's about what I would get in a whole half of year. So we are definitely in a lot of trouble with a lot of our clients. We're hoping this seminar will be a start to try to alleviate some of these problems. The day-long seminar was led by nationally known attorney April Charney from Jacksonville.

Source: Building Defenses Against Foreclosure.

Produce The Note “How-To” Strategy In Fighting Foreclosures

The Consumer Warning Network website has recently posted a "How-To" that may be helpful to homeowners facing foreclosure who are not represented by an attorney but who want to force their foreclosing mortgage lender to produce the actual, physical promissory note (not a copy, reproduction, nor any other reasonable or unreasonable facsimile thereof) that the homeowner signed at the closing/settlement of the transaction in which he/she originally took out the home loan.

Included in the "How-To" are links to templates that they have created for a legal request, a letter to your lender and a motion to compel to help the homeowner through the process.

Homeowners are given this tip to determine whether the foreclosing mortgage company might have a problem producing the promissory note, and what problem homeowers may face if they allow the mortgage company to proceed without having to produce the note:

• When you get a copy of the foreclosure suit, many lenders now automatically include a count to re-establish the note. It often reads like this: “…the Mortgage note has either been lost or destroyed and the Plaintiff is unable to state the manner in which this occurred.” In other words, they are admitting they don’t have the note that proves they have a right to foreclose.

• If the lender is allowed to proceed without that proof, there is a possibility another institution, which may have bought your note along the way, will also try to collect the same debt from you again.

The post provides steps to follow in situations where the lender (1) has already filed suit to foreclose on the home, and (2) has not yet filed suit against the homeowner where the homeowner has already missed one or more payments.

For more, see Produce The Note “How-To”.

Go here for the accompanying video, Fight Foreclosure: Produce The Note "How-To", featuring Tampa, Florida attorney John Yanchunis, with the law firm James, Hoyer, Newcomer & Smiljanich PA.

Go here for a recent CNN video on the "Produce The Note" strategy.

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, Go Here and Go Here. missing mortgage foreclosure docs beta

Washington State Files Administrative Action Accusing Countrywide Of Discriminatory, Predatory Lending Practices

In Seattle, Washington, The Seattle Times reports:

• Countrywide Home Loans is facing a $1 million fine and the loss of its mortgage business in Washington after a state agency determined that it charged minority borrowers more for its loans than it charged white borrowers in similar circumstances.

• The company also could be forced to pay restitution to at least 50 borrowers the state says were victimized by the company's discriminatory pricing, according to administrative charges filed Monday by the [Washington] State Department of Financial Institutions.

• The action is the state's first ever fair-lending case, and could pressure the company — and possibly other lenders — to modify loan terms for state homeowners who are struggling to repay mortgages with high interest rates that are continuing to climb, said Deborah Bortner, director of DFI's consumer services division.

For more, see State accuses Countrywide of discriminatory lending (Countrywide Home Loans is facing a $1 million fine and the loss of its mortgage business in Washington after a state agency determined that it charged minority borrowers more for its loans than it charged white borrowers in similar circumstances).

See also:

• Seattle Post Intelligencer: State accuses Countrywide of bias (It proposes fine of $1 million),
• Governor's office press release: Gov. Gregoire announces alleged discriminatory lending by Countrywide Home Loans.

To view the Statement of Charges filed by the state, see In re Countrywide Home Loans.

Go here and go here for other posts on alleged race bias in real estate transactions.

Go here, Go here and Go here for more on other Countrywide lawsuits & other problems. countrywide consumer problems race bias predatory lending

CNN On The "Produce The Note" Strategy In Foreclosures

CNN recently ran a story on what apparently is now being referred to by some as the "Produce The Note" strategy in fighting foreclosures. Among those interviewed for the story are:

• Homeowner Jacqueline O'Brien, who currently faces foreclosure on her Central Florida home and is battling mortgage lender Wachovia who, the homeowner says, is clipping her left and right with fees and won't re-work the payments on her home loan,

• Professor Katherine M. Porter, of the University of Iowa - College of Law (author of Misbehavior and Mistake in Bankruptcy Mortgage Claims, a study that concluded, among other things, that a significant number of mortgage lenders and loan servicers - and their attorneys - have been screwing up in the Federal bankruptcy courts in their attempts at improperly clipping homeowners facing foreclosure who have filed for bankruptcy protection),

• Tampa, Florida attorney Chris Hoyer (star of the YouTube video, Fight Foreclosure: Make 'Em Produce The Note!).

For the story (video), see Produce The Note.

Go here for CNN transcript of the report (begins about 2/3 down from the top of web page).

For some self-help information on approaching the "Produce The Note" strategy for homeowners facing foreclosure who are not represented by an attorney, see Produce The Note “How-To”.

Postscript:

Reportedly, at a court hearing last week, a Pinellas County, Florida judge denied Wachovia the right to proceed with its foreclosure against borrower Jacqueline O’Brien (profiled in the CNN story). Instead, O’Brien was granted a continuance, as she pursues the "produce the note" strategy. Wachovia expressed interest in renegotiating the terms of the loan, rather than continuing the court battle.

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, Go Here and Go Here. missing mortgage foreclosure docs beta

Forcelosed Homeowner Sentenced For Stripping Fixtures From House Before Sheriff's Sale

In Mercer County, Pennsylvania, The Herald reports on the antics of a local homeowner who was of the criminally mistaken belief that you can destroy your own home before a foreclosure sale inspite of the fact that, once pledged as collateral for a mortgage loan, the mortgage lender legally owns a security interest in the home:

• [Scott A.] McCuskey, 40, of [...] Sharpsville, was sentenced Tuesday for stripping his $1.2 million Jefferson Township home down to its bones before it went up for sheriff’s sale in 2006. Police said McCuskey, a former mortgage broker, admitted to taking virtually everything that wasn’t nailed down, and a few things that were, including: lights, window cranks, baseboards, ceiling and window trim, cabinets, countertops, vent covers, closet shelving, doors, tub and shower fixtures, toilets, sinks, vanities, shower doors, carpeting, locks and handles for outside doors, a Jacuzzi, benches, garage doors, side doors, garage windows and outside wall fixtures.

• “This was stripping a house. This was theft. And you are a common criminal,” [Judge Thomas R.] Dobson told McCuskey. Dobson gave McCuskey 3 to 15 months in county jail and ordered him to pay more than $174,000 in restitution to Sovereign Bank, Reading, Pa., and insurers. McCuskey was found guilty of defrauding creditors and fraud in insolvency after a trial in April.

***

• McCuskey argued that he did not know it was against the law to strip his home. He said he thought the home – which was collateral in a loan he defaulted on in October 2004 – was his until the sheriff’s sale.

For more, see Jail time ordered in house stripping; mortgage broker labeled ‘criminal'.

Go here for other posts on the legality of pre-foreclosure homeowner fixture stripping. foreclosure fixture stripping apple

“Operation Malicious Mortgage" Takes Down Six In Alleged $8.5M Seattle-Area Flipping Scam

In Seattle, Washington, the Snoqualmie Valley Record reports:

• [N]orth Bend man [Isaac Palmer, 42,] has been indicted on charges of wire fraud for allegedly participating in an $8.5 million mortgage fraud scheme. [...] Palmer is accused of conspiring with other Seattle-area defendants(1) to defraud financial institutions while “flipping” dozens of houses in 2004 and 2005.

• According to the United States Attorney’s Office, the conspiracy involved buying homes, then flipping them at inflated prices to “straw buyers,” who were recruited to pretend to buy the houses as their residences. The conspirators allegedly falsified documents to secure the loans, then split the money from the fraudulent mortgages. The straw buyers defaulted on the loans, and the homes were foreclosed, resulting in big losses for lenders.

For more, see North Bend man among 6 named in $8.5M mortgage fraud scheme.

(1) Other defendants in Palmer’s case include Brandt and William Anderson, 47, of Bellevue, Mustafa “Marc” Khosraw, 46, of Sammamish, Kristyn Jupiter Moss, 38, of Tacoma and Zachary Joseph Namie, 30, of Seattle.

Ohio Provider Of Free Legal Services Re-Opens Columbiana County Office; Needs "Business" - Looking For Clients

In Lisbon, Ohio, Salem News reports:

• Community Legal Aid Services returned to Columbiana County late last year after spending several years away due to a lack of funding. “We had sort of a minor funding crisis,” associate director Christine Legow said of the funding cut from Legal Services Corporation that forced all Columbiana County operations to be moved to Youngstown. A $50,000 annual grant from the Columbiana County Department of Jobs and Family Services provided the funds to justify reopening an office in Lisbon, but in order for the non-profit to keep that grant, the organization has to show need in the community, Legow said. Thus far, the Lisbon office hasn’t been able to provide $50,000 in services, Legow said. “We are always looking for clients,” Legow said.

***

• The organization, formerly known as Northeast Ohio Legal Services, is based in Akron and operates in eight northeast Ohio counties, providing free legal advice and representation for low income and senior Ohioans dealing with a variety of civil matters, including evictions, divorces, custody matters, foreclosures, bankruptcies and domestic violence cases. Prospective clients first call the organization’s legal hot line at 1-800-998-9454 to speak with an attorney over the phone. That phone call then determines if the person is financially eligible to receive services and if the direct services of an attorney are needed.

For more, see Legal Aid Services looking for more ‘business’ in Lisbon.

Community Legal Aid Services is a partner in the State of Ohio's Save The Dream statewide project to link homeowners facing foreclosure with attorneys. For more, see Is Your House Being Foreclosed?

Illinois AG Alleges Large Scale Unfair, Deceptive Conduct In Suit Against Countrywide, Mozilo

In Chicago, Illinois, the Illinois Attorney General's Office today announced:

• Attorney General Lisa Madigan today filed a lawsuit in Cook County Circuit Court against Countrywide, the nation’s largest mortgage lender and servicer. The complaint alleges that Countrywide Home Loans, Inc., and its parent company, Countrywide Financial Corporation, engaged in unfair and deceptive conduct on a large scale in creating, originating, marketing and servicing unnecessarily risky and costly mortgage loans for Illinois homeowners.

For the rest of the Illinois AG press release, see Illinois AG Madigan files Lawsuit Against Mortgage Giant Countrywide (Alleges Company Deceptively Sold Risky Loans Despite Borrowers’ Inability to Pay).

To read the lawsuit, see People of the State of Illinois v. Countrywide Financial Corporation, et al. (approx 3.32 MB).

Go here, Go here and Go here for more on other Countrywide lawsuits & other problems. countrywide consumer problems

California AG Tags Countrywide, Mozilo With Civil Suit Related To Shaky Loans; Seeks To Restore To Borrowers Money/Property Lost Thru Deceptive Acts

In Los Angeles, California, Reuters reports:

• California Attorney General Jerry Brown sued Countrywide Financial Corp and two top officers on Wednesday to stop the mortgage loan company from allegedly perpetrating a scheme to "mass produce loans for sale on the secondary market."

***

• Brown's office said the lawsuit, filed in Los Angeles Superior Court, also seeks unspecified restitution for homeowners(1) who were allegedly conned into risky, costly loans they did not understand by brokers desperate to meet unrealistic production goals. The suit further accuses Countrywide Chairman and Chief Executive Angelo Mozilo and David Sambol, president of Countrywide Home Loans Inc, of purposely easing underwriting standards for mortgages and home equity lines of credit in a play to double to company's share of the U.S. mortgage market.

• The Calabasas, California-based lender stands accused of deceptive advertising and unfair competition for its alleged misleading practice of emphasizing low introductory loan rates while hiding risky or costly terms and of routinely soliciting buyers to refinance shortly after their initial loans closed.

For more, see Calif AG sues Countrywide over alleged loan scheme.

From the California AG's Office:

• Read lawsuit: People of the State of California v. Countrywide Financial Corporation, et al. (approx. 1 MB),
• Press Release: Brown Sues Countrywide For Mortgage Deception.

Go here, Go here and Go here for more on other Countrywide lawsuits & other problems.

(1) California consumers who believe they have been victimized by Countrywide Consumers should file a complaint by contact the Attorney General’s Public Inquiry Unit in writing at Attorney General's Office California Department of Justice Attn: Public Inquiry Unit P.O. Box 944255, Sacramento, California or through an online complaint form: http://ag.ca.gov/contact/complaint_form.php?cmplt=CL countrywide consumer problems

Challenging Foreclosures Could Become Large, Lucrative Area Of Practice, Say Some Attorneys; Lenders May Be Fumbling Ball On Proving Debt Ownership

In New Jersey, The Star Ledger reports:

• Most home foreclosures being processed in New Jersey are illegal, a growing group of attorneys contends, because lending institutions cannot prove they own the debt they are trying to collect.

• Judges in at least four New Jersey counties already have halted foreclosures, using a federal court ruling in Ohio as precedent. And with 48,000 foreclosures expected to be filed this year -- twice the number filed in 2006 -- some attorneys believe challenging foreclosures can become a large and potentially lucrative area of practice.

• "This is starting to creep up all over the state and all over the country as people start to realize these banks don't really know who owns the (promissory) note," said Peggy Jurow, a senior attorney at Legal Services of New Jersey, which is teaching lawyers how to represent pro bono clients in these cases. "It's scary to think how many people are losing their homes who shouldn't be."

***

• There were 34,457 foreclosures filed in New Jersey in 2007. The vast majority, 96 percent, were processed by the State Office of Foreclosure with no answer from the defendants, resulting in the loss of their homes. Lawyers say 75 percent or more of those cases could have been successfully challenged.

• "The rules have been there all along," said Rob Napolitano of Community Financial Services in Keyport, which provides information to attorneys on how to help clients avoid foreclosure. "What's changed is that people are finally making the banks follow the rules, and they can't do it."

***

• Lawyers say in the midst of all that packaging and slicing, banks got careless with their paperwork. In some cases, they lost track of who owned the original promissory note or couldn't prove how they came to possess it. In other cases, lawyers say, the formation of the mortgage-backed security created a situation in which the banks failed to maintain ownership of the promissory notes.

• "These transactions have become so complex, the banks can't even keep track of what they own and don't own," said Linda Fisher, director of the Center for Social Justice at Seton Hall Law School, which succeeded in getting a foreclosure dismissed in Essex County last month.

***

• The State Office of Foreclosure has attempted to provide some guidance, informing attorneys for lending institutions that as of May 1, it no longer would process foreclosures unless the attorneys could prove their clients were the owners of the loan and had the right to collect on the debt at the time the foreclosure was filed.

For the story, see New tactic slows rate of forfeited houses in NJ.

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, Go Here and Go Here. missing mortgage foreclosure docs beta

Illinois AG To Tag Countrywide, Mozilo With Civil Suit Related To Shaky Loans; Will Seek To Modify, Rescind Mortgages Made Thru Deceptive Practices

The New York Times reports:

• The Illinois attorney general is suing Countrywide Financial, the troubled mortgage lender, and Angelo R. Mozilo, its chief executive, contending that the company and its executives defrauded borrowers in the state by selling them costly and defective loans that quickly went into foreclosure.

• The lawsuit, which is expected to be filed on Wednesday in Illinois state court, accused Countrywide and Mr. Mozilo of relaxing underwriting standards, structuring loans with risky features, and misleading consumers with hidden fees and fake marketing claims, like its heavily advertised “no closing costs loan.” Countrywide also created incentives for its employees and brokers to sell questionable loans by paying them more on such sales, the complaint said.

• In reviewing one Illinois mortgage broker’s sales of Countrywide loans, the complaint said the “vast majority of the loans had inflated income, almost all without the borrower’s knowledge.”

For more, see Illinois To Sue Countrywide.

See also:

• Crain's Chicago Business: AG Madigan to sue Countrywide Financial for fraud (Illinois AG is seeking a judgment that will order Countrywide to rescind, reform or modify all of its mortgages that were obtained by the company’s alleged deceptive practices. She also wants restitution for borrowers who lost their homes due to Countrywide’s practices),
• The Associated Press: Ill. AG to sue Countrywide over lending practices.

Go here, Go here and Go here for more on other Countrywide lawsuits & other problems. countrywide consumer problems

South Jersey Foreclosure Rescue Operator Gets Eight Years For Ripping Off 77 Homeowners

In Burlington County, New Jersey, CBS-TV Channel 3 (Philadelphia) reports:

• A Mount Laurel, New Jersey man was sentenced to eight years in prison Tuesday after pleading guilty to stealing from homeowners who hired him to save their properties from foreclosure. Peter Rogers was paid thousands of dollars by people that hoped he could help them save their homes. After collecting over $105,000 in all, he left the homeowners to fend for themselves.

• The 65-year old Rogers appeared in a Burlington County court room Tuesday after pleading guilty to defrauding 77 people who hired him to help save their homes from foreclosure. Victim after victim testified before Superior Court Judge John Almeida, telling how Rogers and his company, Express Consolidation Refinance and Mortgage Consultation, ripped them off.

For more, see Mortgage Fraud Defendant Sentenced.

In a related story, see Victims of scam have their say.

Go here for earlier posts on Peter Rogers.

400 Arrests In "Operation Malicious Mortgage" Only The Beginning, Says FBI Official Overseeing Probe

In Washington, D.C., the British Broadcasting Company (BBC News) reports:

• A senior FBI officer has told the BBC that more arrests will be made as part of its probe into mortgage fraud and the credit crunch. Section chief for Financial Crimes, Sharon Ormsby, said hundreds of arrests already made were just a "good start". [...] "It's a good start for us in our push to begin further investigations into corporate and mortgage related fraud" said Ms Ormsby, who is overseeing the FBI's Operation Malicious Mortgage.

***

• She refused to say how many more arrests the FBI expects to make in one of its biggest financial investigations, involving 200 full-time agents and more than 30 task forces across the US. But she confirmed that the Bureau was looking at every aspect of mortgage fraud, from the granting of individual loans to their bundling up and sale on Wall Street as investments.

For more, see FBI promises more fraud arrests.

Add Federal Fraud Indictment To Several Dozen Civil Suits Facing One SW Florida Real Estate Entrepreneur

In Southwest Florida, the Naples Daily News reports:

• [Fort Myers real estate entrepreneur Samir] Cabrera was in the spotlight last week following a federal indictment on charges related to a land flipping scheme. Those are charges to which Cabrera’s attorney has indicated his client will plead not guilty.

• Long before Cabrera was caught up in a nationwide crackdown on criminal real estate and mortgage dealings [Operation Malicious Mortgage], though, he was facing fraud allegations related to a separate set of deals. Several dozen lawsuits challenging Cabrera’s business practices — including a federal class action suit — are pending.

***

• The clusters of deals and losses that these disgruntled investors describe in their lawsuits are more extensive than the alleged scheme that led to Cabrera’s federal indictment last week on four counts of wire fraud. That indictment only focused on Cabrera’s role in deals involving two pieces of vacant land in south Fort Myers, while the lawsuits in both Lee County and federal court describe as much as $5 million in fraudulent dealings on up to 100 properties in Cape Coral and Lehigh Acres.

For more, see Federal charges just the beginning for Fort Myers real estate entrepreneur (Samir Cabrera is facing many lawsuits in addition to mortgage fraud accusations).

Go here for other posts on Samir Cabrera.

Detroit Feds Hit Big In Nationwide FBI Mortgage Fraud Probe

In Detroit, Michigan, Crain's Detroit Business reports:

• Two of the metro Detroit cases that are part of a major federal bust of mortgage fraud schemes in Michigan accounted for more than half — $25.4 million — of the $50 million in losses linked to the cases. U.S. Attorney Stephen Murphy reported Thursday that his office had charged 28 people in 15 separate criminal cases since March with mortgage fraud that led to the losses, mostly to financial institutions.

For more, see Mortgage fraud bust shows improved rules, enforcement.

Go here for U. S Attorney's press release.

California Real Estate Agent, Two Others Face Charges Of Defrauding Lenders, Clients

In Santa Clara County, California, the San Jose Mercury News reports:

• Gloria Alvarez was one of the top agents at a dominant East Side real estate company during the heady days of the recent real estate boom, but Thursday she was in jail facing multiple felony charges. Alvarez, 40, was arrested [last] Wednesday on a $1 million warrant as she was leaving a Santa Clara County Superior Court room where she was appearing in a civil suit for a settlement conference, which normally requires a defendant's appearance.

• The former star agent of the defunct Century 21 Su Casa real estate brokerage faces 11 felony counts, including grand theft involving an alleged scheme in which she and two relatives are accused of defrauding three lenders and several clients. [...] Also charged in the complaint are Alvarez's sister, Patricia Alvarez, and Gloria Alvarez's son, Ricardo Alvarez, a licensed notary, both of San Jose. [...] The three are accused of bilking Comerica Bank, Fremont Investment and Loan, and Countrywide Savings and Loan in the course of three real estate transactions valued at just over $2 million.

For more, see Former Su Casa real estate agent arrested, faces 11 felony counts (Woman, relatives Accused Of Scheme To Defraud Mortgage Lenders, Clients).

Ocala Homeowner Reports Trouble With Self-Described Faith-Based Foreclosure Rescue Operator

In Marion County, Florida, the Ocala Star Banner reports:

• Rebecca Dorobiala's house was sold on the steps of the Marion County Courthouse in April. As she looks back on that moment now, she regrets putting her trust and money in the hands of someone who pledged to save her home but didn't deliver on the promise. Dorobiala lost her job in 2006. Her husband came out of retirement to help with finances. When he was injured on the job, she began falling behind in her mortgage payments and went looking for help.

• In stepped Florida Faith Inc. and its owner, Mary Redford, who assured Dorobiala that the company could save her home for a fee. Redford even offered Dorobiala a job. Dorobiala was encouraged. But three months later, she walked out. Dorobiala says Redford never paid her for the work she did and failed to resolve her mortgage foreclosure. She said she was also becoming increasingly uncomfortable watching Redford promise other desperate homeowners that she could help them resolve their foreclosures and keep their homes.

For the whole story, see In bad faith?

Title Examiners Play "Hangman" With Clerk Of Courts' Computer System In Search Of Recording Screw-Ups In Sloppy Land Records

In Franklin County, Ohio, The Columbus Dispatch reports:

• Sloppy real-estate records in Franklin County could threaten home buyers with foreclosure and bump up the price of title insurance, title examiners say. They're nervous that they're missing liens hidden in the Franklin County Common Pleas clerk of courts' computer system.

• Errors include misplaced commas, last names entered as first names, first names entered as last names and debtors listed only by their spouse's name. It means that a routine search could fail to turn up a lien that could come back to haunt a home buyer. That happened recently when a Muskingum County family was hit with foreclosure papers because a county clerk had misspelled the former owner's name.

***

• "Everyone who has to use the system is basically playing roulette," said Dan Hritz, a title examiner for several large central Ohio companies. [...] In Franklin County, sleuthing out hidden liens has become almost a competition among title examiners, who say they play "hangman" with the computer, typing in every possible permutation of a name to find mistakes.

• "It's a title examiner's nightmare," said Debbie Howard, who works for a Cincinnati law firm that represents banks and mortgage companies. She searches the computer by last name and first name -- the correct way. Then, she runs a search by first name. Then she adds a comma behind the last name, a space behind the last name and sprinkles in "Jr." here and there.

• Dow T. Voelker, a Columbus lawyer who specializes in real-estate law, noticed the problem about a year ago. "You have to just sort of live in fear that, at some point, somebody is going to make a claim because you missed a lien because you couldn't find it."

For the story, see Errors in lien data could cost buyers (Misspellings, mistakes leave county guessing on property searches).

For a story on how a homebuyer got screwed because of an error in the local county land records, see The Columbus Dispatch: Clerk's error jeopardizes family's home (Undetected lien against seller haunts buyer).

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

New R.I. Foreclosure Related Laws Await Gov's OK; Lenders To Post Upkeep Bonds, Timely Pay Taxes/Utility Bills; Copper Theft Industry Also Takes Hit

In Providence, Rhode Island, The Providence Journal reports:

• Banks that repossess foreclosed properties in Rhode Island will have to pay the properties’ tax and utility bills in a more timely fashion and post bonds for the properties’ upkeep if legislation approved by the General Assembly over the weekend is signed into law by Governor Carcieri. Lawmakers’ approval of two bills aimed at cracking down on giant out-of-state banks and mortgage companies — not to mention dealers in stolen copper — represents just a handful of the dozen or more foreclosure-related bills introduced into legislature.

For more, see Bills on foreclosures await governor’s approval.

Foe story update, see Expungement, public records bills vetoed (The Rhode Island Foreclosed Property Upkeep Act is vetoed by Gov. Carcieri).

New Maryland Law Gives Financially Strapped Residents Better Chance To Save Homes From Foreclosure

In Maryland, a column in DC Chronicles notes:

• [O]n April 4, 2008, a new law went into effect [in Maryland] that addresses several aspects of the foreclosure process. The goal of this law is to give borrowers who are in default the time and information necessary to try to save their home from foreclosure.

***

• The new law does three crucial things: it requires a real service of notice; it extends the foreclosure process to a minimum of 90 days; and it requires that the borrower in default receives the name and phone number of a specific person designated by the lender to handle loss mitigation (meaning that the borrower has a designated lender's representative with whom to discuss repayment plans or other alternatives to foreclosure).

For more, see New Maryland foreclosure laws protect homeowners.

Vacant & Abandoned Property Problem Addessed At U.S. Conference of Mayors

In Miami, Florida, The Miami Herald reports:

• Underscoring one of the chief frustrations cities face in dealing with the nation's foreclosure crisis -- collecting on liens for code violations, [mayor of Louisville, Kentucky, Jerry] Abramson kicked off a strategy session at the U.S. Conference of Mayors in Miami Sunday to tackle the growing problem of vacant and abandoned property. As the nation's cities tighten budgets amid a slowing economy, preventing vacant homes from falling into decay and dragging down property values is becoming increasingly difficult.

For more, see U.S. mayors seek solutions to vacant-homes crisis (Mayors attending their conference in Miami tackled the growing problem of vacant and abandoned properties stemming from the foreclosure crisis) (if link expires, try here).

From the U.S. Conference of Mayors, see:

• Vacant and Abandoned Properties: Survey and Best Practices (42 page report),
• Press Release: Foreclosure Crisis Adds to Existing Vacant and Abandoned Property Problems in Cities (go here for Spanish version),

Go here for other posts on code violation problem when homes in foreclosure are abandoned by the owner and the foreclosing lender either fails to complete foreclosure or fails to record its deed after foreclosure sale. responsibility code violations foreclosure

"Money Store" Scam Victims Also To Blame, Defense Attorney Says; Indecipherable HUD-1s Understandable Only By A Mathematician, Counters Judge

In addition to the news of the recent federal indictment in Maryland of eight defendants in the Metropolitan Money Store alleged equity stripping, foreclosure rescue scam, a story of a Federal court hearing that took place this past Friday in a separate, class action civil lawsuit involving the now-defunct company was recently reported by WTOP Radio 103.5 FM (Washington, D.C.). The following excerpt caught my eye:

• In federal court on Friday, an attorney for one of the title companies named in the civil suit told Judge Roger Titus that the victims were guilty of contributory negligence -- that they in essence, were also to blame. This infuriated Angele Reid of Oxon Hill, who sat in on the motions hearing.

• "I was really ready to strangle him," Reid said. "Because if you look at the documents, even a real estate attorney would have difficulty figuring out that something was going wrong." Federal Judge Roger Titus seemed to agree, pointing out that the federal forms known as HUD-1's were indecipherable. At one point Titus said only a mathematician could understand them.

For the story, see Homeowners fight foreclosure fraud with class action.

Go here and go here for other posts on the alleged Metropolitan Money Store foreclosure rescue scam.

Postscript:

Were JoyJackson and Kurt Fordham doing business in North Carolina when they were arrested? Regading their June 12 arrest in Raleigh, North Carolina, a recent story in The Charlotte Post reports:

• A source from Maryland, wishing to remain anonymous, said Jackson and Fordham relocated to North Carolina in order to conduct business [t]here. The U.S. Attorney’s Office in Maryland would not confirm details, citing the ongoing case.

For this story, see Mortgage hucksters busted in Raleigh (no longer available online). joyjackson

Colorado Judge Jams Foreclosure Attempt Due To Lender's Failure To Prove "Legal Standing"; Company Official Found Not Credible

In Douglas County, Colorado, the Douglas County News Press reports on local couple Louis and Margaret Sadler, who are assiting their daughter fight a foreclosure action that threatens the loss of her home.

• The [...] couple, who hired Castle Rock attorney Michael Robinson to handle the routine foreclosure, saw a Douglas County district court judge on June 19 put a stop to the foreclosure sale when the lender could not prove it was a party of interest in the case.

• The lender's failure to prove its interest is part of an industry practice Robinson says could impact victims of foreclosure across the state. "This is a case of first impression in Colorado," Robinson said. "This is going to wake people up and make them realize 'I don't have to take this, I can fight back.'" The fight began when Robinson embarked on his research in the time he had to respond to the original foreclosure action. His search of the publicly-filed documents disclosed something was amiss.

***

• During the June 19 trial, Lorainna Diaz, the chief of mortgage litigation for Countrywide Home Loans, was unable to identify the person whose stamped signature endorsed the note or when the note was endorsed to the Bank of New York. Diaz testified by phone from the company's Fort Worth, Texas, office but her efforts did not pay off for the Bank of New York. "I don't find [Diaz] to be credible at all," said Douglas County district court Judge Vincent White when he found in Sadler's favor. "She couldn't establish when [the transfer] occurred or that it was legitimate. I would expect someone in her position to be able to say when it was transferred and how [Sadler] was noticed."

***

• For those who find themselves in similar situations in Colorado, White's decision could open the door to great possibilities, Robinson said. "So far the problem has been that everybody surrenders [in the face of foreclosure]," Robinson said. "The message here is that people aren't going to roll over, they're going to fight."

• Robinson and his co-counsel hope others join the fight and have built a Web site, www.blockcoloradoforeclosure.com, to provide a resource for those facing foreclosure in Colorado.

In dismissing the court order authorizing the foreclosure sale, the judge indicated that the lender can re-file the case if they want, presumably if it is able to get its paperwork straight.

For the whole story, see The foreclosure fight is on (no longer available online).

See also, Fighting back on foreclosures:

• [A]ttorneys Michael Robinson and William Henry took a big step forward in that fight June 19 after a Douglas County judge dismissed a foreclosure action filed against Margaret Sadler, of Larkspur.

For other posts that reference the failure of some mortgage lenders and their attorneys to file the required loan documents when starting foreclosures, Go Here, Go Here, Go Here and Go Here. missing mortgage foreclosure docs beta

Maryland Man Charged With Pocketing Proceeds Of Forged Mortgage Loan On Ex-Landlady's Home; Property Now Faces Foreclosure

In St. Mary's County, Maryland, Southern Maryland News reports:

• A judge jailed a Park Hall man this week in lieu of $54,000 bond after the suspect’s arrest by police alleging he stole that amount through a loan application with the forged signature of his former landlady. St. Mary’s grand jurors indicted Mack Arthur Jennings, 51, on charges of uttering a counterfeit deed of trust in 2004 and stealing the money from Barbara Ann Sparks, who learned two months ago that she faces a possible foreclosure on her house and land off Indian Bridge Road in California[, Maryland].

• Sparks, a 56-year-old cancer patient, hired an attorney who successfully staved off a foreclosure hearing scheduled for last month, but future court proceedings lie ahead, her daughter said Thursday.

***

• ‘‘He went to the bank and got the loan,” detective Lt. Rick Burris said Thursday, ‘‘under the guise that the owner of the property was going to co-sign for him. He forged the signature.” The offense was not discovered, the lieutenant said, as long as Jennings paid off the loan. Sparks learned her property was the collateral when those payments ended. ‘‘She didn’t know anything about the loan until he stopped making payments and she started getting foreclosure notices,” Burris said.

For more, see Man, 51, jailed in bank fraud probe (Suspect’s alleged forgery for loan could cost ex-landlady her house).

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

Central Pennsylvania Attorney Groups To Mobilize Effort To Defend Poor In Mortgage, Debt Collection Suits

In Blair County, Pennsylvania, the Altoona Mirror reports:

• The Blair County Bar Association, an organization comprised of 200-plus lawyers, is teaming up with MidPenn Legal Services to address a surge in mortgage and credit card defaults. The economic woes affecting many parts of the nation have crept into the county court system in the form of lawsuits with banks and mortgage companies suing those who owe them money. The deluge of new cases has alarmed court officials, and the organization that represents county lawyers is putting together a new program to provide free and low-cost legal services to residents in crisis.

***

• Attorney Jeff Fleming, president of the bar association, and his board of governors voted to work with MidPenn, which provides aid to the poor, in obtaining a $9,800 grant from a fund known as Interest on Lawyers Trust Accounts. The state Supreme Court established the fund from interest earned by lawyers on escrow accounts, and the money is used to assist legal services statewide. The fund provides money for training attorneys and special programs.

***

• Under the new program, Mid-Penn will select the cases and assign them to attorneys who volunteer to work with the poor. Mid-Penn will train the lawyers so they know the laws concerning mortgages and other lending practices. Attorneys will be expected to handle one case for free but in subsequent cases will be paid $30 an hour.

For more, see Lawyers team up to tackle defaults (Legal action on mortgages, credit cards skyrocketing).

NY Foreclosure Legislation Expected To Pass Today; Will Establish Court Supervised Mediation Conference; Proposed 1-Year Foreclosure Moratorium Dumped

In New York, The New York Times reports:

• The bill that Gov. David A. Paterson and leaders of the State Legislature announced last week to address the subprime lending and foreclosure crisis was, for Albany, that rarest of things — an effective compromise. The legislation will change how subprime loans are made and regulated and will alter the way many foreclosures are handled by the courts, establishing protections for homeowners that had not been in place.

***

• Two of the main provisions are firsts for New York State: One requires lenders to warn borrowers in writing at least 90 days before starting foreclosure proceedings, and the other requires the courts to hold a settlement conference between the lender and a subprime borrower facing foreclosure. Both provisions are aimed at bringing lenders and borrowers together before foreclosure becomes inevitable. Supporters say the measures increase the chances of settlements that modify the terms of the loans, prevent foreclosures and allow homeowners to stay in their homes.

For more, see In Confronting the Foreclosure Crisis, a Bill Strikes a Balance.

For a formal description of a statewide program announced last week by the New York Court of Appeals intended to educate homeowners and facilitate early foreclosure negotiations and settlements, see Residential Mortgage Foreclosures: Promoting Early Court Intervention.