FDIC Engaged In Subprime Lending After Bank Seizure, Then Unloaded Bad Loans On Another, Says Lawsuit

The Wall Street Journal reports:

• Federal officials heap much of the blame for the subprime mortgage mess on lenders, claiming they recklessly made too many high-cost home loans to borrowers who couldn't afford them.

• It turns out that the U.S. government itself was one of the lenders giving out high-interest, subprime mortgages, some of them predatory, according to government documents filed in federal court. The unusual situation, which is still bedeviling bank regulators, stems from the 2001 seizure by federal officials of Superior Bank FSB, then a national subprime lender based in Hinsdale, Ill.

• Rather than immediately shuttering or selling Superior, as it normally does with failed banks, the Federal Deposit Insurance Corp. continued to run the bank's subprime-mortgage business for months as it looked for a buyer. With FDIC people supervising day-to-day operations, Superior funded more than 6,700 new subprime loans worth more than $550 million, according to federal mortgage data. [...] Hundreds of borrowers who took out Superior subprime loans on the FDIC's watch -- some with initial interest rates higher than 12% -- have lost their homes to foreclosure, data on the loans indicate.

***

• The Superior situation could be costly for the FDIC. Texas-based Beal Bank SSB, which bought a portfolio of Superior loans, about half of them originated under the FDIC, is suing the agency in U.S. District Court in Washington. The suit claims many of the loans were made improperly and are plagued with problems.

In the lawsuit, Beal Bank lays out its position against the FDIC in this court filing.

For more, see FDIC Faces Mortgage Mess After Running Failed Bank (Subprime Lender Made Problem Loans On Regulators' Watch) (if link expires, try here, then click link for story, then click to refresh web page if necessary.).

Postscript:

According to the story:

• An undated internal FDIC assessment that Beal Bank obtained and filed in court in June, the FDIC acknowledged "numerous appraisal deficiencies" in the portfolio it sold to Beal and discussed its legal vulnerability. Points of interest: Pages 8-11 summarize the final report of an outside expert; pages 16-18 discuss appraisal, fraud and other problems; pages 26-27 consider the FDIC's "poor" legal situation. The handwritten notes were in the version filed in court; it's unclear who added them;

• Another internal legal analysis shows the FDIC recognized problems with fraud in some loans sold to Beal.

Investigative Report: Crooked Mortgage Loan Originators Have A Field Day in Florida As State Regulators Snooze, Pass Licenses Out To Nearly Anyone

In Part 1 of a 3-part investigative report published yesterday on what can be described as the betrayal of Florida home loan borrowers by state regulators, The Miami Herald I-Team reports:

• [S]ince 2000, [Florida] regulators failed to weed out people with criminal histories, monitor scam operations and discipline crooked brokers, a Miami Herald investigation found.

• State regulators allowed thousands of ex-convicts to enter a profession that gave them access to the most sensitive and personal financial information: credit cards, bank accounts and Social Security numbers. Those criminals went on to commit nearly $85 million in mortgage fraud, the newspaper found. They stole their customers' identities. They stole their money. They even stole their homes.

***

• Beyond the licensing, regulators routinely overlooked or ignored complaints, allowing rogue brokers to flourish amid one of the biggest housing booms in state history. As the median home price reached an all-time record in Florida, and the Miami skyline erupted with gleaming new residential towers, fortune seekers rushed into the mortgage business in unprecedented numbers.

***

• Don Saxon, commissioner of the Office of Financial Regulation, said he didn't know why his staff issued licenses to bank robbers and racketeers, but would look into the cases cited by The Miami Herald. ''You're asking me to get into the heads of the people who made those choices,'' Saxon said. He added: "Certainly we are not proud of the fact that these people have gone on to do bad things.''

For more, see Borrowers Betrayed (During Florida's housing boom, state regulators allowed thousands of mortgage professionals with criminal records into the industry - costing consumers millions).

In related reports published as part of Part 1 of The Miami Herald investigative report, see:

• Ex-convicts active in mortgage fraud,
• Identity theft is no bar to keeping a broker license (Almost three years after he was arrested for arranging a fraudulent loan, a mortgage broker still had his state license),
• For license renewals in Florida, no criminal background checks (The state relies on mortgage brokers to report new crimes they commit. The result: Hundreds retained their licenses after violations),
• A criminal past, a trail of new victims (A convicted cocaine trafficker with a mortgage broker license ultimately admitted that he fleeced 30 customers out of $2.8 million),
• Who's Watching The Brokers,
• Miami Herald video interviews with elderly victims who were scammed of their home equity by rogue mortgage brokers.

SW Florida Real Estate Agent Battles Civil, Criminal Fraud Charges Involving Different Failed Real Estate Projects

In Lee County, Florida, The News Press reports:

• Daniels View was the crown jewel in rising real estate star Samir Cabrera’s ambitious group of investments in 2006, a chance for investors to get in on a hot land deal in Lee County. Two years later, investors are settling for pennies on the dollar and level allegations of fraud in a civil suit against Cabrera involving the 80-acre project along Daniels Parkway in south Fort Myers.

• The allegations in the civil suit bear striking similarities to those made last month in a federal indictment charging Cabrera with four counts of fraud involving two other properties along nearby Fiddlesticks Boulevard. Daniels View is also what’s driving Lee County commissioners to call for an investigation into whether County Manager Don Stilwell — Cabrera’s father-in-law and an investor — lied about his involvement in the project.

***

• According to court documents [in the criminal case], Cabrera bought two properties on Fiddlesticks Boulevard in south Fort Myers through one company, then sold the properties on the same day to another company he controlled. The indictment alleges Cabrera profited from the sales and didn't disclose to investors that he owned both companies. [...] Some investors in Daniels View tell a similar story, saying they did not know that property was flipped or that Cabrera controlled both companies.

For more, see Daniels View, crown jewel of properties, has yielded only tarnish.

See also:

1) Naples Daily News: More investments gone sour plague indicted real estate agent, which reports:

• While Fort Myers real estate agent Samir Cabrera was allegedly mismanaging two property investments along Fiddlesticks Boulevard in a way that would later lead to federal fraud charges, he also was attracting investors to launch a larger deal on the land next door. That deal was called Daniels View.

2) Naples Daily News: Stilwell had ties to third development by indicted son-in-law:

• [I]nitially, when asked last year about his financial stake in Daniels View — a project at the southwest corner of Daniels Parkway and Interstate 75 that lacked good road access — Stilwell said he had no involvement. [...] But after his son-in-law, Cabrera, was indicted in June on four counts of wire fraud involving two land deals along Fiddlesticks Boulevard, Stilwell provided more details.

3) Naples Daily News: Samir Cabrera case: Story of real estate ventures gone awry (The free-spending lifestyle of Samir Cabrera may have allowed his business partners to force a payout that ruined the chance for his real estate deals to succeed).

Another Brooklyn Trial Judge & His Aversion To Sloppy Paperwork From Foreclosing Mortgage Lenders

In a recent article in the National Law Journal, Brooklyn Supreme Court Justice Jack Battaglia, in connection with his approach to the apparent sloppy paperwork being filed by foreclosing lenders and their attorneys (and not unlike the approach taken by his colleague on the Brooklyn bench, Justice Arthur Schack), was described as expressing concerns over shortcuts being taken by them in their filings with the court. A review of three of his cases in which he denied foreclosure (with leave to renew in conformity with his decision) reveal a number of the problems Justice Battaglia found and that is apparently the cause for his concern:

1. resorting to the improper use of "nail & mail" method of service of process without first exercising due diligence in determining Defendants' whereabouts; no indication that the process server made any effort to determine defendants' business address in order to attempt personal service there at pursuant to CPLR 308(2) before resorting to ‘nail and mail’ service - mortgagee would be expected to have a business address for its mortgagor;
2. Affirmation of Merit and Amount Due was executed and notarized in outside New York State and not accompanied by a certificate of conformity;
3. the submission to the court included numerous documents that purportedly support the relief sought, but many of the documents are not identified by anyone with personal knowledge, and are not authenticated or otherwise rendered admissible as evidence - they are not incorporated in any affidavit or affirmation;
4. no proof of service of the notice of default;
5. non-military affidavits were based upon information obtained from an underage person,
6. affidavit executed by a person who is not an officer or employee of either Plaintiff or the original mortgagee, and who was, therefore, not qualified to testify as to the material facts upon which the action must proceed, particularly since the assignment purportedly giving
   Plaintiff ownership of the note and mortgage was not executed until after commencement of the action;
7. Affidavit of Merit made by an “attorney in fact” who does not assert personal knowledge or facts from which personal knowledge might be inferred,
8. court noted that a Limited Power of Attorney held by the alleged plaintiff did not confer testimonial competence;
9. no explanation for attempted service of Defendants at one location when the default letter was addressed to a different location,
10. notice of default from company who is neither the lender or mortgagee;
11. notice of default failed to identify the lender, the date of the note and mortgage, or even the property;
12. non-military affidavit executed as part of the affidavit of service of the summons and complaint was premature;
13. no evidence of compliance with the additional-mailing requirement of CPLR 3215(g)(3)(i);
14. in one case, the assignor under the Assignment of Mortgage was Mortgage Electronic Registration Systems, Inc., but there is no evidence of the assignor's ownership of the
    note and mortgage, or its right or power to make the assignment.

For more on the three cases, see:

1. New Century Mortgage Corporation v Trench, 03/28/2007, 2007 NYSlipOp 30653(U);
2. US Bank National Association v Lockridge, 11/27/2007, 2007 NYSlipOp 33886(U);
3. Wall Street Mortgage v Lorence, 03/19/2007, 2007 NYSlipOp 30224(U).

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 gamma SloppyForeclosuresAlpha

California Class Action Alleges City Intimidation, Harassment Of Minority Section 8 Tenants

In Antioch, California, The National Law Journal reports:

• The mortgage crisis has spawned an unusual federal class action by African-Americans in Antioch, Calif., a San Francisco suburb, alleging city intimidation and harassment of minorities who rent homes using federally subsidized Section 8 housing vouchers in an effort to force them out of the area.

***

• The real estate foreclosure crisis hit Antioch hard. In response, landlords and homeowners turned to renting homes to pay mortgages, often renting to tenants using federal rent subsidy vouchers, known as Section 8, according to [Brad] Seligman, [of The Impact Fund, a public interest law firm in Emeryville, Calif.].

• By 2006, the inability of homeowners to sell homes allowed Section 8 participants to use their benefits to move out of urban centers to the suburb 40 miles west of San Francisco and to larger homes that might otherwise sit vacant, according to the suit.

***

• The suit, brought by five African-American women who rent homes using Section 8 vouchers, alleges that the city and police focused attention on people renting homes using the vouchers. The women say police looking for Section 8 violations subjected residents to warrantless searches of their homes. Police allegedly made threats to landlords who continued to accept the vouchers and they also allegedly intimidated renters with potential loss of benefits.

For more, see Mortgage Crisis Spawns Class Action Alleging Harassment of Minorities.

To view the lawsuit, see Williams v. City of Antioch, No. C08-2301BZ (N.D. Calif.) (available online courtesy of The Impact Fund).

See also:

• San Francisco Chronicle: Blacks' suit accuses Antioch of discrimination,
• The Impact Fund: Press Release.

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

Bill Moyers Journal On The Destruction Of Cleveland's Slavic Village; Unregulated Proliferation Of Subprime Loans A Key Reason, Says County Official

A significant portion of the first segment of a program that ran last week on PBS' Bill Moyers Journal focused on the destruction of the Cleveland, Ohio neighborhood known as Slavic Village, which local officials attribute to the unregulated proliferation of subprime loans. Owners losing their homes, boarded up property, tenants forced out of their homes on short notice due to foreclosure evictions - losing their rented homes, prepaid rent & security deposits, and many of their personal possessions in the process, abandoned homes that are literally worth less than nothing (where demolition costs exceed the value of the dilapidated structure and the land it sits on), and reduced county population and tax base are among the effects the city is struggling with.
Go here on the Bill Moyers Journal website for the transcript and video of the program.

For a copy of the lawsuit brought by Cleveland, Ohio against 21 financial institutions in an attempt to hold them partially responsible for many of the problems the city is currently dealing with, see City of Cleveland v. Deutsche Bank Trust Company, et al. (available online courtesy of Bill Moyers Journal) (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).

For related stories that reference Cleveland's Slavic Village, see:

• The Washington Post: The Shadow of Debt (Slavic Village Is Fast Becoming a Ghost Town. It's Not Alone),
• National Public Radio: In Cleveland, Foreclosures Decimate Neighborhoods,
• The Cleveland Free Times: Stealing Home (Slavic Village Combats The Effects Of Foreclosures At The Street Level While Waiting For Solutions),
• WKYC-TV Channel 3 (Cleveland): Fear grips Slavic Village neighborhood after arson fires,
• Reuters: Some homes worth less than their copper pipes,

Go here, go here, and go here for other posts on vacant homes leaving their mark on neighborhoods. neighborhood destruction from foreclosures kappa

Miami-Dade Cops Make Major Bust In Alleged "Cash Back" Mortgage Fraud Scheme; Key Player Nabbed When Readying To Board Plane For Columbia

In Miami, Florida, WTVJ-TV Channel 6 reports:

• A special police task force organized to curb mortgage fraud arrested and charged about a dozen people on charges related to a major mortgage scam, police said. The Miami-Dade Mortgage Fraud Task Force arrested 17 people(1) in a $17 million enterprise. The Operation, known as “Operation: Life Is Good,” also arrested Monica Fergerson, who police said is a key player in the scam.

• Police said they arrested Ferguson just in time as she was about to board a plane to Colombia. She was charged with engaging in fraud to obtain cash back in closing without knowledge of the lenders, police said.

• Police said the scam, which involved 18 properties, had the seller closing with fake buyers, who work with mortgage companies that issue an illegitimate loan agreement for an inflated price.

For more, see Police Arrest 17 In Mortgage Fraud Raid (No Room For Probation, Police Say).

Postscript:

According to a press release from the Florida Attorney General's Office, on July 16, 2008, Fergusson, 37, has already pleaded guilty to conspiracy to commit racketeering, a first-degree felony punishable up to 30 years.(2)

(1) According to the Florida Attorney General's Office, among those in custody are: Mario Herrera, Deborah H. Herrera, Diana G. Diaz, Luis H. Garcia-Lopez, Mari Rodriguez-Triana, Raisa Diaz, Mario Jesus Lubian, Marlene M Norono, Sacha Rodriguez, Josephine Martinez, Andres Leiva-Medina, Danny A. Valdes, Lashinda Shawtrese Bois Moore, Fernando Boix-Lopez. They are facing charges of racketeering, conspiracy to commit racketeering, mortgage fraud, grand theft, identity theft and money laundering, according to the Florida AG.

(2) While Fergusson is the apparent winner of the "race to the prosecutor's office" by reportedly quickly copping a guilty plea, there is no word as to any possible slack they may give her should she squeal on her now-former alleged confederates in a successful prosecution.

Investigative Report Seeks Answers In Alleged "Land Patent" Foreclosure Rescue Scheme

In San Diego, California, the KGTV Channel 10 I-Team reports:

• The I-Team has been looking for Larry Smith for quite some time. When we found him, he refused to talk to us. But we know this confidence man has no problem talking to his victims. There are hundreds of them in Southern California. Victims like Mili Alto, who attended a Smith sales presentation in downtown San Diego. Mili said, "According to him and everybody this was the solution."

• Smith's solution is land patents; he claims these patents would prevent homeowners from losing their homes through foreclosure.

***

• Land patents cannot help distressed homeowners, experts said. "It is a false claim," said Steve Robinson from the Economic Crimes Division of the District Attorneys office. "... a fiction that has been made up by people to justify separating folks from their hard earned money," Robinson said. "The one thread you will see in all these scams is the promise to solve the foreclosure problem by taking money up front."

For more, see I-Team Pursues Man Suspected In Land Patent Scheme (read story) (watch video).

Upfront Fee Foreclosure Rescue Operator Evades Cops As Girlfriend, Two Associates Left Holding The Bag In Alleged Fraud Scheme

In Las Vegas, Nevada, the Las Vegas Sun reports:

• [Jeffery] Brown is among the first [foreclosure] consultants the [state] attorney general’s new mortgage fraud task force has charged. Investigators said Brown would sift through assessor records looking for people who had fallen behind in their mortgage payments and then contact them by mail.

***

• In March, about a dozen investigators from the attorney general’s office searched Brown’s high-rent Horizon Ridge Parkway offices. Brown wasn’t there. He had purchased a plane ticket to the Philippines and is believed to have boarded a flight shortly after the search. Airline ticket agents told investigators he appeared willing to pay almost anything to board the next flight.

***

• The search of Brown’s offices yielded a cache of information. Authorities say they uncovered a larger mortgage fraud scheme involving Brown and his girlfriend, Cindy Birkland, with whom Brown shared a Henderson home purchased for $1.8 million in 2005. The two are accused in a criminal complaint of lying on loan applications, forging documents to skim cash from loan deals and, along with two associates, Bryan Sears and Claudia Koziol, pocketing nearly $100,000 in phony construction loan proceeds.

• Brown remains at large. Birkland, Sears and Koziol face more than 30 charges of theft, forgery and racketeering and are out on bail.

For more, see If they want money to fight foreclosure, it may be scam (State attorney general targets fraudulent ‘consultants’).

Foreclosure Purchaser Unwittingly Buys Booby-Trapped Ex-Marijuana Grow House; Bomb Squad Called In To Diffuse Explosives

In St. Lucie County, Florida, WFLX-TV Channel 29 reports:

• An electrician makes an explosive find in the attic of a local home. The previous owner had left a booby trap. The people who bought the home got it in foreclosure. It was a fixer-upper, and they were having some work done on it. But they had no idea about the danger that remained: A bomb in the attic that could have gone off at any moment.

***

• An air conditioning contractor was working on the air ducts in the attic when he found the device and immediately dialed 911. "It's a booby trap," said St. Lucie County Lieutenant Larry Hostetler. Turns out, the home was a marijuana grow house shut down by the St. Lucie County Sheriff's office in 2006. The device had a trip wire attached to it and could have set the whole house on fire. Booby traps are used "to conceal evidence or injure law enforcement officers who are taking down the grow house," said Hostetler.

For more, see Bomb squad diffuses potentially explosive situation.

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

Unwitting Tenants Renting From Owner In Foreclosure Evicted While On Vacation; Lose $27K+ In Belongings Dumped On Front Lawn, Some Taken By Neighbors

In Clayton County, Georgia, The Atlanta Journal Constitution reports:

• A pair of Clayton County families were without a home and many of their belongings Friday, two days after the house they were renting was foreclosed while they were on vacation – their possessions removed, dumped on the front lawn and taken by neighbors. "It's a big mess," said Bridget Harris, one of the home's renters. "All I know is, I'm a tenant that was not negligent, and I paid my rent on time, and I have nothing."

• Harris said personal property worth more than $27,000, including three computers, a 52-inch television, a washing machine and dryer, clothes and personal information were taken. She said that she saw neighborhood children riding her sons' bicycles. "I had a lot of sentimental things, baby pictures, that were all over the yard; things I can't get back," she said.

For more, see Foreclosure mix-up puts tenants on curb (Families come home from vacation to find belongings strewn on lawn and stolen).

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

Four Charged For Allegedly Pocketing $900K From 4,000 People In NYC Rent Scam, Say Prosecutors

In New York City, Crain's New York Business reports:

• Prosecutors say four apartment brokers defrauded more than 4,000 people out of at least $900,000 by offering New York City apartments that didn't exist or were unavailable. The four were charged with scheme to defraud and acting as real estate brokers without licenses.

***

• Prosecutors say the defendants ran Innovative Apartments and Screening Services from December 2005 until May 2008. The defendants are accused of advertising nonexistent apartments online and charging clients $200 for background and credit checks that were never done. Prosecutors say the four ignored clients' demands for refunds or gave only partial repayments.(1)

Source: Four charged in alleged $900K NYC apartment rip-off.

Go here for the New York Attorney General press release on this bust.

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

(1) According to a press release issued by the NY AG's office, Innovative Apartments’ co-owners Nader Jaber and Igor Portnov a.k.a. Bobby Portnov, and employees Brooke Corio and Boris Portnov a.k.a Brian Portnov, were charged with Scheme to Defraud in the First Degree (a class “E” Felony) and Operating an Apartment Information Vendor without a license (an unclassified Misdemeanor). Further, the alleged scam was promoted on the internet site, Craigslist, according to the press release. unwitting tenant rent scam yacht

More On "Fake Landlord" Scams

The following links are to some recent stories on the "phony landlord" scam, in which a scam artist comandeers a vacant home - often a foreclosure (changes the locks, turns on utilities, gets rid of "for sale signs", etc.), advertises it for rent (ie. Craigslist, newspaper, etc.), and reels in an unwitting tenant, pocketing as much in upfront rent and security deposits as possible before taking off for parts unknown:

• Scammers using foreclosures to take advantage of would-be renters,
• Fake landlords rent vacant Cleveland houses, then vanish,
• Foreclosure Rental Scam Strikes Bay Area (video only).

Go here and go here for more on tenant victims of phony landlords. unwitting tenant rent scam yacht

Protest Seeks To Block Countrywide From Booting Elderly Disabled Woman From Home Of 45 Years

In Detroit, Michigan, WWJ Newsradio 950 reports:

• Dozens of people gathered at the home of an elderly disabled woman to protest the foreclosure of her home in Detroit. Organizers say 72-year old Rubie Curl-Pinkins is one of the latest horror stories in the foreclosure crisis that is devastating Metro Detroit.

• According to Oak Park City Councilwoman, Angela Diggs Jackson who helped organize the protest, Countrywide and their law firm, Trott & Trott, have decided to evict Curl-Pinkins from her home of 45 years, rather than accept full payment through a reverse mortgage.

• Diggs Jackson says Curl-Pinkins is suffering from numerous physical disabilities. Her doctor has stated that being evicted from her home could have a devastating effect on her health. Her daughter, who also lives in the home on Holden Street, is also disabled, suffering from congestive heart failure and on oxygen to help her breathe.

• Vanessa Fluker, attorney for Curl-Pinkins, says she was able to get an emergency extension to allow her client to stay in the home until July 25th. Countrywide Home Loans has yet to comment on Curl-Pinkins case and the local law firm representing Countrywide, Trott and Trott said they could not comment.

Source: Protest Over Elderly Woman Losing Home.

See also:

• Local Woman, Friends Protest Eviction (read story) (watch video).
• Moratorium struggle builds, activists plan to stop eviction. countrywide consumer problems

Phony Attorney Pockets $150K+ Home Sale Proceeds; Fails To Pay Off Existing Mortgage, Leaving Owner In Foreclosure

In Staten Island, New York, the Staten Island Advance reports:

• The son of a retired judge is accused of pretending to be an attorney in order to sell a woman's home, then keeping the money for himself. Police say Renauld Gregg, 29, the son of retired administrative law judge Ronald Gregg, played the role of an attorney well enough to close the sale of an acquaintance's Stapleton home -- then kept the $156,877 and left his victim in foreclosure.

***

• He was successful with the sale, police say, but didn't use the $156,877 in proceeds to pay off Ms. White's mortgage, instead keeping the cash for himself. Ms. [Robina] White discovered her home had been sold when she received a notice of foreclosure, said [District Attorney Daniel] Donovan's spokesman, William Smith. The lender stopped foreclosure proceedings after learning Ms. White was the victim of a crime.

• Gregg was arraigned [Thursday] on charges of second-degree grand larceny, unauthorized practice of a profession and resisting arrest. The most serious charge carries up to 15 years in prison for a conviction at trial.

For more, see Will Imposter Attorney Defend Himself? (Judge's son held in fraud; cops say he sold restaurateur's home, then kept the money).

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

NBC Nightly News On Evictions Of Foreclosed Homeowners

In Prince William County, Virginia, the NBC Nightly News ran a story earlier this week in which they accompanied a local deputy sheriff conducting an eviction of a homeowner who had recently lost his home in foreclosure.

For the story, see When the deputies come (video only)

For a related story on Florida deputies carrying out evictions after foreclosure, see Deputies delivering eviction notices sometimes find job hard to deal with.

Go here for other posts on Police involvement in foreclosures. SheriffDeputiesForeclosureAlpha

Increased Caseload Of Abandoned Homes Leaves Code Enforcement, Cops With Hands Full

The following links are to stories describing the beating being taken by code enforcement officials and other municipal workers around the country as they grapple with unattended homes abandoned by their owners:

• Clark County, Indiana: Clark County municipalities spending more on grass cutting because of foreclosures, officials say,
• Frederick County, Maryland: Fire marshal to handle overgrown lawn complaints,
• Nashville, Tennessee: Foreclosures Cost Cities, Neighbors.
• New Britain, Connecticut: Enforcement fails at South Main homes,
• Northwest Arkansas: Foreclosed Homes A Problem For City,
• Central Florida: Code Enforcement Works To Clean Up Foreclosed Properties (Neighbors Complain Of Eyesore Homes),
• Florida Treasure Coast: Record home foreclosures mean more code violations on Treasure Coast,
• Northern Virginia: Front Royal to tackle overgrown lawns,
• Riverside County, California: Squatters, illegal dumping, dying yards (Dealing with foreclosed homes means a shift in duties in Lake Elsinore),
• San Diego, California: City targets owners of neglected properties,
• South Elgin, Illinois: South Elgin targets neglected vacant homes,
• Sterling Heights, Michigan: Sterling intensifies focus on neglected foreclosed homes.

Go here, go here, and go here for other posts on vacant homes leaving their mark on neighborhoods. neighborhood destruction from foreclosures kappa

Two Inch Fish "An Awesome Ally" In Battle Against "Green Pools"; Dwindling Supply Has One County Concerned

In Orange County, California, ABC News reports:

• [A]s the foreclosure crisis deepens by the day, an unsightly and potentially deadly consequence of homes without owners are neglected swimming pools. An abandoned pool can become contaminated with algae within two weeks. Shortly after that, the mosquitoes follow … in the millions. It's a mess far too pervasive to stave off without daily work with a skimmer and a dash of chlorine.

• It's times like these that neighbors and homeowner associations turn to a 2-inch fish with a big appetite. Gambusia affinis, more commonly known as mosquito fish, have been used in this way since the 1920s. They are released into green pools in small batches of about 100, and they breed and eat hundreds of mosquito larvae a day. "These fish are an awesome ally," said Jon Miller a 22-year veteran technician at the Orange County Vector Control District. "I've had to treat over 200 pools in the last three months and with these [fish] I don't need to come back."

For more, see Mosquitoes, Fish, Pools and Foreclosure (What Do These Four Have in Common? More Than You Might Think) (Go here for entire story on one web page).

Regarding the growing shortage of these mosquito fish, see North County Times: Too many pools and too few fish; that bugs county vector control:

• Facing a record number of slimy swimming pools behind foreclosed homes and a shortage of the fish used to prevent the mosquito colonies that inhabit them, the [San Diego] county employees who combat disease-carrying pests have their work cut out for them. Their challenges come amid concerns that the mosquito-borne West Nile virus is unusually active in the county this year.

"Billy Bob The Goat" Seeks New Home As Owner Loses Farm To Foreclosure

In Woodbury, Minnesota, the Minneapolis Star Tribune reports:

• Until recently, Billy Bob led a comfortable life with a loving family on a farm in rural Minnesota. Then his family lost its farm in the foreclosure mess that's sweeping the nation. Reluctantly, they sent their pet goat packing.

• Today Billy Bob's life has truly gone to the dogs. The 5-year-old lives next to several canines in a kennel at an animal shelter in Woodbury. "They said he's like a dog with horns," said Stacy Arvidson, manager of the Woodbury animal shelter.

• Animal Humane Society officials said Billy Bob is the latest casualty of the economic downturn that's not only hurting humans but also leaving thousands of dogs, cats, birds and farm animals across the nation and the Upper Midwest without homes.

***

• In recent months the society has been getting more inquiries from hobby farm owners who are facing foreclosure or other economic hardships. Many can no longer afford to feed their horses or donkeys. Unlike Billy Bob the goat or the occasional city-bred pet chicken, those animals are too large for most shelters, [Animal Humane Society's Cindy] Johnson said, so their owners are steered to rescue groups such as the Minnesota Hooved Animal Rescue Foundation in Zimmerman.

For more, see Billy Bob the goat is feeling a little gruff: He's homeless.

For other posts on foreclosure pets, go here, go here and go here. ForeclosurePetsAlpha

Foreclosure Defense Causing Some South Florida Attorneys To Refocus Practices To Meet Increasing Demand?

In South Florida, The Miami Herald reports:

• As foreclosures continue to mount, borrowers who have run out of options are turning to attorneys to fight back -- and they're living mortgage-free for months in the process. Although the chances of ultimately keeping a foreclosed home are slim, for $1,500 to $3,000 some lawyers are offering to defend borrowers in court, causing the wheels of justice to turn more slowly. Duking it out can add months and sometimes years to a foreclosure process that in Florida already takes an average of seven months to complete.

***

• Foreclosure defense is proving popular enough that some South Florida bankruptcy and real estate lawyers said they were refocusing their practices to meet the growing demand.

***

• While a foreclosure may seem straightforward -- a borrower doesn't pay and the bank takes back the home -- lawyers say there are numerous ways to fight. One way is forcing the lender to prove it owns the debt behind the mortgage by producing a promissory note. A mortgage is a security instrument pledging property as collateral for a loan if a borrower defaults, but it is not the promissory note itself. As mortgages were bought, bundled and sold off to investors, notes got lost in the shuffle, landing in vaults or warehouses around the country. Physically retrieving them can be difficult and sometimes impossible.

***

• Some lawyers also ask lenders to produce all the documents in a loan file, transcripts of phone conversations with the borrower and copies of written correspondence, which can take up to a year or more to compile. Several businesses are involved, and some may have gone out of business.

For more, see Foreclosure defense buys homeowners time (Homeowners facing foreclosure are hiring lawyers to defend them in court against their lenders, during which time they can stay in their homes without paying a cent) (if link expires, try here).

In a related story, see "Florida Attorneys Saving Homes" Sets Up Hotline To Place Homeowners Struggling With House Payments With Free Lawyers.

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 gamma

California AG Alleges "Shocking New Details" Of Countrywide Lending Practices In Amended Lawsuit Against Lender

From the Office of the California Attorney General:

• California Attorney General Edmund G. Brown Jr. [yesterday] disclosed “shocking new details” about Countrywide Financial’s deceptive business practices which included ignoring their own underwriting guidelines and rewarding employees for selling risky home loans. "These shocking new details provide further evidence of Countrywide's dangerous lending practices, which included ignoring borrowers' low credit scores and rewarding employees for selling risky loans," Attorney General Brown said. "In one case the company approved an adjustable rate mortgage to an 85-year-old disabled veteran with such a low credit score and high debt that he defaulted in less than six months."

• On June 20, 2008 Attorney General Brown sued Countrywide for engaging in deceptive advertising and unfair competition by pushing homeowners into risky loans for the sole purpose of reselling the mortgages on the secondary market. [Yesterday] Brown filed an amended lawsuit in Los Angeles Superior Court which reveals twenty new details about the company's scheme to deceive consumers into taking out dangerous mortgages. The information had been previously withheld from the complaint.

For more, see:

• California AG press release: Atty. Gen. Brown Discloses New Evidence Of Countrywide's Deceptive Practices,
• Amended Lawsuit: People v. Countrywide Financial Corp., et al.,
• Countrywide Lawsuit Frequently Asked Questions: (English) (Spanish).

For a story in The Wall Street Journal on the California AG's amended lawsuit, see Countrywide Filing Shines Light on Loans (may require subscription; if no subscription, try here - then click link for story, then refresh page if necessary).

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

Colorado Attorney Succeeds Again In Getting Another Foreclosure Action Thrown Out As Lender Fails To Establish Legal Standing To Sue

In Douglas County, Colorado, Centennial Citizen reports:

• [Dewey] Gibbs and his wife of 31 years were on the verge of losing their home to foreclosure when he read about a couple who successfully fought a foreclosure in Douglas County District Court. He decided to pick up the phone, figuring, “What have we got to lose?” [...] The phone call was to Castle Rock attorney Michael Robinson, who successfully argued a case for a Larkspur woman in a similar situation. [...] In Robinson’s eyes, Dewey and Diane Gibbs faced a similar situation.

***

• On July 9, Douglas County District Court Judge Nancy Hopf found in the Gibbs’ favor in a Rule 120 hearing, a standard hearing designed to give the borrower his or her day in court. Her reason? Deutsche Bank could not prove its interest in the house. “[Deutsche Bank] has failed to show that it is the real party in interest in this matter,” according to Hopf’s order of dismissal. “Only the real party in interest may bring an action such as this Rule 120 action.”

• On the day the Gibbs walked out victorious, 20 other Rule 120 cases went unheard because the borrowers did not respond to the foreclosure notice, Robinson said. "People just give up,” he said. “And they really don’t have to.”

• Robinson has three similar cases in the works and had to turn away a handful of people who called after reading about the Sadler case. Their phone calls came after the Rule 120 hearing date expired, by which time it was too late to file a response, he said. “There’s this little window of opportunity once you get a Rule 120 notice,” Robinson said.

For more, including how the Gibbs reportedly reached an agreement on their mortgage with Option One by sending the lender $3,035 on June 24 in an effort to save their home, only to receive a notice of foreclosure the next day in connection with the same mortgage from Deutsche Bank saying it had, on June 16, begun foreclosure proceedings against their home, see No more ‘grasping at straws’ for couple.

For the post on the earlier Douglas County foreclosure action that was successfully thrown out of court, see Colorado Judge Jams Foreclosure Attempt Due To Lender's Failure To Prove "Legal Standing"; Company Official Found Not Credible.

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 gamma

One More Suspect Added To List Of Defendants In Alleged Metropolitan Money Store Foreclosure Rescue Scam

In Greenbelt, Maryland, The Associated Press reports:

• A ninth person has been charged in what prosecutors describe as a $35 million dollar scheme to defraud homeowners facing foreclosure. Thirty-six-year-old Richard Allison of Camp Springs has been charged with conspiracy to commit mail and wire fraud. Federal prosecutors say Allison was part of the Metropolitan Money Store scam. He provided legal services to JoyJackson, president of the Lanham-based business, and others prosecutors say were part of the conspiracy. [...] Allison is accused of acting as a straw buyer on two properties and creating loan documents with false financial and personal information.

For the story, see 9th person charged in Money Store scam.

See also, U.S. Attorney's Press Release: Additional Defendant Charged in Metropolitan Money Store Mortgage Fraud Scheme.

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

New Hampshire Couple Entangled In Alleged Foreclosure Rescue, Sale Leaseback Scam

In Sandwich, New Hampshire, New Hampshire Public Radio reports:

• Irwin and Inger Young are fighting to save their home. The family is just one of thousands to struggle with the mortgage foreclosure crisis. But the couple isn’t in this position because they lived in a house they couldn’t afford. They were- allegedly- victims of a home mortgage rescue scheme.

***

• [T]he Young’s lawyer, Elliot Berry says his office- New Hampshire Legal Assistance- has received a number of complaints against [Houston Finance and Leasing, the Manchester foreclosure rescue operator reportedly involved].

For more, see Sandwich Couple Allegedly Swindled Out of their Home.

Nebraska Law Regulating Foreclosure Rescue Transactions With Financially Strapped Homeowners Goes Into Effect

In Lincoln, Nebraska, The Associated Press reports:

• Dozens of laws passed by the Nebraska Legislature this spring go into effect [today].

• [One] law is designed to protect desperate homeowners facing foreclosure from so-called foreclosure consultants. Some of the consultants reportedly have encouraged people who get foreclosure notices to sign over their homes.

Source: Dozens of new laws to go into effect on Friday.

Go here for the Nebraska Foreclosure Protection Act.

NFL's Patriots, Fed To Host Foreclosure Prevention Workshop At Gillette Stadium

In Boston, Massachusetts, WCVB-TV Channel 5 reports:

• The New England Patriots Charitable Foundation and the Federal Reserve Bank of Boston will host a foreclosure prevention workshop at Gillette Stadium in August. The free workshop will be held on Tuesday, Aug. 12, from 1 p.m. to 8 p.m. The event is an opportunity for homeowners who are in financial distress or concerned about foreclosure to sit down with their lender face-to-face and avoid foreclosure, if possible.

• "We host many events at Gillette Stadium, but this one is especially meaningful," said Robert Kraft, chairman and CEO of The Kraft Group. "Many New Englanders are struggling with mortgage difficulties. We hope this workshop will help homeowners resolve issues and remain in their homes. We're happy to support this event and provide Gillette Stadium as the venue."

For more, including the list of usual suspects from the mortgage lending & servicing "rackets" expected to attend, see Gillette To Host Foreclosure Workshop (Event Free, Open To Public).

Judge Orders Mediation With DC Homeowners Snagged In Alleged Metropolitan Money Store Foreclosure Rescue Scam

In Washington, D.C., The Washington Post reports:

• A D.C. Superior Court judge ordered prosecutors and mortgage lenders yesterday to begin mediation with District residents who were among 400 Washington area homeowners caught in an alleged mortgage scheme operated by a Prince George's County company.

***

• D.C. Superior Court Judge Joan Zeldon ordered the District's prosecutors and the 13 attorneys representing various mortgage lenders to enter into mediation with owners of 25 D.C. homes and 20 area residents who became straw buyers in the scheme. The mediation is designed to quickly return houses to the original owners.

• Prosecutors said Metropolitan [Money Store] never paid the agreed-upon mortgages and left the houses, some of which have since gone into foreclosure, with the straw buyers. Seven of the straw buyers who attended yesterday's hearing agreed with the judge's decision. District prosecutors have said that once the houses are returned to the owners, they will not pursue charges against the straw buyers.

For more, see Mediation Is Next To Save Homes (Houses Went to Straw Buyers).

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

Brooklyn Trial Judge Nixes "Rubber Stamp Method" Of Adjudicating Foreclosures; Lenders, Lawyers Lacking Legal Standing To Bring Actions Get Bounced

In a recent article in the National Law Journal, Brooklyn Supreme Court Justice Arthur M. Schack, in connection with his approach to the apparent sloppy paperwork being filed by foreclosing lenders and their attorneys, was quoted as follows:

• "I deny more foreclosures than I approve," [...]. "I want to see the servicing agent's power of attorney, I want to see all the paperwork before I approve it. If the paperwork is garbage, I deny it. If you're going to take away someone's home, it should be done properly."

After a review of some of his foreclosure cases, it appears that he wasn't kidding. Certainly, he has opted against using the ever-popular "rubber stamp method" of adjudicating foreclosures that many of his judicial colleagues around the country have found so handy when in a hurry to clear their respective caseloads.

Further, in most of the cases listed below, the homeowner facing foreclosure either was not represented by an attorney, or didn't bother to show up to court at all. Inspite of this, Justice Schack took out his fine tooth comb anyway, went through all the documents, and asked a lot of questions that the lenders were going to have a tough time answering.

Among the issues Justice Schack points to in some of his decisions when denying a foreclosure because the alleged plaintiff did not have legal standing to file the action are:

1. defective powers of attorney,
2. faulty affidavits,
3. failure to file pooling and servicing agreements with the court,
4. conflicts of interest of individuals signing assignments, affidavits, etc. as officers for various mortgage companies,
5. defective verified complaint,
6. assignments of the mortgages being foreclosed subsequent to the commencement of the foreclosure action,
7. failure to record corporate resolution, and
8. no evidence of alleged assignments.

He has also shown no reluctance in admonishing lenders' attorneys by giving terse warnings of sanctions for filing actions that may be frivolous, in that, by filing foreclosure actions for companies that lacked standing to sue, the actions appear to be a waste of judicial resources, typically discussing the Part 130 Rules of New York law, which give the courts a remedy to deal with frivolous conduct.

In rendering these decisions, he gives this reminder to the lenders and their attorneys of the requirement that if they don't have legal standing to sue, they have no business bringing the foreclosure actions and wasting judicial resources:

• The Court of Appeals (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d, 901, 812 [2003]), cert denied 540 US 1017 [2003]) held that "[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress." In Carper v Nussbaum, 36 AD3d 176, 181 (2d Dept 2006), the Court held that "[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant's request." If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1d Dept 2002]). "Sine [sic] standing is jurisdictional and goes to a court's authority to resolve litigation [the court] can raise this matter sua sponte." (Axelrod v New York State Teachers' Retirement System, 154 AD2D 827, 828 [3d Dept 1989]).

HSBC Bank USA, N.A. v Yeasmin, 5/02/2008, 2008 NYSlipOp 50924(U) [19 Misc 3d 1127(A)]; Decided May 2, 2008.

***

In Ameriquest Mtge. Co. v Basevich, 6/26/2007, 16 Misc 3d 1104(A), 2007 NYSlipOp 51262(U), (among other cases), Justice Schack writes:

• Professor David Siegel, in NY Prac, § 136, at 232 [4th ed] instructs that: [i]t is the law's policy to allow only an aggrieved person to bring a lawsuit . . . A want of "standing to sue," in other words, is just another way of saying that this particular plaintiff is not involved in a genuine controversy, and a simple syllogism takes us from there to a "jurisdictional" dismissal: (1) the courts have jurisdiction only over controversies; (2) a plaintiff found to lack "standing" is not involved in a controversy; and (3) the courts therefore have no jurisdiction of the case when such a plaintiff purports to bring it."(1)

The following is a compilation of links of some of Justice Schack's decisions over the last year and a half or so in which he has denied foreclosure because of the questionable and/or faulty paperwork submitted in a foreclosure action that led him to the conclusion that the alleged plaintiffs in the following foreclosure actions did not have legal standing to bring suit:

1. American Brokers Conduit v Zamalloa, 9/11/2007, 2007 NYSlipOp 32806(U);


2. Ameriquest Mtge. Co. v Basevich, 6/26/2007, 16 Misc 3d 1104(A), 2007 NYSlipOp 51262(U);


3. Aurora Loan Servs., LLC v Sattar, 10/09/2007, 17 Misc 3d 1109(A), 2007 NYSlipOp 51895(U);


4. Bank of New York v Mulligan, 6/03/2008, 2008 NYSlipOp 31501(U);


5. Bank of New York v Orosco, 11/19/2007, 2007 NYSlipOp 33818(U);


6. Countywide Home Loans, Inc. for the Benefit of DB Structured Products, Inc. v Persaud, 01/15/2008, 2008 NYSlipOp 30076(U);


7. Deutsche Bank Natl. Trust Co. v Castellanos, 5/11/2007, 15 Misc 3d 1134 (A), 2007 NYSlipOp 50978(U);


8. Deutsche Bank Natl. Trust Co. v Castellanos, 1/14/2008, 18 Misc 3d 1115(A), 2008 NYSlipOp 50033(U);


9. Deutsche Bank Natl. Trust Co. v Clouden, 9/18/2007, 16 Misc 3d 1140(A), 2007 NYSlipOp 51767(U);


10. Deutsche Bank Natl. Trust Co. v Maraj, 1/31/2008, 18 Misc 3d 1123(A), 2008 NYSlipOp 50176(U);


11. EMC Mtge. Corp. v Batista, 6/05/2007, 15 Misc 3d 1143(A), 2007 NYSlipOp 51133(U);


12. Fremont Inv. & Loan v McBean, 11/26/2007, 17 Misc 3d 1132(A), 2007 NYSlipOp 52229(U);


13. GE Capital Mtge. Servs., Inc. v Powell, 11/13/2007, 18 Misc 3d 228, 2007 NYSlipOp 27463;


14. HSBC Bank USA v Perboo, 7/11/2008, 2008 NYSlipOp 51385(U);


15. HSBC Bank USA, N.A. v Betts, 4/23/2008, 2008 NYSlipOp 31170(U);


16. HSBC Bank USA, N.A. v Charlevagne, 11/15/2007, 2007 NYSlipOp 33673(U);


17. HSBC Bank USA, N.A. v Cherry, 12/17/2007, 18 Misc 3d 1102(A), 2007 NYSlipOp 52378(U);


18. HSBC Bank USA, N.A. v Valentin, 1/30/2008, 18 Misc 3d 1123(A), 2008 NYSlipOp 50164(U);


19. HSBC Bank USA, N.A. v Yeasmin, 5/02/2008, 2008 NYSlipOp 50924(U);


20. NYCTL 2006-A Trust v Kin Kan Wong, 1/09/2008, 2008 NYSlipOp 30037(U);


21. NYCTL-1 Trust v Cruz, 6/07/2007, 15 Misc 3d 1144(A), 2007 NYSlipOp 51144(U);


22. NetBank v Vaughan, 6/13/2007, 15 Misc 3d 1147(A), 2007 NYSlipOp 51197(U);


23. Nomura Credit & Capital, Inc. v Washington, 4/30/2008, 2008 NYSlipOp 50883(U);


24. Perla v Real Prop. Solutions Corp., 4/28/2008, 2008 NYSlipOp 50846(U);


25. U.S. Bank National Association v Maynard, 11/26/2007, 2007 NYSlipOp 33766(U);


26. U.S. Bank National Association, Trustee v Grant, 11/09/2007, 2007 NYSlipOp 33631(U);


27. U.S. Bank Natl. Assn. v Bernard, 2/14/2008, 18 Misc 3d 1130(A), 2008 NYSlipOp 50247(U);


28. U.S. Bank v Videjus, 4/29/2008, 2008 NYSlipOp 50851(U);


29. Wells Fargo Bank, N.A. v Farmer, 2/04/2008, 18 Misc 3d 1124(A); 2008 NYSlipOp 50199(U);


30. Wells Fargo Bank, N.A. v Farmer, 6/05/2008, 2008 NYSlipOp 51133(U);


31. Wells Fargo Bank, N.A. v Guy, 5/01/2008, 2008 NYSlipOp 50916(U);


32. Wells Fargo Bank, Natl. Assn. v Reyes, 6/19/2008, 2008 NYSlipOp 51211(U).

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.

(1) If a court grants a foreclosure judgment in a case where it is subsequently determined that the plaintiff mortgage lender lacked standing (and accordingly, the court lacked jurisdiction over the case), does this mean that the foreclosure judgment is void? If so, does this mean that everything devolving from that judgment (ie. the subsequent foreclosure sale, and any subsequent private sales or other conveyances of the foreclosed property) is also void? Can anyone imagine the mess that may currently exist with defective real estate titles around the country that have a recent foreclosure in its chain of title where the court lacked jurisdiction because of mortgage lenders and their attorneys who were as sloppy as those described in the above list of cases? I can only imagine that this is an issue that title insurance underwriters and agents don't want anyone thinking or asking about. missing mortgage foreclosure docs beta missing mortgage foreclosure docs gamma SloppyForeclosuresAlpha

WaMu Temporarily Blocked From Booting Tenants In 17 Duplexes As Foreclosed Landlord Files 11th Hour Bankruptcy

In Grand Rapids, Michigan, The Grand Rapids Press reports:

• Call it a stay of eviction. Tenants expecting to be evicted from some foreclosed Northeast Side apartments as soon as today received a 30-day reprieve, according to the bank holding the mortgage. Washington Mutual Bank dropped its court plans Tuesday to claim properties once owned by Tom and Melody Jacobs and force eviction of tenants from apartments in the 900 block of Maybelle Street NE.

***

• "The borrower filed Chapter 7 bankruptcy, which stays all proceedings. For the tenants, it means they are not in danger of being evicted. At the minimum, there is a 30-day wait before anything can happen," said bank attorney Marshal Isaacs from his Troy office. Lawyers say the monthlong window is expected to extend to tenants in other of the Jacobses' foreclosed properties who recently were slapped with last-minute eviction notices at 903-911 Diamond Ave. NE and the Northfield Apartments at 1239-1245 Northfield St. NE.

For more, see Evictions on hold at foreclosed apartment units.

For an earlier post on this story, see Tenants In 17-Unit Complex Face Foreclosure Eviction; Offered $1,000 To Leave Or Face The Boot. equity skimming unwittingly digamma

As Code Enforcement Caseload Grows In One Upstate NY Municipality, Prosecutors Seek Foreclosed Owners' Help In Going After Lenders

In Lockport, New York, the Lockport Union Sun & Journal reports:

• A fresh batch of housing cases involving financially strapped property owners has emerged in Lockport City Court. [...] Nearly half the new cases involve property that is being taken by a lender or was deserted by an owner for lack of means to maintain it.

***

• [D]efendants claiming their mortgages were foreclosed must bring proof of that, so the city can see lender identities and contact information and start hitting them up for repair commitments. [...] Initially [local prosecutor Michael] Brooks took the prosecutorial stance that the owners of problem properties remain responsible for code violations even if they’ve been ousted by a foreclosing lender or don’t have the financial means to deal with them.

• Now Brooks is asking foreclosed owners’ help to secure justice from lenders, who arguably have some ownership interest in property even if they don’t possess the titles. He’s doing so at the direction of Mayor Michael Tucker, who objected strongly to the outcome of a recent case involving an impoverished owner and a reluctant bank.

For more, see HOUSING COURT: City is seeking lender information.

Go here for other posts on code violation problems associated with homes in legal limbo; when a foreclosing lender is reluctant to complete a foreclosure action or fails to record its deed after foreclosure sale to avoid getting clipped with housing fines. responsibility code violations foreclosure

Vacant Foreclosed Home Being Used As A Local Dump; Clean-Up Without Court Order Would Be Criminal Trespass, Says City

In Centennial, Colorado, CBS4 reports:

• People who live in one Centennial neighborhood are worried more piles of trash could end up in front of foreclosed homes as owners are evicted and banks take over after mortgages are defaulted. The front yard of one home has turned into a dump after the family moved out. [...] "People are coming through and using it as a dump now, there's more there now then there was to start with," said [...] another neighbor.

***

• As for the trash pile, Centennial's code enforcement spokesperson said Fidelity Bank now owns the property. The city said trespassing to clean it up would be a crime. [...] A judge would have to give approval for anyone else besides the bank to clean up the trash.

For the story, see Trash Piles Up Outside Foreclosed Centennial Home.

Orlando-Area HOA Refusing To Rent To Gays, Unmarried Couples?

In Orange County, Florida, WFTV Channel 9 reports:

• An East Orange County subdivision is facing a dilemma. Several residents say the Homeowner's Association at the Rybolt Reserve subdivision in Orange County is discriminating against renters. "The Homeowner's Association is totally out of control," said Suzane Musashe of Jander Property Management. Musashe leases homes for investors in Rybolts Reserve. She said the association is refusing to rent to gay couples or other adults who are not married.

For more, see HOA Won't Allow Homes To Be Rented To Homosexuals, Unmarried Couples (read story) (watch video).

No Bail For Brooklyn Developer Charged In Alleged NYC Condo Scam; Residents Continue Fighting Eviction

In Crown Heights, Brooklyn, the New York Daily News reports:

• A Brooklyn developer accused of swindling some 40 Crown Heights families out of millions was ordered held without bail Tuesday night after returning from his Israel hideout. Eliyahu Ezagui, 47, pocketed $15 million in mortgages on condos he sold to families living in two buildings he developed in the Brooklyn neighborhood. Authorities said it was the biggest local case of subprime mortgage fraud on record.

***

• Robert Tolchin, lawyer for 17 tenant families facing eviction, said litigation with mortgage lending banks and Ezagui is continuing in Brooklyn Civil Court. Numerous foreclosure notices have been served, but no tenants have been evicted.

For more, see No bail after fugitive developer busted, charged in massive condo scam.

For earlier media reports on this story, see:

• New York Daily News: Builder flees & 40 Hasidic families face eviction in Brooklyn swindle,
• The Jerusalem Post: Defrauded Crown Heights residents fight for their homes.

Countrywide Settles Case Accusing It Of Abusive Practices In Almost 300 Mortgage Loans Overseen By Pittsburgh Bankruptcy Court

In Pittsburgh, Pennsylvania, The New York Times reports:

• Countrywide Home Loans has agreed to pay $325,000 to the Chapter 13 bankruptcy trustee in Pittsburgh, settling a case that accused the lender of abusive practices in almost 300 mortgage loans overseen by the court.

• The settlement, which has been filed with the court and must be approved by the federal judge overseeing it, arose out of motions filed last October by Ronda J. Winnecour, the chapter 13 trustee for the district of Western Pennsylvania. Saying that the company had lost or destroyed more than $500,000 in checks paid by homeowners in foreclosure from December 2005 to April 2007, Ms. Winnecour asked the bankruptcy court to sanction Countrywide, the nation’s largest loan servicer.

For more, see Countrywide Settles Lending Suit in Pennsylvania.

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

"Dare To Dream" Investment Program Results In Ghost Town, Leaving Investors Holding The Bag

In Grantsville, Utah, The Salt Lake Tribune reports:

• The ads said, “Dare to Dream,” and Jeff Denison was among dozens who did. Now his dream is a nightmare. All he had to do to get into Utah's red-hot real estate market in 2006 was sign a contract with Dare to Dream Investments. That signature allowed his good credit to underwrite the purchase of a building lot and construction of a house. He didn't have to lift another finger. Dare to Dream would do it all for him: Find the lot, hire the contractor, sell the house. He would get 55 percent of the profit right off the top. No muss, no fuss. Denison liked the program so much, he signed up for two houses.

• Now he's left holding the bag on two $300,000 mortgages beyond the one he owes on his actual home. [...] Making matters even worse, the structures have piles of liens against them by subcontractors who didn't get paid. [...] His houses are among 42 built in Grantsville's Silver Fox development by Dare to Dream investors. All but three remain empty, creating a modern-day ghost town.

For more, see Investors: 'Dare to Dream' real-estate deal became a nightmare (They say firm misled them with inflated land appraisals).

More Financially Strapped Americans Hitting Up Their Retirement Plans, Insurance Policies For Quick Cash

The Wall Street Journal reports:

• A growing number of Americans, maxed out on credit cards and unable to get home-equity loans because of tighter lending standards, have found a new source of emergency cash: retirement plans and insurance policies. While tapping these funds may seem like a convenient way to address an immediate need, such as a looming medical or tuition bill, financial advisers urge caution. They say that consumers should carefully weigh the ramifications -- the possibility of a big tax bill and far less savings in retirement, for example -- before dipping into a 401(k), Individual Retirement Account or life-insurance policy.

For more, see Cashing Out (Retirement plans and insurance policies offer a way to get money quickly. But there are real disadvantages).

Mortgage Lender Erroneously Sends Out 9,000 Default Notices To Customers

In Clarksville, Tennessee, WSMV-TV Channel 4 reports:

• [A] computer glitch was cited as what caused thousands of certified letters to be sent out alerting US Bank mortgage holders that they were late on their payments and that if it wasn’t current in 30 days, the bank would be inspecting their properties for foreclosure and public sale. [...] US Bank issued a statement that said the accidental mailings stemmed from a computer error and were limited to a group of customers in Tennessee.

For more, see 9,000 Mistakenly Warned Of Mortgage Default (Bank Says Computer Glitch Led To Error).

The Secret's Out: Foreclosing Lenders Around The Country Continue To Get Hammered Over Missing, Inconsistent Mortgage Docs

The National Law Journal reports:

• Alarmed by the dramatic rise in housing foreclosures across the nation, judges have taken a variety of actions to slow the pace, ranging from outright dismissals for incomplete work to mandated mediation to threatening attorneys with sanctions.

***

• A number of suits have accused banks of allegedly taking shortcuts to rush foreclosures through, often using so-called "foreclosure mills" — law firms that handle a high volume of foreclosure actions — to handle the cases, according to foreclosure defense lawyers, bankruptcy lawyers and consumer rights groups.

***

• In Ohio, which has been particularly hard hit by foreclosures, a consortium of plaintiffs' attorneys last month filed a class action against Deutsche Bank A.G. on behalf of Ohio homeowners facing foreclosure. The suit alleges that the bank lacks standing to bring foreclosures throughout Ohio and is missing key mortgage documents. Whittiker v. Deutsche Bank National Trust Co., No. 1:08cv00300 (N.D. Ohio).(1)

One Brooklyn, New York trial judge's approach to the apparent sloppy paperwork being filed by foreclosing lenders and their attorneys is described in these excerpts:

• "I deny more foreclosures than I approve," said Justice Arthur Schack(2) of Kings County, N.Y., Supreme Court, in Brooklyn. "I want to see the servicing agent's power of attorney, I want to see all the paperwork before I approve it. If the paperwork is garbage, I deny it. If you're going to take away someone's home, it should be done properly."

***

• In a blistering opinion in June, Schack, the Brooklyn judge, threatened Mary McLoughlin, an attorney at Rosicki, Rosicki & Associates of Carle Place, N.Y., with sanctions for filing a foreclosure on behalf of Wells Fargo. After doing his own research in the [computer-accessible New York City public records], Schack discovered that Wells Fargo never owned the mortgage. Schack denied the foreclosure and further set a hearing for Aug. 1 to afford her a chance to explain why she should not be sanctioned for "frivolous conduct." Wells Fargo Bank v. Reyes, No. 5516/08 (Kings Co., N.Y., Sup. Ct.) [2008 NY Slip Op 51211(U) [20 Misc 3d 1104(A)]; Decided June 19, 2008].(3)

For the whole story, see Judges, attorneys work to stanch foreclosures (As actions surge, so do dismissals, mediation orders) (no subscription required).

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.

(1) The suit alleges that, because Deutsche Bank lacked standing to bring foreclosure actions, its attempt to do so constituted violations of the Federal Fair Debt Collection Practices Act, as well as Ohio RICO, R.C. 2923.32 Engaging in pattern of corrupt activity, both on its part as well as on the part of its attorneys filing the foreclosure actions. In addition to damages and other relief, the homeowners seek the return of their homes lost to foreclosure, and request that the attorneys representing Deutshce Bank fork over all the fees they collected on the foreclosure actions.

(2) Ina recent case, Deutsche Bank Natl. Trust Co. v Maraj 2008 NY Slip Op 50176 (U); [18 Misc 3d 1123(A)]; January 31, 2008; Justice Schack, in denying a foreclosure, wondered if he was the target of a corporate "Kansas City Shuffle" (a reference to the 2006 film, Lucky Number Slevin, in which the term is explained by a hitman played by Bruce Willis) in that the paperwork filed by the foreclosing mortgage lender raised questions in his mind the answers to which weren't readily apparent to him, and which created the appearance of possible fraudulent activity, according to his written opinion. See earlier post, Brooklyn Judge Presides Over A Corporate "Kansas City Shuffle" In Foreclosure Action?

(3) In other gems by Justice Schack in which he denies foreclosure to other foreclosing mortgage lenders for submitting questionable paperwork, see HSBC Bank USA v Perboo, 2008 NY Slip Op 51385(U); Decided last Friday - July 11, 2008; and also a 2007 decision, Deutsche Bank Natl. Trust Co. v Castellanos, 2007 NY Slip Op 50978(U) [15 Misc 3d 1134(A)]; Decided on May 11, 2007, a foreclosure action in which he subsequently again denied foreclosure in the opinion in Deutsche Bank Natl. Trust Co. v Castellanos, 2008 NY Slip Op 50033(U) [18 Misc 3d 1115(A)]; Decided January 14, 2008. missing mortgage foreclosure docs beta missing mortgage foreclosure docs gamma Arthur M. Schack ForeclosureMillAttorneysAlpha SloppyForeclosuresAlpha