Feds Announce Mortgage Modification Program For IndyMac Home Loans

CNNMoney reports:

• Six weeks after taking over mortgage lender IndyMac Bank, the FDIC announced a plan on Wednesday to automatically modify some of the bank's most troubled borrowers to keep them in their homes. The Federal Deposit Insurance Corp. said it will start sending out letters this week to thousands of borrowers most seriously delinquent on their loans. The goal of the modifications: to provide borrowers with affordable payments while minimizing the risk of foreclosure and loss for investors in securities backed by the loans.

For more, see Distressed IndyMac borrowers to get relief (FDIC offers plan to systematically modify loans for homeowners most at risk of foreclosure).

2nd Suspect Goes Down In Alleged Minneapolis Flipping Scam Involving 20+ Homes

In Hennepin County, Minnesota, the Minneapolis Star Tribune reports:

• A Twin Cities mortgage broker charged in connection with a $4.9 million mortgage fraud scheme involving dozens of homes in Minneapolis and one in Golden Valley pleaded guilty today to one count of racketeering just minutes before he was to go to trial, said Hennepin County Prosecutor Tom Fabel.

• Donald Walthall, 40, of Anoka, was charged in late 2007 with one count of racketeering and 24 counts of theft by swindle, according to a criminal complaint filed in Hennepin County District Court. He pleaded guilty to one count of racketeering and accepted a 6-year prison sentence,(1) Fabel said. "He concluded that the guilt and overwhelming evidence was true," Fabel said. "He feared that if he might get a longer sentence if he went to trial."

For the story, see Broker implicated in mortgage fraud scheme pleads guilty.

Go here for earlier posts, and any available updates, on the alleged Universal Mortgage straw buyer, home flipping scams.

(1) According to the story, as president of president of Universal Mortgage Inc., a Brooklyn Park firm that also went by Superior Mortgage, Walthall led the scheme in which associates recruited straw buyers to buy Universal-owned properties at inflated prices. Walthall allegedly falsified employment histories, incomes, borrower's net worth and their intentions to live in the homes to secure larger-than-necessary loans, then took a kickback for himself. He earned $20,000 to $80,000 each time a buyer bought a Universal-owned property, Hennepin County Prosecutor Tom Fabel said.

Monterey DA Charges Three In Alleged Upfront Fee Foreclosure Rescue, Refinance Scam

In Monterey County, California, The Salinas Californian reports:

• [T]he Monterey County District Attorney's Real Estate Prosecution Unit has filed multiple felony charges alleging that three suspects targeted and defrauded financially distressed homeowners through a Monterey County “foreclosure rescue” scam between Feb. 10 and June 15 of this year. The complaint charges Monterey County residents Maria de Lourdes Ponce and Fabian Olivarez Casillas and Santa Cruz County resident Melissa Garcia with criminal conspiracy.(1)

***

• The suspects allegedly promised that they could negotiate with lenders to either lower monthly mortgage payments or refinance home mortgages and that such services required an advance fee of as much as $2,800.(2) Clients were assured that the advance fee was a “loan processing charge” and “fully refundable” if the loan negotiation failed.

***

• The criminal investigation commenced on June 6, after the Gonzales Police Department received a report from an alleged victim of the foreclosure rescue scam. By July 17, the Gonzales Police Department had obtained statements from more than 35 victims and additional witnesses and executed a search warrant on Maria de Lourdes Ponce’s home.

For more, see DA charges 3 in Monterey County foreclosure scams; more than 30 victims involved.

See also, KSBW-TV Channel 8: Gonzales Woman Arrested For Mortgage Fraud (Police: Woman Charged Homeowners Thousands) (read story) (watch video).

(1) According to the story, Ponce, who was arrested by Gonzales Police Department on Aug. 15, faces 11 other felony counts, including residential burglary and elder abuse, 9 counts of grand theft, and 3 misdemeanor counts. Garcia is currently in custody in Santa Cruz County, where she faces prosecution on charges of forgery, elder abuse and multiple counts of felony grand theft in a similar foreclosure fraud scheme. A warrant has been issued for the arrest of Fabian Casillas.

(2) Collecting upfront fees in California is prohibited under Section 2945.4(a) of the California Civil Code.

Profile Of A Refinancing Scam Artist

In Southern California, The Orange County Register ran a two-part story profiling James Matthew Osborn, aka Jimmy Osborne, a mortgage salesman who was sentenced on April 18, 2008, to 10 years in prison for stealing more than $550,000 from homeowners who were looking to refinance:

• Osborn, 45, was a mortgage salesman. He would later admit in court that between 2003 and 2007, he stole more than $500,000 from people who were seeking to refinance their home loans. He caused 10 families to lose their homes to foreclosure, prosecutors said.

For more, see:

• Portrait of a scam artist (Ten families lost their homes because of the mortgage fraud Jimmy Osborn perpetuated. A persistent victim fought back);
• Chasing down a smooth operator (Jimmy Osborn was a criminal who took advantage of a system that offers little protection for mortgage borrowers).

NY Court Denies Tenant Eviction After Foreclosure Sale; Failure To Name, Serve All Occupants As Parties In Foreclosure Action Fatal To Removal Attempt

A February, 2008 lower court decision in Nassau County, New York addressed a situation involving the attempted eviction of four occupants in a home, the title to which was acquired by a mortgage lender in a foreclosure sale that foreclosed the ownership interest of the last owner of record, one Angello Bernard. The court described the four occupants as follows:

• [Kesha] Springer(1) resides in the Premises with her mother, Lecreta Springer, her sister, Cherryann Dalrymple and Cherryann Dalrymple's twelve year old son. She avers that she has lived in the Premises since 1997.(2) The Premises were previously owned by her parents. When Kesha's father died, her mother had trouble making the mortgage payments. To avoid foreclosure, Lecreta Springer transferred the property to Bernard, who refinanced the property.(3) Although Bernard owned the property, Lecreta Springer made the mortgage payments. Lecreta Springer was again unable to make the mortgage payments and the Property was foreclosed. Lecreta Springer and Kesha have been negotiating with the Bank to purchase premises but have been unable to do so.

In denying the foreclosing lender's motion for a writ of assistance to evict the occupants after the foreclosure sale, the court said:

• While a writ of assistance may be issued evicting [Kesha] Springer and Bernard from the property, a writ cannot be issued terminating the occupancy of Lecreta Springer, Cherryann Dalrymple or her son. Lecreta Springer, Cherryann Dalrymple and her son were not named or served as parties in the foreclosure action.(4)

The occupants were represented by attorney Lawrence S. Lefkowitz, Hempstead, New York.

For more, including the court's discussion of the New York law it applied in reaching its decision in this case, see MERS, Inc. v Bernard, 2008 NY Slip Op 50308(U) [18 Misc 3d 1134(A)]; February 19, 2008, Supreme Court, Nassau County.

(1) Along with Angello Bernard, Kesha Springer was named as a defendant in the foreclosure action and served with the foreclosure complaint.

(2) It is important to note that the occupants were living in, and were in possession of, the home prior to the commencement of the foreclosure action. The court's decision in this case may very well have been different had the occupants moved in after the commencement of the action, or more precisely, after the recording of the lis pendens once the action was initiated.

(3) I wonder if this was an equity stripping, foreclosure rescue scam???

(4) Apparently, the fact that one of the home's occupants was only 12 years old was no bar to his due process right to be named as a party in the foreclosure action and be served with the lawsuit. Presumably, if there were more minor children living in the household, they, too, would have been entitled to their due process right to be named and served in the foreclosure action, regardless of age. I wonder how many attorneys for foreclosing lenders ever bother naming and serving any occupants who are minors.

The fact that the foreclosing lender named "John Doe" & "Jane Doe" to designate any of the home's occupants as additional defendants in the foreclosure action was apparently, at least in this court's view, insufficient to cut off their occupancy rights in the home after completion of the foreclosure. For more on the use of "John & Jane Doe" alias when naming unknown tenants in foreclosure actions, see yesterday's post, Failure To Name Tenant In Home Foreclosure Action Thwarts Subsequent Eviction Attempt; Use Of "John Doe" Alias Ruled Ineffective Absent Due Diligence. (I can't help wondering how often some attorneys representing foreclosing mortgage lenders mindlessly utilize the "John & Jane Doe" mechanism to name unknown tenants & occupants without exercising any diligence in attempting to ascertain their actual names - maybe as often as they mindlessly use "lost note affidavits" in cases where they don't have physical possession of the actual promissory note). TenantRentSkimmingAlpha foreclosure faulty notice ScrewUpProcessServing

Deferred, Unfunded Maintenance A "Ticking Time Bomb" For Condo Associations; Tanking Real Estate Market, Unit Foreclosures Complicate Problem

The San Diego Union Tribune reports:

• Dilapidated stairways, rickety decks, leaky roofs, moldy walls and corroded sewer pipes. These are the sort of structural headaches confronting scores of homeowner associations as costly repairs to older complexes drain their communal treasuries. After years of deferred maintenance, compounded by tightfisted members' unwillingness to pay higher monthly fees, condominium associations are facing a looming financial crisis, condo experts say.

***

• “Deferred and unfunded maintenance is a ticking time bomb because so many homeowner associations are unprepared for it,” longtime condo attorney Erik Basil said. “What sometimes happens is association members don't want to contemplate having to write a $1,000 or $5,000 check, so they pretend there's nothing wrong, and that's what has occurred for the last 10 years.”

• The problems associated with stalled repairs have worried Conlon's association for some time and are being complicated by the slide in home values and the credit meltdown.

For more, see Postponed repair work catching up with condos.

Cincinnati Struggles In Getting A Handle On Its Abandoned Properties; Imposing Vacant Building Fees Yields Ineffective Results

In Cincinnati, Ohio, the Business Courier of Cincinnati reports:

• [T]here could be as many as 4,500 vacant buildings in Cincinnati, based on a recent computer search of addresses where Greater Cincinnati Water Works service has been shut off for at least six months. But only 1,614 of those properties are subject to licensing fees, and fewer than half have actually paid the fees since 2006.

• That’s not what city leaders expected when they beefed up the fee structure and requirements for Vacated Building Maintenance Licenses, or VBMLs, in 2006. The ordinance was designed to get vacant buildings put back into productive use or demolished, if necessary, as quickly as possible by spelling out standards for building owners to meet and charging them fees if the buildings remain vacant. The longer the building sits vacant, the higher the fee.

***

• About 544 property owners [...] have paid $628,000 in VBML fees since the revamped ordinance took effect.(1) City contractors have demolished more than 220 problem properties. And hundreds more building owners are working their way through the licensing process, some making interim repairs to stabilize roofs and prevent break-ins. But at this pace, it could take the city decades to make its way through its vacant-building stockpile.

For more, see An ordinance aimed at seizing the potential of Cincinnati’s thousands of vacant buildings is falling short.

Go here, Go here, Go here, and Go here for other posts on vacant homes leaving their mark on neighborhoods.

(1) Reportedly, one property owner described in the story pays a $3,500 annual license fee for a vacant home he plans on fixing up and moving into. ForeclosuresDestroyNeighborhoodsApple

Minnesota AG Targets Two More Upfront Fee Foreclosure Rescue Operators In Civil Suits

In St. Paul, Minnesota, My Fox TV Channel 9 reports:

• Two more out-of-state mortgage “foreclosure consultants” have been hit with lawsuits from Minnesota Attorney General Lori Swanson. A total of 10 companies have now been sued by Swanson over similar allegations. The lawsuit,(1) filed Monday, allege a Florida and New Jersey company each used websites, targeted mailings and phone calls to solicit at-risk homeowners with assurance their company could stop the foreclosure process and save their home. The lawsuits are against Florida-based Law & Associates, LLC,(2) and New Jersey-based Davis Mitigation, Inc, which also conducts business as Davis Foreclosure Assistance) in N.J., New York and Florida.

***

• A 2004 Minnesota law bars “foreclosure consultants” from charging any compensation until after the foreclosure consultant has “fully performed each and every service the foreclosure consultant contracted to perform or represented he or she would perform.”

For more, see Minnesota Atty. Gen. Sues 2 More 'Foreclosure Consultants'.

See also, Minneapolis Star Tribune: State sues two firms that asked cash for foreclosure assistance (The attorney general says some companies claiming to help in a foreclosure do anything but).

(1) According to the story, the suits allege the companies unlawfully charged customers up-front fees of up to $1790 before any services were performed, failed to include required safeguards in their contracts with Minnesota homeowners and failed to deliver promised services.

(2) This firm is also being hammered by the Florida AG in State of Florida v. Law & Associates, et al., alleging an upfront fee foreclosure rescue operation.

Failure To Name Tenant In Home Foreclosure Action Thwarts Subsequent Eviction Attempt; Use Of "John Doe" Alias Ruled Ineffective Absent Due Diligence

Last month, a Nassau County, New York trial court ruled that, under the specific facts of the case, the failure by a mortgage lender to name a tenant as a defendant in a home foreclosure proceeding kept the tenant from being subsequently evicted after the foreclosure sale. In addressing the lender's failure to name the tenant in the foreclosure action, the court made these observations (citations footnoted for ease of reading):

• [T]he respondent [tenant] was not properly named as a party in the foreclosure proceedings [...]. "In order to cut off the interest of an occupant of the premises, the occupant must be named as a party in the foreclosure proceedings."(1) The respondent was not named in the foreclosure proceedings and therefore her rights were "not affected by the judgment of foreclosure and sale."(2)

• The respondent, as the sole tenant, is a necessary party to the foreclosure proceeding (see 78 NY Jur. 2d Mortgages §588). As a necessary party who was not named in the foreclosure proceeding, the respondent's rights were "unaffected by the judgment and sale, and the foreclosure sale may be considered void as to the omitted party."(3) Thus, a tenant or occupant who was not named as a party in the foreclosure action retains his or her possessory rights and a right of redemption.(4)

***

• The foreclosure action has a designation for "John Doe" so as to include any unknown persons. The fact that the respondent [tenant], as a necessary party, was not named or served in the foreclosure proceeding would not be remedied, even if she, as an unknown person, were considered to be a "John Doe." CPLR 1024 [of the New York statute] permits a plaintiff to proceed against an unknown party but would be inapplicable in regard to the respondent. "Before naming a party as a "John or Jane Doe", the plaintiff must establish that it has made a genuine effort to ascertain the name of the party but has been unable to do so."(5) If the plaintiff knew or could have discovered the actual names of the parties named as "John or Jane Doe" with the exercise of due diligence, then the summons naming such parties as unknowns is jurisdictionally defective.(6)

Representing the tenant was the non-profit firm Nassau/Suffolk Law Services Committee, Hempstead, New York.

For the court decision, see Countrywide Home Loans, Inc. v Williams; 2008 NY Slip Op 51319(U) [20 Misc 3d 1111(A)]; July 1, 2008, District Court Of Nassau County, First District.

(1) Mers, Inc. v. Bernard, 18 Misc 3d 1134(A) [SCt, Nassau County 2008] (citing Douglas v. Kohart, 196 App Div 84 [2d Dept 1921]; and Krotchka v. Green, 121 Misc 2d 471 [Yonkers City Ct, 1983]).

(2) Id. (Citing Polish National Alliance of Brooklyn, U.S.A. v. White Eagle Hall Co., Inc., 98 AD2d 400 [2d Dept, 1983] and Empire Savings Bank v. The Tower Co., 54 AD2d 574 [2d Dept, 1976].

(3) 6820 Ridge Realty, L.L.C. v. Goldman, 263 AD2d 22, 26 [2d Dept, 1999] (see Si Bank & Trust v. Sheriff of the City of New York, 300 AD2d 667, [2d Dept, 2000]).

(4) Id.; and Davis v. Cole, 193 Misc 2d 380 [SCt NY, 2002].

(5) Mers, Inc. supra, citing Tucker v. Lorieo, 291 AD2d 261 [1st Dept, 2002] and Porter v. Kingsbrook OB/GYN Associates, P.C., 209 AD2d 497 [2d Dept, 1994].

(6) Id. citing ABCKO Industries, Inc. V. Lennon, 52 AD2d 435 [1st Dept, 1976]. TenantRentSkimmingAlpha foreclosure faulty notice ScrewUpProcessServing

NC Governor Signs Three Bills Affecting Foreclosures, Loan Servicers; Eliminating YSPs

In Raleigh, North Carolina, The Associated Press reports:

• North Carolina's governor signed three bills Monday to help home foreclosure filings, including one that requires lenders to provide 45 days notice before a foreclosure is filed. Gov. Mike Easley signed a bill establishing the North Carolina Foreclosure Prevention Project, under which both homeowners and the state's bank commissioner must receive 45 days notice before a foreclosure is filed. The law also allows the bank commissioner to extend any foreclosure filing notice by 30 days. The state would use that time to negotiate with the homeowner and mortgage holder on a loan interest rate and payments.

***

• Another bill eliminates rate spread premiums - also known as yield spread premiums - which go to mortgage brokers. [...] The third bill signed by Easley requires individuals and companies serving loans in North Carolina to register and make reports to the bank commissioner.

For more, see NC governor signs bills to curb home foreclosures.

Active Duty Guardsman Sues Lender Over Allegedly Illegal Foreclosure; Loses Home While In Iraq Despite Legal Protection Under SCRA

In Michigan, National Public Radio reports:

• [Army National Guard Sgt. James] Hurley and his family had been living in a three-bedroom manufactured home on Michigan's Paw Paw River. But they fell behind on the mortgage, and their lender began foreclosure proceedings in 2004. While Hurley was in Iraq serving as an Army mechanic, the lender sold the house and evicted Hurley's wife and children. Hurley says he learned about it after the fact during one of his occasional phone conversations with his wife.

***

• Now, the Hurleys are suing several parties involved with the foreclosure — including Deutsche Bank and Saxon Mortgage. The family says it should have been protected from foreclosure by a long-standing federal law known as the Servicemembers Civil Relief Act — what lawyers call the SCRA.

***

• "Military people need to have certain protections when they're off trying to serve us in a war," said Matt Cooper, the Hurleys' lawyer. "One of the rights under the SCRA is that you can't foreclose on them." [...] "It looks to me like the bank screwed up badly and needs to make things right," federal judge Nancy Edmunds said during a February hearing.

For more, see Lenders, Service Members Clash Over Law.

For copy of the original civil lawsuit filed in Detroit Federal Court, see Complaint - Hurley vs. Deutsche Bank National Trust, et al.

Go here for other posts on the Servicemembers Civil Relief Act.

Tenants Get Boot After Unwittingly Renting Home In Foreclosure From Non-Owner

In Philadelphia, Pennsylvania, a column in the Philadelphia Daily News reports:

• THE 'SPACIOUS' one-bedroom apartment listed in the Internet ad sounded perfect for Sherry Murphy and her 13-year-old daughter. [...] Seemed like a bargain at $130 a week. So she moved in and paid the first week's rent to a man named Kenneth Dixon, who she thought was the owner. She wasn't the first. At least five other tenants were living there and Dixon collected their rents personally every week. And then the Department of Licenses and Inspections issued a seven-page violation report and ordered the property shut down. The tenants had read about the place in an ad Dixon ran on Craigslist.

***

• Dixon never owned the property. Anthony Johnson, whose wife, Dolores, is listed on the deed as the owner, says that they had no idea that Dixon had turned the place into a rooming house. [...] Johnson said that he had fallen behind five months on the $4,700-a-month mortgage by May. He said he was moving out of the house when Dixon appeared. [...] "He told me he helped people in distress. It was a blessing." They agreed that Dixon would buy the distressed property, freeing the Johnsons from foreclosure. But the lease-purchase arrangement fell through because of liens that had been levied against the property before Dixon got involved. Instead, Johnson said, Dixon agreed to pay the mortage and live in the property until the judgment was cleared and the sale could be arranged.

For more, see She thought she'd found a home, but it was all a house of cards.

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

Massachusetts Couple Sue Foreclosure Rescue Operator For Allegedly Swindling Them Out Of Home In Equity Stripping, Sale Leaseback Deal

In Auburn, Massachusetts, the Worcester Telegram & Gazette News reports:

• An Auburn couple have sued several people — including one who tried to flee the country with $1.3 million and has pleaded guilty to wire fraud in an unrelated case — of swindling them out of the title to their home. Auburn Fire Lt. Francis X. Hartnett, 35, and Kim M. Carville, 34, have been together for 12 years. [...] Last month, Mr. Hartnett and Ms. Carville say, they found out they lost title to their house two years ago. Mr. Hartnett and Ms. Carville contend the title was stolen by Stuart Brown, Trisha Graham and Allen J. Seymour, who was arrested Feb. 8 in Florida trying to flee the country on a private jet with $1.3 million hidden in his luggage.(1)

***

• On July 24, Superior Court Judge Peter W. Agnes Jr. granted restraining orders against Wachovia Bank, the present holder of the delinquent mortgage, from foreclosing, and against Ms. Graham and Mr. Brown from collecting rent, coming to the property and evicting the couple and their two boys from the premises. “The ball is in their court now,” [the homeowners' lawyer, Margaret M.] Melican said. “They have to answer the suit within 20 days of having been served.”

For more, see Tricked out of home deed, couple say (Lawsuit says scammers preyed on their distress).

(1) According to the story: (a) On July 22, Mr. Seymour pleaded guilty to wire fraud and interstate transportation of property stolen or taken by fraud; (b) He recently was named by Assistant Attorney General Andrew Doherty as the mastermind behind an alleged mortgage fraud scheme in an investigation involving as many as 60 properties in Worcester County.

Title Underwriter Refuses To Defend Against Forgery Claim Made By Countrywide; Says Lender's Recklessness Brought On Its Own Problems

In Chicago, Illinois, the Chicago Tribune reports:

• It could be the tip of an iceberg. Ticor Title, one of the largest title insurance firms in the country, is suing Countrywide Home Loans, the nation's largest home lender, saying it shouldn't have to pay out on a title policy because of Countrywide's gross negligence. The suit, filed last month in Cook County Chancery Court, concerns just one Chicago mortgage made by Countrywide in 2007, but the implications are enormous, say real estate and title insurance experts.

***

• The case that Ticor has drawn a line in the sand over concerns a $360,000 first mortgage on a graystone Victorian in the Kenwood neighborhood on the South Side. The story of that loan was told in a front-page Tribune story in February,(1) several weeks after a clothed, mummified male corpse was discovered in the boarded-up house by a real estate speculator who had purchased the property from Countrywide in a foreclosure auction.

• The corpse was later identified as Randy Johnson, who had grown up in the house and continued to live there until he disappeared in late 2005. The gruesome discovery prompted Cook County Public Administrator Michael Bender to look into the case. Bender's staff quickly determined the backdated deed that had transferred the home from Johnson's deceased mother, Arrellia Johnson, to a woman named Rhonda Evans was a fake, and not all that hard to spot.(2)

***

• Three months after the fraudulent deed was recorded, Evans sold the house to Donald Franklin of Harvey for $450,000. Franklin borrowed the entire amount in two simultaneous mortgages from Countrywide. The public administrator, who handles the affairs of people with assets who die without wills, moved to intervene in Countrywide's foreclosure case and asked the court to restore the property's title to Arrellia Johnson's heirs. Four days later, Countrywide asked its title insurer, Ticor, to represent its interest in the case. Ticor refused.(3)

Reportedly, as these two titans battle it out in court, the home of the late Arrellia Johnson sits vacant, boarded up, with a leaky roof, and is likely to stay that way until the title dispute is cleared up. Further, the estate's legal bills reportedly continue to accumulate as every court date requires the presence of an attorney from the public administrator's office - bills ultimately to be paid out of the late Ms. Johnson's estate when it is settled.

For more, see Title firm ready to do battle (Suit over Chicago house could set up national showdown).

(1) For the February Chicago Tribune story, see This house was a steal (How fraud led to this property changing hands 3 times as son of owner sat dead inside).

(2) According to the story: Arrellia Johnson's name was spelled two ways and the alleged 1996 warranty deed was created on the stationery of Recorder of Deeds Eugene Moore, who did not take office until 1999. Another warning sign: The deed was notarized by Mae Evans, who is the mother of Rhonda Evans.

(3) Reportedly, in the suit, Ticor argues Countrywide was "reckless and grossly negligent in its underwriting of the Franklin mortgage." That carelessness is the only cause of any loss suffered by the lender, Ticor alleges. Its claims go further: Ticor alleges that Countrywide "adopted corporate policies that resulted in the abandonment of proper underwriting standards as part of its effort to increase market share, and in the short term, profits."

Civil Lawsuits Focus Spotlight On Augusta-Area Real Estate Operator; Questionable Transactions Resulted In 40+ Foreclosures

In Augusta, Georgia, The Augusta Chronicle, reports on local real estate operator, S.D.A. & Associates and its owner Regina Preetorius. Some of the firm's customers have filed lawsuits against them alleging that questionable transactions have resulted in the loss of their homes, and others claim that they invested money with the firm and the money is now unaccounted for:

• Three lawsuits have been filed against Ms. Preetorius accusing her of fraud and racketeering, and a number of people The Augusta Chronicle talked to who had dealings with S.D.A. say they, too, will be contacting attorneys.

• HERE'S WHY: According to the lawsuits and those who talked with The Chronicle , instead of helping people catch up with mortgages or sell their homes, Ms. Preetorius treated the property as her own and obtained second and third mortgages on the houses. Investors gave S.D.A. money in exchange for security deeds on the properties. The investors' security deeds are worthless, however, if the original mortgage lender forecloses and the equity in the house can only pay off that loan. And when the original mortgage lender forecloses, anyone living in the home is evicted.

***

• In S.D.A.'s wake are more than 40 foreclosures, 12 involving Ms. Preetorius or her various business entities,(1) and about a dozen people who went bankrupt. By the time Ms. Preetorious and her husband filed for Chapter 7 bankruptcy Aug. 4, she had been involved in the transfer of properties with a combined fair market value of more than $10.6 million. She had also persuaded investors to give her nearly $3.7 million in exchange for security deeds on properties.

For more, including the reported details of the allegations in some of the lawsuits, see Suits question real estate transactions (Owners say mortgage relief offers ended with foreclosures).

Go here for other posts and updates on this story.

(1) According to the story: Ms. Preetorious has had several businesses: Southeastern Holding Group, R.M.P. Holding Group, S.M.B. Holding Group, A.C.B. Holding Group, D.T.B. Holding Group, Preetoria Inc., and Omega Holding Group. The only business still licensed is S.D.A.

Creative Homebuyer Incentives Offered By Builders On The FBI Radar Screen

The Wall Street Journal reports:

• When home sales began to slow at the start of the downturn, home builders offered buyers incentives -- instead of reducing prices -- to stimulate demand. The incentives included cars, tuition and credit-card payments, and even cash. Now, federal investigators are questioning whether some of those incentives misled lenders and caused them to write mortgages that were artificially inflated, contributing to today's home-price crash.

• Using incentives to sell homes has long been a marketing tool for builders. When properly disclosed and structured, the practice is legal. But the Federal Bureau of Investigation is looking into allegations that home builders, brokers and appraisers defrauded lenders by not disclosing unusually large incentives to buyers, which could have added as much as $100,000 to the price of a home.(1)

Reportedly, some builders continue to make generous offers.(2)

For more, see FBI Probes Unusual Incentives for Home Buyers (Investigators Ask Whether Payments Misled Lenders).

(1) According to the story: In the Las Vegas division of Dallas-based Centex Corp., the home builder paid off car loans, credit-card bills and mortgage payments on existing homes to entice new buyers on homes priced between $350,000 and $550,000. Those payments weren't always disclosed to lenders. "You weren't buying a house. You were buying a package," says Dana Ellis, who worked as an escrow manager for Centex from 2004 to 2006. To qualify, Centex required the buyer to use the company's in-house mortgage unit to originate the loan, and the loan application included an incentive "addendum" that listed the incentives but wasn't always sent to the lender. "They weren't disclosing any of this. That was on separate paper that was pulled," she says. Centex says that the program was confined to about 50 sales and was shut down in June 2006, about six months after it began.

(2) According to the story: Wagner Homes Inc., a local home builder, advertises in big capital letters at the top of a flyer "$130,000 commission any way you like it!" for homes in developments like "Dawn Day Fusion," a northwest Las Vegas subdivision that offers homes with Asian-inspired architectural flourishes. New homes listed there in mid-July for $530,000 even though similar model homes in that development sold for $400,000 two years ago. "A fee that high has got to raise a bunch of flags," says Kenneth LoBene, HUD's Las Vegas field director, because builders typically reduce the price of the home rather than offer such large incentives and because homes in that subdivision have sold for as little as $240,000 in foreclosure auctions. Representatives of Wagner Homes didn't return calls seeking comment.

In another recent story of a condominium developer using creative homebuying incentives to unload unsold inventory, see Promenade condos scarcely populated (Though sales are stalled, residents have faith luxury condos will avoid fall); the report describes a sales promotion in which the developer will pay the buyers' mortgage payments, property taxes and association fees for three years.

"Creative" Sales Raising Suspicions In One Escondido Condo Development In Financial Trouble As Some Recent Transactions Resemble Straw Buyer Deals

In Escondido, California, North County Times reports:

• In the middle of a historic recession for North County's housing market, one south Escondido condominium complex experienced an extraordinary burst of sales. Twelve small units in Brookhaven Condominiums, a development of two converted apartment buildings, have sold since December for $360,000 or more ---- roughly double the prices of similar condos in the neighborhood. Indeed, the dozen Brookhaven units had surged by 31 percent in value since 2006, even as the median price of condos in the area plummeted 54 percent. Neither Brookhaven's developers nor their bankers would explain this remarkable performance, despite repeated requests from the North County Times.(1)

***

• "You would think that after the huge market meltdown, that banks and lenders would be paying a whole lot more attention to make sure they're appropriately pricing the collateral," said Paul Leonard, director of the California office of the Center for Responsible Lending in Sacramento. With no knowledge of the Escondido condo market, Leonard said he could not comment specifically on the Brookhaven complex, but "to the extent that I hear about transactions like this one, it's clear that there are still some problems that need to be fixed."

For more, see Surging condo prices raise questions (Facing default, developer pulls off string of high-priced sales).

(1) For another recent story of a condominium developer using creative homebuying incentives to unload unsold inventory, see Promenade condos scarcely populated (Though sales are stalled, residents have faith luxury condos will avoid fall).

• [The developers real estate broker] said some new buyers may be eligible for a promotion in which the developer will pay the buyers' mortgage payments, property taxes and association fees for three years [claiming] "It helps keep the property value up for three years - That's the responsible thing to do. You want to keep the comparables up for sure, you don't want to hurt the property value of the building."

More Legal Protections For Chicago Tenants Facing Eviction From Homes In Foreclosure

In Chicago, Illinois, the Chicago Sun Times reports:

• Chicago renters left in the lurch — and evicted without warning — when their landlords face foreclosures would have added protections under a mayoral plan unveiled Thursday. [...] The plan calls for City Hall to expand an emergency rental assistance program to support up to three months of rent and moving expenses for eligible tenants evicted after a landlord’s foreclosure. Pro-bono legal services provided to evicted tenants by the Lawyer’s Committee for Better Housing(1) will be expanded.

• And the city is prepared to launch a tenant outreach program as soon as Gov. Blagojevich signs a bill on his desk that broadens the umbrella of protections for impacted renters. Among other things, the bill guarantees renters a minimum of 90 days’ notice before being thrown out of foreclosed buildings. Currently, some renters get as little as five days’ notice. The bill also requires the sealing of court records so landlords are not unfairly punished when they seek new housing or credit.

For more, see New laws to protect renters from foreclosure.

(1) According to their website, the Lawyer’s Committee for Better Housing's clients are provided an array of services by volunteer attorneys, from settlement negotiations to motion practice to full litigation, depending on the nature of their case; and the group observes that because of their efforts, the landlords’ bar is more easily persuaded to settle their evictions cases in a manner favorable to the tenant rather than continuing litigation. TenantRentSkimmingAlpha

California State Law, Local Rent Control Law Gives Strong Protections For San Francisco Tenants In Foreclosed Homes

Buried in a recent article in the San Francisco Chronicle is the following excerpt addressing the rights of San Francisco tenants in foreclosed homes that come within the scope of the city's rent control laws, as well as state law:

• Lenders who take back properties or investors who pick up foreclosed homes generally prefer the buildings empty, because that makes them easier to sell. Under San Francisco laws, however, those aren't grounds for an eviction in a rent-controlled building.(1)

• Unless tenants have stopped paying rent or otherwise have misbehaved, generally they can be forced out only when a new owner plans to demolish the property, has secured the necessary approvals to convert into it condominiums or plans to move in family members or him or herself, according to the city's rent ordinance. Even then, the owner typically must provide several months' notice and thousands of dollars in relocation costs.

• In addition, new owners - a bank, a trustee or otherwise - generally become liable for the same obligations of the previous landlord, said Robert Collins, deputy director of the San Francisco Rent Board. That means that if the original lease said the landlord pays for electricity, [...] the company that bought it is responsible now.

For more, see Foreclosure's hidden victims.

(1) According to the story: State and local laws prohibit landlords from evicting tenants or shutting off utilities in most circumstances like these, but not all renters are aware of the rules, and not all of the entities that take control of properties try to learn them. "The basic problem is that the people who are acquiring these properties, they don't understand or want to understand that tenants have rights in San Francisco," said Tommi Avicolli Mecca, director of counseling programs at the Housing Rights Committee of San Francisco. "You can't just go in and tell them to leave, you can't shut off utilities, you can't call the police, you can't do any of that stuff." He and other tenant advocates and attorneys worry that many renters who aren't aware of these rules are being pressured into handing over their keys. TenantRentSkimmingAlpha

Central Florida Legal Services Firm Opens Walk-In Clinics To Address Rising Needs Of Homeowners In Foreclosure As Calls For Help Double

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

• [C]alls to the help line at [Community Legal Services of Mid-Florida](1), which is based in Daytona Beach and serves 12 counties, have doubled in the past two years to about 40,000 calls a year. The agency, which receives mostly federal dollars, is only financially able to assist about half the people. Although most of the calls are for family-law help such as domestic violence, divorce and child custody, the number of calls from people seeking housing and foreclosure help has doubled in the past year. Those calls make up 38 percent of callers. The agency started various walk-in clinics last week to help with the rising need.

***

• Although there are 27 paid attorneys on staff, including about a dozen in Daytona Beach, the agency also had 96 local lawyers who donated their time and services this past year.

For more, see Homeowner's woes eased by legal agency.

(1) A nonprofit law firm that provides legal aid to low-income families, seniors and victims of domestic violence or housing discrimination.

South Jersey Bank, Non Profit to Establish Sale Leaseback Program To Rescue Homeowners In Foreclosure

In Cumberland County, New Jersey, The Press of Atlantic City reports:

• A private bank and a local nonprofit group in Cumberland County are stepping in with a unique strategy to help people avoid losing their homes. The program, launched by Tri-County Community Action Partnership with $1 million in backing from Colonial Bank, would in some cases temporarily buy homes that are being foreclosed and sell them back to the original owners within a year when those owners are in better financial shape. The key is the potential sale and repurchase would come only after homeowners go through financial planning, debt restructuring and counseling through Tri-County, which has plenty of state-accredited expertise to offer.

For more, see Fighting foreclosures / Innovative program.

California Fair Housing Group Expands Into Murrietta; Offers Free Services To Homeowners In Foreclosure

In Murrietta, California, North County Times reports:

• [A]fter hosting a foreclosure prevention workshop last month at which more than 350 people were given direct answers to their personal mortgage woes, Murrieta city officials invited the Fair Housing Council [of Riverside County] to set up shop locally. The council is a nonprofit advocacy group that acts as an intermediary between lenders and borrowers to negotiate terms of loans, review documents, watch for mortgage fraud scams and empower homeowners by apprising them of their rights and about free services available to them.

For more, see Fair Housing opens doors (Advocacy group to address local needs immediately).

Gas Leak Found In Foreclosed Home; Neighbors On Both Sides Of Street Forced To Evacuate

In Chillecothe, Ohio, the Chillicothe Gazette reports:

• Neighbors living near 727 E. Main St. had to be evacuated for a time [earlier this week] because of natural gas coming from that address. According to officials at the scene, neighbors called emergency workers when they smelled natural gas coming from the building. Officials said the gas was left on and leaked in the home after the inhabitants moved out due to a foreclosure. Firefighters evacuated homes on both sides of the street on the block between Poplar and Wade Streets as a precaution as they shut off the electric and gas in the home and let it air out. [...] Nobody was injured in the incident.

Source: Natural gas leak causes evacuation. foreclosure arson whale ArsonForeclosureAlpha

Foreclosed Home Goes Up In Flames, Leaving Four Tenants Homeless; Cause Under Investigation

In Marysville, California, the Appeal Democrat reports:

• At least four renters were left homeless [last week] when a fire swept through a Marysville house. The fire at 527 G Street was reported shortly after 6:30 a.m. All occupants escaped uninjured, said Capt. Matt Furtado of the Marysville Fire Department. The house was in foreclosure and was sold July 22 at an auction in front of the Yuba County Courthouse, according to county Recorder's Office records. [...] Furtado did not comment on a possible cause of the fire. "It's all under investigation," he said. [...] If the house can be salvaged at all, it will have to be gutted, said Furtado.

For more, see Early morning blaze burns house.

For story update, see Hero saves lives in fire (Marysville man awakens tenants, grabs ladder).

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

Gunman Surrenders After Standoff With Deputies During Eviction Of Foreclosed 88-Year Old Mother

In Saddle Brook, New Jersey, The Bergen County Record reports:

• The son of a 88-year-old Saddle Brook woman whose house had been sold at foreclosure was arrested after pulling a gun on sheriff's officers [Tuesday]. Two Bergen County sheriff's officers eventually talked John Brennan into giving up the weapon, and he was taken into custody. The homeowner, Beatrice Brennan, was walked out of the house and taken away by ambulance.

***

• Beatrice Brennan had lived on the Adriana Street cul-de-sac for decades, neighbors said. But the house had been refinanced and the loan couldn't be paid, a real estate agent at the scene said. The home eventually was sold May 16 at a sheriff's sale.

For more, see Gunman surrenders after standoff.

Go here for other posts on Police incidents at foreclosed homes. SheriffDeputiesForeclosureAlpha

Cops Suspect Murder-Suicide In Case Of Homeowners In Foreclosure

In Romeoville, Illinois, The Herald News reports:

• Police are investigating the possible murder-suicide of a wife and husband found dead in their home Wednesday night. [...] Police were called to the house -- which was in foreclosure and had been sold at auction -- shortly before 6 p.m. Wednesday by the couple's son, who said he had been trying to contact his parents for the past couple of days. [...] A judgment for foreclosure on the [...] home was entered Feb. 11, 2008, according to court records. It has been sold at auction, with a court date of Aug. 20 to confirm the sale, according to the Will County Circuit Clerk's office.

For more, see Police: Deaths may be murder-suicide (A Married Couple Were Found Dead In Their Romeoville Home Wednesday Night, Victims Of Gunshot Wounds).

Go here for other posts on foreclosures and suicide.

Go here for other posts on police incidents at foreclosed homes. suicide homeowner foreclosure zeta SheriffDeputiesForeclosureAlpha

Attempting To Serve Foreclosure Eviction Notice, SW Florida Deputies Stumble Into Dead Body; Victim's Wife Faces Murder Charges

In Lehigh Acres, Florida, WINK-TV News reports:

• Lee County Sheriff's Deputies have arrested a woman for allegedly killing her husband in their Lehigh Acres home on Monday morning. [... 2]4-year-old Amber Roberts is in the Lee County jail awaiting her first appearance on a second-degree murder charge for the death of 27-year-old John Roberts. John Roberts was found dead inside his home [...] by deputies with the civil division. The home is in foreclosure, and deputies were trying to serve an eviction notice. According to the Lee County Sheriff's Office, when nobody answered the door, a deputy went inside, believing the home was vacant. That's when he discovered John Roberts's body.

For the story, see Arrest made in Lehigh Acres Murder; Divers to Search for Weapon.

For story update, see Deputies say wife confesses to husband's killing in Lehigh Acres.

Go here for other posts on Police incidents involving homes in foreclosure. SheriffDeputiesForeclosureAlpha

Criminal Probe To Be Opened Into Circumstances Surrounding Foreclosure Sale

In Pawnee County, Oklahoma, The Oklahoman reports:

• A criminal investigation will be opened on a foreclosure sale in which the son of Pawnee County Sheriff Roger Price obtained a house for far less than the mortgage amount. Jessica Brown, spokeswoman for the Oklahoma State Bureau of Investigation, said her agency learned about the matter earlier this week. The investigation involves a 2,814-square-foot house south of Cleveland that Price's son bought for $97,000 at an April auction overseen by Price. [...] The outstanding mortgage was for $188,125. The county assessor listed its market value as $144,412. However, appraisers picked by Price said the property was worth just $15,500.

Source: OSBI plans to investigate Pawnee County house sale.

For earlier post on this story, see Oklahoma Judge Accuses County Sheriff Of Improper Conduct In Conducting Foreclosure Sales.

Judge Nixes Settlement Between Countrywide, Ch. 13 Trustee; Questions Fairness To Nearly 300 Borrowers Allegedly Screwed Over By Lender's Practices

In Pittsburgh, Pennsylvania, Reuters reports:

• A federal bankruptcy judge has rejected a settlement involving Countrywide Financial Corp, saying he wasn't convinced it was fair to nearly 300 borrowers allegedly hurt by the mortgage lender's abusive practices. The settlement calls for Countrywide, acquired by Bank of America Corp last month, to pay $325,000 to the Chapter 13 bankruptcy trustee in Pittsburgh, Ronda Winnecour,(1) to cover costs and settle litigation in 293 separate cases. [...] The judge ordered both sides to address his concerns, and scheduled an October 2 status conference.

For more, see Judge rejects Countrywide settlement.

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

(1) According to the story: In her complaint, Winnecour alleged that in dealing with the borrowers, Countrywide made inaccurate claims, filed unnecessary court papers and demanded improper fees and charges. She also accused it of losing or destroying more than $500,000 in checks paid by homeowners in foreclosure.

Minnesota AG Targets Mortgage Broker For Alleged False, Misleading, Deceptive Acts & Practices

In Hennepin County, Minnesota, the Minneapolis Star Tribune reports:

• Noting that lending practices behind the nation's tenacious mortgage crisis still occur, Minnesota Attorney General Lori Swanson singled out Source Lending Corp. in a lawsuit filed Thursday in Hennepin County District Court. The suit alleges that the Plymouth-baed mortgage brokerage misled borrowers into buying risky mortgages, causing some to lose their homes. The state is asking for an injunction, penalties of up to $25,000 per violation, and restitution for any borrowers harmed, Swanson said.

***

• Swanson's suit is the second against Source Lending in five months. The Foreclosure Relief Law Project in St. Paul sued in April -- the first suit under a new state anti-predatory lending law -- claiming violation of a new fee limit of 5 percent of a loan's value.

***

• The suit's allegations fall under state statutes on deceptive trade practices, false advertising, consumer fraud, and mortgage brokering. The events predate the state's new anti-predatory law. Swanson said her office expects to file more lawsuits involving both mortgage and foreclosure services.

For more, see Swanson sues mortgage firm, alleges deceit (Minnesota's attorney general says Source Lending misled buyers into risky mortgages, causing some to lose their homes).

For the Minnesota AG's press release, see Minnesota AG Files Suit Against Source Lending Corporation Over Abusive Predatory Mortgage Lending Practices.

USDOJ Files Discrimination Suit Against South Florida Property Management Company; Fair Housing Act Violations Alleged

In Broward County, Florida, the South Florida Sun Sentinel reports:

• A manager at a Davie apartment complex turned away African-American applicants, then tried to use the lack of black tenants to appeal to whites, according to a lawsuit filed Wednesday by the U.S. Justice Department. The suit accuses C.F. Enterprises LLC and on-site apartment manager Don Murroni of discriminating against black people trying to rent at College Square Apartments in violation of the Fair Housing Act. Evidence was gathered through the department's Operation Home Sweet Home initiative, where individuals pose as renters to identify possible discriminatory practices.(1)

For more, see Davie apartment manager kept out black applicants, according to lawsuit.

See also USDOJ press release: Operation Home Sweet Home Results in Florida Lawsuit Alleging Discrimination Against African-Americans.

Go here for more on the U.S Justice Department's "Operation Home Sweet Home."

(1) According to the story: The complaint alleges the defendants discouraged African-Americans from applying and offered to waive the application fee and other costs for white applicants only. The lawsuit, filed in Fort Lauderdale federal court, seeks an injunction against further discrimination, money damages for victims and civil penalties to be paid to the United States.

New Law Protects Hawaii Homeowners From Foreclosure Rescue Scams

In Honolulu, Hawaii, Pacific Business News reports:

• The Hawaii Bankers Association is reminding consumers that the Hawaii Mortgage Rescue Fraud Prevention Act, signed into law by Gov. Linda Lingle in June, protects them from people who prey on homeowners facing property foreclosures and liens. “Mortgage rescuers,” or distressed-property consultants, charge high fees, often do minimal work and employ deceptive tactics that sometimes force homeowners to deed their properties to the mortgage rescuer, according to the association. The new law requires consultants to provide homeowners with a written contract detailing their services. It also gives homeowners the right to cancel at any time before services are performed.

For more, see Hawaii homeowners are protected from fraudulent mortgage rescuers.

For the perspective of a Hawaii real estate agent, who believes the new law is written in a way that may impede real estate salespeople in the legitimate conduct of arranging short sales for homeowners pursuant to standard listing agreements, see Hawaii Reporter: Mortgage Rescue Fraud Prevention -The Unintended Consequences of Hawaii's New Act 137.

Colorado Appeals Court Gives Homeowner The Boot; Rules Her Affluence Violates Deed Restrictions

In Aspen, Colorado, The Aspen Times reports:

• A local anesthesiologist who reportedly owns $10 million in real estate property has lost her legal battle with the affordable-housing office and has been ordered to move out of her apartment. The Colorado Court of Appeals this month ruled against Amanda Tucker, who was sued by the Aspen Pitkin County Housing Authority (APCHA) more than two years ago. Judge Jerry N. Jones ruled Tucker, who purchased an apartment at a foreclosure sale in 2005, had illegally lived in it because she didn’t meet the qualifications required by APCHA. Since the unit was in the affordable-housing system with publicly recorded deed restrictions, Tucker was asked to provide proof that she was a qualified buyer, officials said. Tucker never provided the required information, officials said.(1)

For more, see Court: Doc must leave apartment (Court of Appeals rules anesthesiologist must move from affordable unit).

See also, Housing program still ‘under serious attack’:

• Local housing officials are celebrating a recent court ruling that is seen as validating the Aspen and Pitkin County affordable housing program. But the housing office’s attorney said this week that the Aspen/Pitkin County Housing Authority — which oversees an inventory of rental and for-sale units that numbers in the thousands — is not out of the woods yet. “The housing program’s been under serious attack over the last year and a half,” said attorney Thomas Fenton Smith, who represents the housing office in court. Smith said there currently are six cases working their way through the courts, of which “all, or nearly all, are using the Telluride defense.”

For other reports on this story, see:

• A welcome victory for the housing program,
• Doc fights to keep housing unit (Appeal expected in eviction case).

For story updates, see:

• (2-24-09) Local housing scofflaw gives up cheap unit,
• (2-5-09) Housing authority not backing down in dispute with local.

(1) According to the story: (a) at the time Tucker bought the unit at Ritz-Carlton, at Aspen Highlands Village, she owned seven pieces of real estate in Hawaii with a reported value of $10 million, according to public records; (b) APCHA originally claimed that Tucker didn’t complete an application in order to qualify for ownership of the Category 3 housing unit, which puts a $91,000 cap on yearly earnings for owners with two dependents. Additionally, their net assets cannot exceed $150,000.

Trump To Rescue McMahon Home In Foreclosure; Proposed Deal Involves Sale Leaseback

In Beverly Hills, California, the Los Angeles Times reports:

• It's "The Donald" to the rescue. Mega-developer and TV personality Donald Trump has agreed to buy Ed McMahon's Beverly Hills house for an undisclosed amount and allow McMahon to continue living in it. Details of the deal are still being ironed out. [...] McMahon, 85, was facing foreclosure within two weeks on his Beverly Hills home of 18 years. The aging television icon, who was Johnny Carson's sidekick for three decades, defaulted on $4.8 million in mortgage loans with Countrywide Financial Corp. He said in interviews that he was unable to work because of a neck injury that occurred about 18 months ago. Trump said he stepped in because helping McMahon "would be an honor." His plan is to buy the home from the lender and lease it back to McMahon.

For more, see Donald Trump to buy Ed McMahon's house (Trump will allow McMahon, who was facing foreclosure, to continue living in the home).

Loan Servicer Screw-Up Results In Erroneous Charges To Homeowner; Channel 2 "Problem Solvers" Comes To Rescue

In Okmulgee County, Oklahoma, KJRH-TV Channel 2 reports:

• [A] couple of months after buying her home, Sharon [Whitecloud] applied to have her mortgage company stop collecting money for her tax and insurance escrow account. She wanted to pay those bills herself. [...] Sharon soon received a letter, saying her request was approved.

• So she started paying her monthly mortgage payment, less the previous escrow amount. [...] But several months later, Sharon started getting letters saying she was delinquent, and owed several thousand dollars. The mortgage company said she hadn't been paying enough into her escrow account, even though she had that letter waiving the escrow requirement. Sharon says she tried unsuccessfully for months to get someone to listen.

• Why did her problem get so complicated? The company that waived escrow sold Sharon's mortgage, and her new company says it didn't get the correct records, and the situation snowballed out of control. [...] Finally, Sharon called the [Channel 2] Problem Solvers [who] got in touch with both mortgage companies involved in the situation. It took a lot of calls over many weeks, but eventually it all worked out for Sharon, and it worked out better than she ever imagined. [...] Thousands of dollars of incorrectly charged late payments and penalties were erased from Sharon's account.

For the story, see Mortgage mistake almost causes foreclosure. questionable mortgage servicing practices tactics xero

83 Year Old Mother Sues Son For Allegedly Tricking Her Into Signing Mortgage On Her Home

In Beverley, Massachusetts, The Salem News reports:

• A grand jury has indicted him on firearms, drug and explosives charges. His neighbors have won an injunction barring him from their upscale waterfront condo complex. And now Robert Cohn's own family has filed a lawsuit accusing him of conning his elderly mother into taking out a mortgage on her own home to pay for Cohn's condo. The lawsuit, filed Monday in Salem Superior Court, also alleges that Cohn, 56, has fraudulently transferred ownership of [his] Tuck's Point condo, where he was arrested in March, to his former wife, who plans to sell it to pay for Cohn's legal defense.

***

• Four years ago, Cohn, who has been in custody since March, allegedly convinced his now 83-year-old mother to sign a promissory note and other mortgage documents on her Swampscott home, falsely telling her she was co-signing for a mortgage on his own condo, the lawsuit alleges. He also allegedly forged the signature of his sister on the documents. His sister's name is on his mother's home, as well.

***

• Cohn still owes his mother $59,000 on the mortgage he tricked her into taking out on her own condo and another $85,000 in credit card bills and cash he withdrew from her account, according to the lawsuit. [...] Cohn has made no payments on the mortgage since he was locked up, putting his mother's home in jeopardy of foreclosure.

For more, see Man accused of swindling mom (Suspect was indicted earlier this year on drugs, explosives charges).

Doc Stamp Confusion Holds Up Short Sale Closings In Florida

In Florida, The Tampa Tribune reports:

• As Florida's coffers shrink in the face of a dour economy, confusion over a tax statute threatens to choke the flow of home sales at a time when the state is struggling under the burden of millions of unsold properties.

***

• In typical transactions, the law is clear about paying taxes [aka documentary, or "doc" stamps] on the price of the property, but as lenders agree to more short sales - allowing troubled owners to sell homes for less than the mortgage and writing off the rest - there's disagreement over how much tax to charge. Some say the tax should be charged on the lower price, a practice that is standard across the state.

• Others wonder whether the tax should be based on the amount of the mortgage. Although the difference may add up to only about $300 on a typical short-sale transaction, multiply that by hundreds of thousands of properties across the state and the impact is substantial.

For more, see Tax 'Mess' Muddles Short Sales Of Homes.

Legal Services Of Northern Virginia To Launch Foreclosure Legal Assistance Project

In Northern Virginia, The Blog of Legal Times reports:

• Legal Services of Northern Virginia (LSNV) is launching a new program designed to help low-income homeowners facing foreclosure. The Foreclosure Legal Assistance Project (FLAP) is designed to provide a range of legal assistance. Potential clients call LSNV to make an appointment to meet with an attorney and housing counselor. The three review the homeowners’ financial information and possible legal solutions. The attorney and housing counselor may also offer advice about options lenders may accept to prevent a foreclosure.

***

• FLAP is similar to other programs around the country including the Foreclosure Prevention Pro Bono Project in Maryland and the Foreclosure Prevention Collaborative Initiative in Boston.

For more, see Foreclosure Program to Help Low-Income NOVA Homeowners.

Military To Pick Up Moving Tab For Servicemembers Renting From Landlords In Foreclosure

In Washington, D.C., Air Force News reports:

• A new change to the Joint Federal Travel Regulations authorizes the military to pay to move servicemembers and their families whose landlords default on property the military members are renting. [...] The change is retroactive to July 30, the date President Bush signed the Housing and Economic Recovery Act of 2008. [..] The federal regulation change is designed to help military servicemembers forced to relocate locally when landlords default on their mortgages, [a spokeswoman] said. It does not apply to military members who own their own homes and default on their loans.

For more, see Travel regulation change protects renters whose landlords default.

See also:

• Army Times: DoD moves to protect renters from foreclosure,
• Army Times: New law helps renters forced out by foreclosure,
• Official memorandum announcing change. TenantRentSkimmingAlpha Servicemembers Civil Relief Act