Wednesday, October 15, 2008

Chicago-Area Sheriff Moves Closer To Resuming Foreclosure Evictions

In Chicago, Illinois, the Chicago Sun Times reports:
  • Cook County Sheriff Tom Dart said he's a step closer to ending his prohibition on foreclosure evictions, a move that grabbed national media attention last week. Cook County judges on Tuesday began using a new court document for foreclosure evictions that specifically names tenants living at the foreclosed property and states how long they are allowed to remain in units -- the length of their lease or 120 days, which ever is shorter -- before deputies haul out their belongings.

  • The new language in court eviction orders aims to quell Dart's concern that renters might not get proper notice their landlord had lost the property in foreclosure.

For more, see Dart a step closer to resuming evictions.

Another Upfront Fee Foreclosure Rescue Operator Faces The Heat As Ohio AG Files Civil Suit Alleging Violations Of Multiple State Laws

In Wood County, Ohio, WNWO-TV Channel 24 reports:
  • In a continuing effort to fight consumer fraud fueled by the mortgage foreclosure crisis, the Ohio Attorney General filed a lawsuit Monday to stop a mortgage rescue scam from victimizing consumers in Auglaize, Hancock and Wood counties.

  • The lawsuit is based on consumers who complained that Schmidt and Dwelling Assurance led them to believe that they could help save their homes. Instead, the complaint alleges the defendants took the homeowners’ money up front, without performing any services to stop the foreclosures.

For more, see Attorney General sues mortgage rescue company.

To view the lawsuit, see State of Ohio v. Schmidt.

Minnesota Feds Probe Alleged Mortgage Scam Involving Condo-Converted Buildings That Left Straw Buyers Holding The Bag

In Minnesota, the Minneapolis Star Tribune reports:
  • Federal officials are investigating a Hastings couple in a new twist on mortgage fraud -- converting apartment buildings in Rochester, Sauk Rapids and Spicer into condominiums and then allegedly using phony buyers and bogus bank records to secure more than $5.5 million in financing.

***

  • The leaders of the alleged scheme, James and Teresa Hoffman, are accused by the FBI of selling dozens of condos "at substantial profit" to a handful of buyers who never intended to live there and never really had to pay for them.

  • Instead, the couple supplied the buyers' downpayments, propped up their bank accounts and falsified their mortgage applications, the FBI alleges. They then used rent from the condos to cover the straw buyers' mortgage payments, according to a search warrant affidavit filed in federal court.

For more, see New twist on mortgage fraud: Did rent money 'prop it all up'? (The FBI is investigating mortgage fraud that allegedly left straw buyers of condominiums holding the bag. No one has been charged).

Sacramento Feds Indict Two In "Cash Back" Straw Buyer Scam Involving $11.3M+ In Fraudulently Obtained Loans, 16 Homes

In Northern California, The Sacramento Bee reports:
  • A "cash back" mortgage swindle involving in excess of $1 million in stolen funds and more than $11.3 million in fraudulently obtained loans on 16 homes in the Sacramento region was alleged Friday in a federal indictment. Derek Davis of Sacramento, described in court records by those who have dealt with him as a smooth-talking con artist, and Dino Rosetti, a Roseville mortgage broker, are charged in the indictment. They are accused of inflating purchase prices, securing 100 percent financing with bogus paperwork, and then kicking back part of the money to straw buyers.

***

  • The kickbacks were either concealed from the mortgage lenders or falsely disclosed as credits meant for improvements to the properties, the indictment states. The kickbacks ranged from approximately $42,000 to nearly $138,000 and totaled "in excess of $1 million," [Assistant U.S. Attorney Courtney] Linn said.

For more, see Fraud charged in home loans in three counties.

See also, U.S. Attorney press release: Two Indicted In "Cash Back" Mortgage Fraud Scheme.

Thanks to Tim McDaniel for the heads up on the story.

Monthly Payments For Criminal Restitution In Minnesota Developer's Straw Buyer Scam Could Go On For 660 Years

In Minneapolis, Minneosta, the St. Paul Pioneer Press reports:
  • A federal judge Thursday ordered five people and a defunct corporation to pay more than $5.4 million to victims in what has been called the state's biggest mortgage fraud case. Under the plan set up by U.S. District Judge Ann Montgomery, though, it'll take 660 years for the defendants to pay the restitution if each makes the minimum $150-a-month payment.

  • The money is a fraction of the $20 million to $50 million the government says the defendants scammed in the four-year con. The restitution amount — $5,467,705, to be exact — represents the total in claims filed by victims in the case.

  • Officials believe the scheme involved $100 million in fraudulent financing for 240 homes currently in some stage of foreclosure. The brains behind the scam were Michael Alan Parish and Ardith Ann Parish, a couple who lived in Eagan. Their company, Parish Marketing and Development Corp., had become one of the metro area's most highly regarded homebuilders.

For more, see Judge orders mortgage scammers to pay $5.4 million (Restitution set for five in massive mortgage fraud).

See also, Minneapolis Star Tribune: Judge orders Parish fraud ring to pay victims.

Go here for earlier posts on the now-defunct Eagan, Minnesota homebuilder Parish Marketing and Development.

Another Florida Court Moves To Mitigate Foreclosures; Creates Procedural Rules For Mediation / Loan Modification

In West Palm Beach, Florida, The Palm Beach Post reports:
  • [T]he pace of foreclosures prompted [Palm Beach County's] Chief Judge Kathleen Kroll to consult with judges, clerks, attorneys, lenders and housing counselors. On Friday, Kroll signed an order intended to make foreclosures on homesteaded property less painful and more efficient. The order goes into effect on Nov. 1.

For more, see New rules aim for smoother defaults.

For the court order, see 15th Judicial Circuit of Florida: Administrative Order No. 3.305 - 10/08 - In Re: Homestead Foreclosure Actions By Institutional Lenders.

Philly Uses Door-To-Door Program To Get Out Word On Foreclosure Diversion Program

In Philadelphia, Pennsylvania, The Philadelphia Inquirer reports:
  • [A]rmed with a list of homes headed for sheriff's sale, [Emily Carlson and Edith Dixon] the two community organizers from Southwest Community Development Corp. went door to door, escorted for safety by Philadelphia police officer Joseph Young. They handed out information about the city's new program to forestall foreclosures. Homeowners who've missed payments can get legal counseling and go to a court session aimed at working something out with their mortgage companies. [...] The city started the door-to-door program in May. It's making the extra effort, in part, to protect neighborhoods from blight.

For more, see Spreading hope for homeowners.

Tuesday, October 14, 2008

Firefighters Find Homeowner In Foreclosure With Gunshot Wound While Responding To House Fire; Detectives Are Treating Case As A Possible Suicide

In Pasadena, California, the San Gabriel Valley Tribune reports:
  • A Pasadena woman distraught over the pending foreclosure of her home may have lit her house on fire and killed herself, police said. Neighbors reported smoke coming from a home in the 1000 block of North Wilson Avenue shortly before 5 a.m. Monday morning. Firefighters arrived and found [the homeowner], 53, in her bed suffering from a gunshot wound. "Some of the neighbors said she was going to be evicted this weekend," said Lt. John Dewar, the detective investigating the case. "We're looking at this as possibly a reason this tragedy occurred."

For the story, see Woman distraught by foreclosure may have killed self, burned home.

See also, Los Angeles Times: Pasadena woman facing eviction may have killed herself.

Go here for other posts on foreclosures and suicide. suicide homeowner foreclosure zeta

Flint-Area Sheriff Declares Two Week Eviction Moratorium; Expresses Concern Over Unwitting Tenants Renting From Landlords In Foreclosure

In Flint, Michigan, WJRT-TV Channel 12 reports:
  • Amid a national mortgage meltdown, Genesee County's sheriff is taking an unusual step to fight foreclosure. Sheriff Robert Pickell says renters won't be evicted for the next two weeks. The eviction moratorium is drawing fire from landlords and praise from tenants.

***

  • Last week, the sheriff in Chicago announced a similar moratorium. [...] Pickell says his deputies evict 50 to 60 families a week. About five of those, he says, are renters who have paid their bills on time.

For the story, see Local sheriff puts halt on evictions (Controversial moratorium will last two weeks).

See also, The Flint Journal: Foreclosures prompt Genesee County Sheriff Robert Pickell to call off evictions of renters.

For story update, see Genesee County moratorium on evictions scaled back to include only renters in foreclosed homes. BetaTenantRentSkimming

State Attorneys General Urge Lenders To Follow Countrywide Loan Modification Model

Legal Newsline reports:
  • Attorneys general from 10 states are coordinating efforts to shore up the country's mortgage crisis following news that the rate of foreclosures continue to rise. On Wednesday, a task force - The State Foreclosure Prevention Working Group -- that includes attorneys general from Illinois, California, Arizona, Ohio, Texas, Iowa, North Carolina, Colorado, Massachusetts, Michigan issued a letter to 16 mortgage lending companies urging them to follow the loan modification model put forth in the multi-state settlement with Countrywide Mortgage Corp., announced on Monday.

For more, see Foreclosure workouts not working, AGs tell banks.

Foreclosing Lenders Getting Hammered In Chula Vista; Fines From Blight-Prevention Ordinance Soar; Law May Be Nat'l Model As Other Cities Follow Suit

In Chula Vista, California, the San Diego Union Tribune reports:
  • [O]ver the past year, the [Chula Vista blight-preventio, foreclosed home] ordinance written by [city code-enforcement manager Doug] Leeper has become a national model for communities overwhelmed by spikes in foreclosures, analysts say. Hit hard by the mortgage market meltdown, Chula Vista has taken a strong stance against lenders and loan servicers who allow abandoned houses to become neighborhood eyesores.

***

  • So far, the city has levied $850,000 in fines and penalties and collected a little more than $200,000. In addition, Chula Vista has brought in about $77,000 through vacant-home registration fees imposed by the ordinance. Uncollected fines become liens against foreclosed properties, payable at resale.

***

  • Leeper said more than 300 jurisdictions nationwide have contacted him to learn more about the ordinance over the past year. Although most are in California, inquiries have come from such distant cities as Boston, Milwaukee and Dallas.

For more, see Blight-prevention law emerges as a national model (Chula Vista forces lenders to maintain foreclosures).

Maryland Builder Charged With Pocketing $1M+ Of Customer Money & Failing To Construct Homes

In Prince George's County, Maryland, The Gazette reports:
  • Three people were indicted Thursday on charges of accepting more than $1 million for homes in Upper Marlboro that were never built, according to the Office of the State's Attorney for Prince George's County.

***

  • [Leon and Emma Coleman, who ran a company called Opportunity Investment Group] face 57 counts of theft over $500 and charges of violating the state's Homebuilder Act, [...]. Kathy Ridley of Ellicott City, who allegedly vouched for the Colemans' reliability and helped their clients secure bank loans, faces 13 counts of theft and conspiracy [...].

***

  • The Homebuilder Act requires builders to keep clients' payments in escrow accounts that are separate from their personal accounts and to hold the funds in trust for their clients. "This is our first foray into the homebuilder stuff from the criminal side," said [Assistant State's Attorney Doyle] Niemann. "We prosecute somebody who mugs somebody on the street for $50. Here these people lost a million."

For more, see Homebuilders, broker indicted for not developing Upper Marlboro lots (Duped homebuyers left with thousands in debt and no house to show for it).

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

Utah Builder Gets Three Months In Jail For Stiffing Subs, Resulting In Construction Liens Being Slapped On Customers' New Homes

In Salt Lake County, Utah KUTV Channel 2 reports:

  • The Salt Lake County developer who was accused of jilting both homeowners and a contractor is spending 3 months in jail. The sentence brings to an end our investigation after calls to Get-Gephardt from home buyers. [...] Calls came from people who had closed on mortgages to move into their brand new homes on South Mountain...only to find out contractors were charging them again because construction bills were not paid.

For the rest of the story (video only), see Jail for a contractor accused of bilking homeowners.

See also, Utah Attorney General press release: Home Developer Sentenced To Jail:

  • [J]udge [Judith] Atherton ordered [developer Brian K.] Brady to send $3,000 each month to the Attorney General's Office until the victims are made whole. The largest amount----$262,745---will go to the [Utah Residence] Lien Recovery Fund, a fund set up by the state to pay subcontractors and material providers when a general contractor fails to make payments for services and material for a home. Brady also must pay $61,506 to three subcontractors who could not recover from the Lien Recovery Fund.

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

Stiffing Subs In Wisconsin Can Land Builders In Jail, State High Court Holds

In June of this year, the Office of the Wisconsin Attorney General announced the decision of the state Supreme Court in a case involving the state's "theft by contractor" law.
  • State v. Angela and Matthew Keyes [2008 WI 54] involves the interpretation of Wisconsin’s theft by contractor law. Under the law, money paid to a prime contractor by an owner for work on a building contract is held “in trust” by the prime contractor until all “claims” by subcontractors have been paid. If the funds held in trust by the prime contractor are insufficient to satisfy the subcontractors’ claims, he must satisfy those claims proportionally. Any “use” of the trust fund by the prime contractor before all claims have been paid in full or proportionally in cases of deficiency is considered “theft” by the prime contractor under Wisconsin law.

  • The Keyes decision reiterates the basic principle that both owners and subcontractors are to be protected by the occasional self-dealing of unscrupulous prime contractors,” said Wisconsin Attorney General J.B. Van Hollen.

For the Wisconsin AG's press release, see Prime Contractor Commits Theft By Contractor If Payments Made By The Project Owner Not Used To Satisy Subcontractors First, Wisconsin Supreme Court Holds. StiffingContractorsZeta

Monday, October 13, 2008

NJ Homeowners Claim Fraud In Sale Leaseback, Foreclosure Rescue Lawsuit; Pattern Of Activity Should Qualify As Racketeering, Says Attorney

In Central New Jersey, the Asbury Park Press reports:
  • [Little Egg Harbor resident Michael] Moreno says he was stripped of nearly $70,000 in equity in the February 2006 [sale leaseback, foreclosure rescue] deal, and he faces eviction from the house he thought he saved. He also is one of two former homeowners suing [Robert] Heath and related companies in an attempt to undo deals they claim are fraudulent.(1) Their attorney, Kevin Carlin of Hamilton, said the documents on the deals list transactions that never happened, a violation of federal law. Carlin also said there are more than 40 similar real estate transactions involving Heath in the state. In the lawsuit, Carlin argues "the pattern" of activity should qualify as racketeering.

***

  • Deborah and Lawrence Mayo of Brick also have joined the lawsuit against Heath, and they also claim there was a fraudulent transaction. Carlin said at least three other families have contacted him about allegedly bad deals with Heath's businesses. Two of those families already were evicted from their homes, Carlin said.

***

  • "On paper it looks like a typical real estate transaction with a purchase and a sale, but when you look behind the paper — which is what courts of equity will do — what you see is that the transaction was actually the granting of an equitable mortgage; they were really just refinancing the property," Carlin said. "And they accomplished it by using an attorney who gave the appearance of a disinterested party while she was the wife of the principal [Heath]."

For more, see Eviction looming, man sues over deal (He, others say they feel cheated).

(1) According to the story, Heath's Marlboro-based company, MGT Group, would offer to sell the home back to Moreno at a later date.

71 New Charges Filed Against San Diego Suspects In Alleged "Land Grant" Foreclosure Rescue Scam

In San Diego, California, KGTV Channel 10 reports:
  • Five people accused of victimizing hundreds of San Diego County homeowners in a home foreclosure rescue scam were arraigned Friday on 71 new charges, including conspiracy and grand theft. Alleged ringleader William Hutchings, 62, his wife Xiaoke Li, 45, and Shawna Landis, 36, along with Diego Gil and Edgar Martinez, now face a total of 172 charges, including felony civil code violations alleging rent and foreclosure fraud, said Deputy District Attorney Stephen Robinson. The additional charges reflect counts against new victims and so-called "rent skimming," the prosecutor said.

***

  • At a hearing in May, Robinson said the defendants allegedly offered to help homeowners keep their property by placing them in "land grants," when in fact the transactions were bogus and left the victims even worse off than they were before.

  • Two methods were used to get owners of residences in foreclosure to participate in the so-called land grant program, Robinson said. One method required homeowners to pay a one-time fee of up to $10,000 to put their property in a land grant. The second method was a lease-back scheme in which homeowners transferred their property to the defendants and then paid rent to stay in their homes. In both scenarios, homeowners were eventually foreclosed on anyway and evicted and retained no legally recognized title to the property. In addition to losing their homes, the victims were swindled out of hundreds of thousands of dollars, authorities said.

Source: New Charges Filed In County Foreclosure Scam.

WaMu Next In Line For San Diego As City Attorney Files Civil Suit Alleging Unlawful Lending Practices; Another Suit To Follow Against Unnamed Lender

In San Diego, California, XETV Channel 6 reports:
  • City Attorney Michael Aguirre filed a lawsuit Friday against Washington Mutual, alleging that the bank engaged in unlawful subprime mortgage lending practices. The lawsuit seeks civil penalties and an injunction to stop further lender foreclosures on subprime mortgages statewide.

***

  • It is the second lawsuit filed against a major mortgage lender by the San Diego City Attorney's Office in recent months. Aguirre said his office will bring another lawsuit against an undisclosed home loan company by Tuesday. [...] Aguirre sued Countrywide Financial Corp. and new parent company Bank of America in July, also alleging unlawful lending practices.

For more, see San Diego Sues Washington Mutual for Predatory Lending.

For a copy of the lawsuit, see People of the State of California v. Washington Mutual Inc.

Mississippi Homeowner Files Suit Accusing Freddie, Fairbanks Of Bad Acts; Loses Home To Foreclosure Despite Having Been Given Payment Plan, She Says

In Hattiesburg, Mississippi, the Hattiesburg American reports:
  • A Forrest County woman claims Freddie Mac, the federal home mortgage corporation, unlawfully foreclosed on her property. Lisa Willis said [it] failed to return the property to her after she received a financial settlement from the corporation and agreed to a deferred payment plan on her mortgage, according to court documents filed Tuesday in U.S. District Court in Hattiesburg. Court documents state that Willis' home loan was serviced by Fairbanks Capital Corp. on behalf of Freddie Mac.

***

  • Willis claims in the lawsuit, which represents only one side of the issue, that Fairbanks Capital Corp. imposed and collected "unnecessary and excessive fees and charges not authorized by the loan documents or by applicable law." [...] Willis said in the lawsuit that the foreclosure should be set aside and the property titled in her name.

For more, see Woman files lawsuit against Freddie Mac.

Failure To Decontaminate Homes Busted As Meth Labs Shocks Subsequent Homeowners

In Jefferson County, Missouri, the St. Louis Post Dispatch reports:

  • Jason Dowdell and Michelle DiLorenzo thought the three-bedroom ranch along a quiet, winding Jefferson County road would be the perfect place to start their life together. They envisioned a nursery in one bedroom. Toys in the backyard. Perennials in the planters. But all that was put on hold two years later when they learned the home was contaminated with enough methamphetamine residue to be condemned in more than a dozen states.

***

  • The Post-Dispatch tested five homes police busted for meth and where new families are living. [...] Months and, in some cases, years had passed since meth labs in the homes were busted, according to police reports. The tests revealed residue levels in all five homes high enough to be condemned in 13 of the 18 states.

***

  • Cleanup companies along with national and local health experts say it's common for meth labs that haven't been cleaned to test positive for residue — no matter how long after police busts. "It doesn't just go away over time," said Michael Frakes, who co-owns Chicago Crime Scene Cleanup LLC, a company the newspaper commissioned to collect samples.

  • The newspaper's findings shocked the residents, who said they did not know they were living in former meth labs until they were contacted by the Post-Dispatch.

For more, see Are you living in a former meth lab? (if link expires, try here).

Go here and go here for other posts on home-based methamphetamine labs. meth lab yak

Sunday, October 12, 2008

Bar Associations Ramp Up Nationwide Pro Bono Efforts In Fighting Foreclosures

The National Law Journal reports:
  • [L]awyers across the country are doing their share to help homeowners facing foreclosures stemming from the subprime mortgage crisis. From Massachusetts to California, bar associations have formed task forces and organized pro bono projects offering services such as hotlines and free consultations regarding foreclosures, an issue many lawyers say could only get worse.

For more, see Bar Associations Nationwide Bulk Up Pro Bono Efforts in Foreclosure Cases.

Lenders Are Failing In Obligation To Identify All Occupants In Homes When Requesting Foreclosure Evictions, Says Chicago-Area Sheriff

According to a press release from Cook County, Illinois Sheriff Thomas J. Dart's office:
  • [W]hile mortgage companies are supposed to conduct a basic due diligence investigation before requesting an eviction – identifying all occupants – sheriff’s deputies are regularly finding no work done by the mortgage company in advance, leaving the identifying work to deputies working at taxpayer expense.

  • These mortgage companies only see pieces of paper, not people, and don’t care who’s in the building,” Dart said. “They simply want their money and don’t care who gets hurt along the way. On top of it all, they want taxpayers to fund their investigative work for them. We’re not going to do their jobs for them anymore. We’re just not going to evict innocent tenants. It stops today.”

***

  • [Dart] wants mortgage companies to be forced to provide sufficient information to the Sheriff’s Office in order to conduct an eviction. That will provide greater notification to tenants that their building is in foreclosure and will require mortgage companies and their attorneys to do more leg work in advance of an eviction.

For more, see Cook County Sheriff Suspends Foreclosure Evictions (Move comes in wake of growing mortgage crisis).

In related stories, see:

San Bernardino Deed Theft Suspect Nabbed In Georgia

In San Bernardino County, California, the county district attorney's office recently announced:
  • [H]oward Jerome Edwards was arrested by the Henry County Police Department at his residence in Locust Grove, Georgia. Edwards was arrested on the outstanding felony warrant that included charges of forgery, identity theft, and filing forged documents with the San Bernardino County Recorder’s Office.

According to the DA's office press release, Edwards and co-defendant John Foster, 50, of Riverside, forged the victim's signature on a Grant Deed and Deeds of Trust for property located in Fontana. Subsequently, Edwards and Foster sold the Fontana residence for $675,000.

Source: Man Arrested in Georgia on Real Estate Fraud Charges.

NJ Lawmakers Consider Clipping Lenders With $2K Tax When Filing Foreclosure Actions

In Trenton, New Jersey, Reuters reports:

  • A panel of New Jersey legislators on Monday approved a measure to make mortgage lenders pay $2,000 before taking a homeowner into foreclosure. The measure, which is opposed by some banks, is believed to be the first of its kind. It joins a growing list of local and national efforts to stem a tide of home foreclosures.

For more, see NJ may bill mortgage lenders $2,000 per foreclosure.

See also, PolitickerNJ.com: McHose: Assembly Action Places The Response To A Crisis In The Wrong Hands.

  • [T]he legislation, A-2517, establishes a “Foreclosure Prevention Revolving Trust Fund” and collects a $2,000 tax on every foreclosure action initiated by a creditor against a borrower under a covered mortgage.

More On The Squeeze Felt By Homeowner Associations Resulting From Defaulting Homeowners

Several recent media reports describe the problems foreclosures are causing on the budgets of local homeowners' associations around the country, and its effects on those association members who are current on their homes' financial obligations:

  • Prince William County, Virginia: One homeowners group with almost 8,000 members, is losing $20,000 a month because of delinquent fees related to foreclosures. That amounts to $240,000 of its annual $4 million budget. See Associations Suffer as Homeowners Do (With Residents in Foreclosure or Not Paying Their Dues, Groups Face Hard Choices);

  • Cook County, Illinois: Residents of a condominium complex in unincorporated Maine Township are in danger of having their gas service shut off unless they can pay the $276,000 their homeowners associations owe Nicor gas. A soaring number of foreclosures within the complex are primarily to blame for the associations' inability to pay the gas bills. About 30 percent of the 354 units in the complex are vacant due to foreclosure. See Nicor threatens to shut off gas to 53 condos;

  • Miami, Florida: "I have a constant battle every month to pay a light bill, a phone bill, just the operational costs of the condominium," [condo Association President Colin] Hendrick told CBS4 Reporter Carey Codd. That's not to mention the $1,200 a month insurance bill for the building. Hendrick says the foreclosure crisis has forced the association to raise monthly fees for unit owners by about 35 percent. On top of that, they've charged thousands in special assessments to make repairs, like fixing the elevators. He says 60 percent of the unit owners are being forced to pay 100 percent of the fees. See Condo Owners Find Themselves Paying Extra Fees.

Saturday, October 11, 2008

Finance Company Attempts To Collect Payments On A Paid Off Mortgage; Threatens Foreclosure, Damages Homeowner's Credit In The Process

In Saratoga Springs, Utah, KUTV Channel 2 reports:
  • How would you like to pay off your mortgage, only to have some unheard of finance company ruin your credit ... And threaten foreclosure?? That's exactly what happened to a Saratoga Springs woman who decided to Get-Gephardt in desperation. The letter from M.G.C. Mortgage says the account is delinquent and they have the right to foreclose on the property...and they've reported it to our nation's credit bureaus!!!

For the rest of the story (video only), see Collections on a Paid Off Mortgage.

Mortgage, Tax Foreclosure, Poor Living Conditions Force Residents From Milwaukee Rooming House For Homeless With Psychiatric, Substance Abuse Problems

In Milwaukee, Wisconsin, the Milwaukee Journal Sentinel reports:
  • The City of Milwaukee has filed suit against Tri-Corp Housing Inc. for $11,691.24 in delinquent taxes on its troubled West Samaria rooming house [...]. By today the remaining 20 residents who have been living in the rooming house for the homeless with mental health or substance abuse problems are scheduled to be moved out of the facility, said Jeanne Lowry, director of the homeless outreach nursing center for the Red Cross.

***

  • The facility was closed after the Wisconsin Housing and Economic Development Authority filed foreclosure action against Tri-Corp last November when it stopped making mortgage payments. WHEDA, officials from Milwaukee County and others said it was in the best interest of the residents to close the facility because of poor living conditions and other problems, WHEDA officials said.

For the story, see City of Milwaukee sues rooming house over delinquent taxes (Tri-Corp. Housing’s West Samaria complex is emptying out).

$750K Too High A Price For Con Man In Attempt To Buy His Way Out Of Prison

In Rockland County, New York, The Journal News reports:
  • A 40-year-old Pomona man who funded his philanthropy by ripping off 26 people for $2.13 million was sentenced to state prison yesterday after failing on his April promise to make a $750,000 down payment to his victims. Acting New York State Supreme Court Judge Catherine Bartlett showed little leniency to Gregg Brie when sentencing him to three to nine years in prison on his April guilty plea to second-degree grand larceny. When pleading guilty April 16, Brie agreed to pay $750,000 by [his sentencing day] to avoid prison. He then would have had several years to pay back the remaining $1.282 million to three other victims.

Brie reportedly scammed one victim by saying the money he needed for his business would help people under foreclosure repay their mortgages.

Source: 'Con man' who couldn't pay goes to prison.

Tampa Section 8 Housing Counselor Sentenced For Pocketing $486K+ In Phantom Landlord / Phony Tenant Scam

The U.S. Attorney's Office in Tampa, Florida recently announced the sentencing of former Tampa Housing Authority (THA) official CALVIN COLEMAN, age 44, to 50 months’ imprisonment, 3 years' supervised release and was ordered to pay more than $486,000 in restitution. According to the announcement:
  • COLEMAN was employed as a "Section 8 counselor" with the Tampa Housing Authority ("THA"), and was responsible for administering the Housing Choice/Section 8 program. From approximately August 2003 to June 2005 COLEMAN used his position as a Section 8 counselor to pilfer over $486,000 from public funds for his personal use.

  • COLEMAN, along with other former THA officials CARLTON MILES and MARIO LOVETT, recruited numerous individuals to serve as bogus landlords, even though they neither owned approved rental properties nor had leases with legitimate Section 8 approved tenants. [...] Once the landlords had received their fraudulent subsidy check, COLEMAN took a substantial "kickback" from the proceeds.(1)

For more, see: Former Tampa Housing Authority Official Sentenced in Section 8 Fraud Scheme.

Go here, go here, and go here for posts on phony landlord rent scams.

(1) Since December 2007, nineteen individuals, including former THA officials CARLTON MILES and MARIO LOVETT, have been charged with theft of federal housing subsidy payments through the bogus landlord scheme. Seventeen of those defendants have pleaded guilty to felony charges. Only four remain to be sentenced. LOVETT was previously sentenced to 18 month’s imprisonment and MILES to 24 months’ imprisonment for their roles in the scheme. PhonyLandlordScamZeta

"Bank Owned - For Sale" Signs In Front Of Vacant Homes An Invitation For Copper Thieves?

In the Inland Empire region of Southern California, The Press Enterprise reports:
  • When the foreclosure notice comes and the homeowners leave, the welcome mat usually goes with them. But the sign that soon gets staked in the ground, screaming "Bank Owned," is increasingly sending a different kind of invitation than intended.

  • Metal thefts from vacant, foreclosed homes have spiked noticeably in the past six months, authorities say, and now are a near-daily occurrence throughout the Inland region, from Highland to the High Desert in San Bernardino County to the hard-hit suburbs southwest of Riverside.

***

  • It often comes after someone notices the sign advertising that the home has an absentee bank owner. "We've been trying to get them to stop throwing those up," said San Bernardino County sheriff's Deputy Laren Leichliter, who works with real estate agents as Highland's problem-oriented policing officer.(1) "That's a dead giveaway."

For more, see Inland foreclosed signs attracting copper thieves.

For other stories on stolen copper, see Copper Thefts I and Copper Thefts II.

(1) Given how big a problem copper theft has become nationwide, I hope real estate agents who insist on putting up these types of signs that attract attention to vacant foreclosures have their malpractice / errors & omissions insurance policies paid up. copper metal theft yak

Two Preschoolers Face Foreclosure As Father Sits In Jail For Allegedly Killing Mother

In Provo, Utah, Deseret News reports:
  • A bank and a title company have begun the foreclosure process on the Lehi home of David Ragsdale — where his two young children live with extended family. But the children's legal representative, guardian ad litem William M. Jeffs, is trying to get an extension for loan payments so he can sell the home and give the money to the children, not the bank.

  • "(They're) foreclosing against a 4-year-old and a 2-year-old whose mother was killed and father is in jail and all I'm asking for is a little bit of extra time to sell the house," Jeffs said. "I'm willing to make partial payments in the interim. I'm not asking for any concessions on the loan, we'll pay the loan in full. All I'm asking for is a concession on time."

***

  • Ragsdale can no longer make payments on the home — he's been in the Utah County Jail since Jan. 6, when police say he fatally shot his wife, Kristy, in the parking lot of an LDS meetinghouse in Lehi.

For more, see Attorney fighting foreclosure on Ragsdale home.

Friday, October 10, 2008

Word Of 10 Day Stay Comes Too Late; Woman Commits Suicide As Sheriff's Deputies Arrive At Foreclosed Home To Carry Out Eviction

In Sevierville, Tennessee, WVLT-TV Channel 8 reports:
  • A Sevierville woman apparently committed suicide as Sevier County Sheriff's deputies arrived to evict her family from their home, but the family attorney and relatives are asking a big question. Should deputies have been at the home at all?

  • Sevierville police say they went to the home of Jimmy and Pamela Ross on Monday to assist Sheriff's deputies in an eviction, but court documents shows a judge just Monday morning had given the Ross' at least 10 more days before they had to get out.

***

  • [The family's attorney Herb] Moncier says Ross' husband Jimmie was in court Monday morning fighting his foreclosure. Moncier says while Ross was there, Sevier County deputies were arriving at Ross's Lexington Place home. But Moncier says, "It appears clear from that file that there was not a writ of possession." In fact, court documents show, at the hearing Sevier County Judge Jeff Rader gave Ross 10 days more to appeal his case.

For more, see Moncier representing family after eviction led to apparent suicide in Sevier Co. (read story) (watch WVLT-TV video report).

Go here for other posts on police incidents at foreclosed homes.

Go here for other posts on foreclosures and suicide. suicide homeowner foreclosure zeta SheriffDeputiesForeclosureAlpha

Capital One, U.S Trustee Settle Charges Of Allegedly Screwing Over Consumers Filing Bankruptcy Over Credit Card Debt

The Wall Street Journal reports:

  • The U.S. Trustee Program, an arm of the Justice Department that monitors bankruptcy courts, settled with Capital One Financial Corp. on Thursday over allegations that its credit-card unit filed about 5,600 claims on credit-card debts that it wasn't entitled to and improperly received $340,000 from debtors as a result.

  • The settlement marks a victory for the U.S. Trustee Program, which in recent years stepped up its investigations into potential wrongdoing by some creditors against debtors in bankruptcy, following complaints from consumer advocates, law professors and judges that debtors weren't being adequately protected. That has been a particularly hot topic amid the current nationwide foreclosure crisis, in which many homeowners have turned to bankruptcy as a way to save their homes.

For more, see Capital One in Settlement Over Card Debt (may require subscription; if no subscription, go here, then click link for the story).

Suspicious Kalamazoo Real Estate Transactions Resulting In Foreclosure Of 50+ Homes Scrutinized In Local Media Report

In Kalamazoo, Michigan, an investigative report by The Kalamazoo Gazette describes a series of suspicious real estate transactions during 2006 & 2007 by a couple of local real estate operators that reportedly resulted in over 50 homes being lost in foreclosure, leaving lenders on the hook with more than $4.7 million in bad debt, according to the story.

For the story, see:

Homeowner Facing Foreclosure Pleased With IndyMac Loan Modification; Initiative To Become Industry Blueprint, FDIC Chair Hopes

BusinessWeek reports:
  • When Mark Akers got an offer from his mortgage lender in September to slash his monthly payments down to $2,500, from $4,200, he jumped at the chance. The Norco (Calif.) resident ran into trouble earlier this year after his wife got sick and he lost his job managing a factory that made doors for houses. The 53-year-old Akers could have become another foreclosure statistic if his bank, IndyMac, had not stepped forward to halve the interest rate on his fixed-rate loan to 3%, for a period of five years. In exchange, the bank will add Akers missed payments to the loan principal, hiking it to $611,000. Akers says he's grateful.

***

  • Akers is one of more than 3,000 borrowers who have signed on to a fast-track loan modification program launched by IndyMac, the insolvent California-based lender seized by the feds in July. [...] FDIC Chairman Sheila Bair is hoping the IndyMac initiative will provide a blueprint for the rest of the industry.

For more, see IndyMac's Fast-Track Mortgage Modification Program (It not only can stave off foreclosures but also provide a blueprint for how the industry can tackle troubled home loans).

Pittsburgh Landlord Facing Foreclosure Leaves Tenants In A Dozen Apartment Buildings With Uncertain Future

In Pittsburgh, Pennsylvania, KDKA-TV Channel 2 reports:
  • [T]here's word of a massive foreclosure on a dozen apartments buildings whose tenants who face an uncertain future. All of the buildings are owned by one landlord who owes the bank more than $2 million dollars. Sheriff sales are the end of the line in the foreclosure process. Now on the block are 11 apartment buildings sprinkled through the Southside and a few other neighborhoods and towns. All of them are currently owned by one landlord, Davin Gartley, the owner of Davin Investments, who is in default to the bank for some $2.4 million in loans.

For more, see Renters Caught In Middle Of Foreclosures (read story) (watch KDKA video).

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

Residents In Mobile Home Park In Foreclosure Get The Boot; Unfit For Human Habitation, Say Code Inspectors As Unpaid Bill Results In Water Shutoff

In Largo, Florida, WTVT FOX Channel 13 reports:
  • After a week without water, the city of Largo is shutting down a mobile home park and displacing eight families for health reasons. The red tags started going up first thing in the morning -- "unfit for human habitation" -- with a deadline of Thursday at noon for families to leave. Code inspectors blamed the landlord's unpaid water bill.

***

  • Court documents show the landlord's problems were more serious than an unpaid water bill. A $1.4-million foreclosure suit is pending in the Pinellas courts.

For the story, see City of Largo closes mobile home park. TenantRentSkimmingAlpha

Thursday, October 09, 2008

Tampa Feds Obtain Another Indictment Alleging An Equity Stripping, Foreclosure Rescue Scam; Extradition May Be Necessary For Fugitive-Suspects

In Tampa, Florida, The Bradenton Herald reports:
  • The operators of an alleged foreclosure-rescue scam that was active in Manatee County are facing federal criminal charges. A federal grand jury in Tampa last week indicted Jose Oliveri and Mario Quiroz each on 22 counts of conspiracy, wire and mail fraud, and money laundering, court records show.

  • The Tampa-area men were principals in 4 Solutions Inc., a Tampa company that promised to help distressed homeowners avoid foreclosure. Instead, they sold the homes to third parties, fraudulently obtained excessive mortgages and let the homes fall into foreclosure anyway, prosecutors said.

  • The alleged scheme netted more than $22.5 million, according to the indictment. Quiroz, also known as Juan Mario Quiroz del Valle and Juan Mario Quiroz del Valle Buch and Oliveri, also known as Jose Alberto Oliveri-Agurto, have not been arrested. They are considered fugitives, said Steve Cole, a spokesman for the U.S. Attorney’s Office in Tampa. “It’s likely they are in Peru and we will have to extradite them if they are,” he said Tuesday.

For more, see Charges pending in alleged scam.

For the indictment, see USA v. Quiroz, Oliveri.

Go here for earlier reports (and any available updates) on 4 Solutions.

For more on an earlier successful equity stripping, foreclosure rescue scam prosecution by the Tampa Feds, see:

Go here for other criminal prosecutions of foreclosure rescue operators.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Despite Bank Of America/Countrywide Settlement, Some Subprime Litigation Against It Continues

In Carson City, Nevada, The Mercury News reports:
  • A Reno lawyer is seeking class-action status for several U.S. District Court lawsuits alleging predatory practices by major lenders that have left his clients facing foreclosures and threatened sales of their homes. Bob Hager said Tuesday that the clients include his law partner, Treva Hearne, who is battling with Countrywide Financial representatives who moved ahead with foreclosure proceedings on three properties she owns even though she was current on all mortgage payments.(1)

***

  • The [Bank Of America / Countrywide] settlement, which according to preliminary Countrywide estimates could benefit more than 11,000 Nevadans, has many troubling aspects and basically amounts to "Countrywide promising to be a kinder, gentler predatory lender and the state agreeing to it," Hager said.

  • "It's a framework for the future resolution of those loans that are underperforming, but it does not deal at all in an equitable fashion with those victimized already by Countrywide," he added.

Hager reportedly said that, as part of his litigation effort, he wants to challenge a settlement announced Monday by Bank of America, which has acquired Countrywide and faces a lawsuit over alleged deceptive mortgage practices, according to the story.

For more, see Lawsuits allege predatory lending practices.

(1) According to the story, besides Countrywide, the lawsuits filed in federal court in Reno name Washington Mutual Home Loans, Impact Finance Group, Southern Pacific Mortgage Co., GRP Financial Services Corp. and IndyMac Bank. Hager said he also represents borrowers "victimized" by Wells Fargo, the article reports.

Moody's: Nearly One In Six Homeowners Are Underwater

The Wall Street Journal reports:
  • The relentless slide in home prices has left nearly one in six U.S. homeowners owing more on a mortgage than the home is worth, raising the possibility of a rise in defaults -- the very misfortune that touched off the credit crisis last year. The result of homeowners being "under water" is more pressure on an economy that is already in a downturn.

***

  • And having more homeowners under water is likely to mean more eventual foreclosures, because it is hard for borrowers in financial trouble to refinance or sell their homes and pay off their mortgage if their debt exceeds the home's value. A foreclosed home, in turn, tends to lower the value of other homes in its neighborhood. [...] After a housing slump that has pushed values down 30% in some areas, roughly 12 million households, or 16%, owe more than their homes are worth, according to Moody's Economy.com.

For more, see Housing Pain Gauge: Nearly 1 in 6 Owners 'Under Water' (More Defaults and Foreclosures Are Likely as Borrowers With Greater Debt Than Value in Their Homes Are Put in a Tight Spot).

Report: As Many As 54,000 NYC Tenants In Working Class Neighborhoods May Face Impact Of Foreclosure Squeeze On Private Equity Firms

In New York City, The New York Times reports:
  • In recent years, private equity firms that once rarely ventured outside Midtown Manhattan began investing in Harlem, the South Bronx, East New York and other working-class neighborhoods, paying top dollar for tenement buildings in the belief they could make big profits by replacing rent-regulated residents with higher-paying tenants.

  • But there is growing evidence that those investments are not paying off. Tenant advocates and bond rating agencies say that many of those firms’ properties are in danger of foreclosure because optimistic profit projections have fallen short, leaving enormous gaps between the rent rolls and mortgage payments. As many as 54,000 of the 90,000 apartments acquired in those deals, or 60 percent, are at risk, according to a new report by the Association for Neighborhood Housing and Development, a nonprofit advocacy group for low- and middle-income tenants.

***

  • Tenant advocates say that the trend could lead to deferred maintenance and cuts in services, which could undermine surrounding neighborhoods. They also contend that because the loans were based on unrealistic revenue projections, rather than current rents, landlords would be able to make profits only by aggressively displacing tenants and then raising rents.

  • These predatory equity investors have dug a deep financial hole for themselves,” said Benjamin Dulchin, deputy director of the Association for Neighborhood Housing and Development. “But if policy makers allow the 54,000 affordable apartments that are at risk of default to go into financial and physical distress, then many communities will be dragged down into that hole with them.”

For more, see Mortgage Crisis Is Foreseen in Housing Owned by Private Equity Firms. TenantRentSkimmingAlpha

County Sheriff Suspends All Chicago-Area Foreclosure Evictions; Points To Problem Of Unsatisfactory Notice To Occupants As Reason

In Chicago, Illinois, the Journal Gazette reports:
  • The sheriff here said Wednesday that he's ordering his deputies to stop evicting people from foreclosed properties because many people his office has helped throw out on the street are renters who did nothing wrong. "We will no longer be a party to something that's so unjust," a visibly angry Cook County Sheriff Tom Dart said at a news conference. "We have to be sure that when we are doing this - and we are destroying some people's lives - we better be darned sure we're talking about the right people," Dart said.

***

  • Dart said that from now on, banks will have to present his office with a court affidavit that proves the home's occupant is either the owner or has been properly notified of the foreclosure proceedings.

***

  • He talked about tenants who dutifully pay their rent, then leave one morning for work only to have authorities evict them and put their belongings on the curb while they are gone. By the time they get home, "The meager possessions they have are gone," he said. "This is happening too often."

***

  • Dart said he believes banks are not doing basic research to determine that the people being evicted are, in fact, the homeowners. He said that in a third of the 400 to 500 foreclosure evictions his deputies had been carrying out every month, the residents are not those whose names are on the eviction papers. Nor, he said, are banks notifying tenants that the homes they're renting are in foreclosure. He added that when banks do learn the correct names of those living on foreclosed-upon property, their names often are simply added to eviction papers.

For more, see Chicago's Cook County won't evict in foreclosures.

See also, The New York Times: Sheriff in Chicago Ends Evictions in Foreclosures.

For more on the reported (up until now) ongoing problem of illegal foreclosure evictions in Cook County, Illinois, see: