Attorneys, Law Students From Seton Hall Pro Bono Program Intervene On Behalf Of Elderly Couple In Equity Stripping, Foreclosure Rescue Scam

In Newark, New Jersey, lawyers and law students from the Center for Social Justice (CSJ) at Seton Hall University School of Law have successfully vacated a foreclosure judgment against an elderly couple who were allegdly victims of a foreclosure rescue, equity stripping scam that resulted in a loss of approximately $400,000.00 in equity in their home, which ended up in foreclosure. CSJ believes the scam has been perpetrated on numerous other distressed homeowners in the area. The homeowners will now, along with CSJ, defend against the foreclosure.(1)

For the CSJ press release, see CSJ Stays Foreclosure, Charges Mortgage Scam.

(1) According to the press release, the Counterclaim filed on behalf of the elderly homeowners by CSJ against Third-Party defendants (a disbarred lawyer, a subprime lender, and others) includes, in part, a petition for relief for multiple violations of:

• New Jersey Consumer Fraud Act ( N.J.S.A. § 56:8-1, et seq.),
• New Jersey Civil Racketeer Influenced and Corrupt Organizations Act ( N.J.S.A. § 2C:41-2( c ) ),
• New Jersey Fair Foreclosure Act ( N.J.S.A. § 2A:50-56, et seq. ), and,
• Federal Truth in Lending Act ( 15 U.S.C. § 1601, et seq. ).

Reportedly also included in the countersuit are a number of common law claims. The pleading also charges that the foreclosing entity, assignee U.S. Bank:

• Lacks standing to enforce the Note securing the Property because U.S. Bank is not a proper assignee and holder of the Note pursuant to N.J.S.A. § 12A:3-201 and Article 3 of the Uniform Commercial Code ( “UCC” );
• Is not a “holder in due course” and therefore is vicariously liable for the elderly couple's claims and defenses against the originators of the mortgage, Credit Suisse Financial Corporation and its agent, ANM Funding, LLC;
• Lacks standing to seek foreclosure because the mortgage was not assigned to it until after about four months after the foreclosure action was filed. N.J.S.A. § 46:9-9 requires mortgage assignments to be in writing.

Failure To File Proper Paperwork A Stumbling Block For Plaintiffs In Credit Card Suits As Well As Mortgage Foreclosures

In Erie, Pennsylvania, the Erie Times News recently ran a story on how some individual consumers are fighting back against large finance companies in debt lawsuits:

• [A] recent ruling in Erie County Court, as well as rulings in U.S. Bankruptcy Court in Erie and in Pittsburgh, show how judges are forcing credit-card companies, banks and mortgage companies to play by the rules, even as those corporations are desperate to collect on debts in these desperate times.

• The fine print -- all those regulations enumerated in tiny words in credit-card contracts and mortgages -- apply not only to you, the consumer. The banks and credit-card companies must follow them too. And, with the help of vigilant judges, "they are starting to," said Erie lawyer Lori R. Miller.

***

• Erie County Judge Shad Connelly, citing Pennsylvania law, agreed with Miller and threw out a suit over a claimed debt of $21,305, including more than $3,000 in interest, on a Bank One credit card. Connelly said the plaintiff, a debt-collection company called Unifund CCR Partners, failed to file the proper paperwork(1) and filed an amended version of its suit too late.(2)

For more, including how two bankruptcy judges in Erie and Pittsburgh are holding lenders feet to the fire in home foreclosure actions, see In some area debt cases, small print has yielded big help.

(1) Among the documents lacking, Connelly said, were a complete list of the dates and merchants for the disputed charges; the contract or credit agreement that Anderson would have received with the disputed credit card; and the appropriate documentation showing how Unifund purchased Anderson's claimed debt from another company, First USA Platinum.

(2) Reportedly, Judge Connelly gave Unifund a chance to file a corrected suit, though attorney Anderson could argue that any new civil action violates the four-year statute of limitations in her case.

Boston Legal Aid Firm Wins $54K Jury Verdict For Tenant Illegally Booted In Foreclosure Eviction; Now Seeks Triple Damages, Attorney Fee From Servicer

In Boston, Massachusetts, The Boston Globe reports on William Allen, a local man who, with the help of local law students at Harvard Legal Aid Bureau, fought back against a mortgage loan servicing company in a case involving an illegal foreclosure eviction.

• [I]n January, after the Bank of New York, which owns the property, sent an eviction notice, Allen fought back. He filed a counterclaim, arguing that by changing the locks the bank tried to paint him as a squatter and that it intentionally did not turn on the water and heat, because it wanted him to leave.(1) Last month, after a three-day trial in Boston Housing Court, a jury awarded Allen $54,000 for his ordeal.(2)

***

• Lawyers at the Harvard Legal Aid Bureau, which represented Allen, say that it's a rare victory for a tenant in a post-foreclosure case and that the verdict has caught the interest of legal services groups nationwide.

• "The impact of this case is that the banks now know that if they engage in extrajudicial practices to gain possession of a foreclosed property it can cost them dearly," said Verner Moore, a lawyer and clinical instructor at the Harvard Legal Aid Bureau.

For more, see Vindication after eviction ordeal (Jury backs tenant in foreclosure dispute).

Go here for more on the law students at the Harvard Legal Aid Bureau urging tenants in foreclosed homes to fight back against careless/reckless mortgage companies seeking illegal evictions.

(1) The story states that, after experiencing a loss of heat and water to the premises, Allen turned to WilmerHale Legal Services Center in Jamaica Plain - one of two legal services programs run by Harvard. A law student reportedly fired off a letter to the Bank of New York, saying that Allen lived there and urging the bank to get the heat and water turned back on. Allen alleges that the bank instead changed the locks and sent police after him.

(2) Reportedly, the case is not over. A hearing is a set for Jan. 30, when Allen's lawyers will ask a judge to double or triple the award because, they contend, the bank willfully and knowingly failed to act responsibly as a landlord. They will also seek attorneys' fees. ThetaTenantRentSkimming ForeclosureLockOuts

Unlicensed Practice Of Law Becomes An Issue With Some Loan Modification Firms

A recent story in The Washington Post raises an issue that could begin taking hold in targeting certain loan modification firms for engaging in illegal conduct when seeking out financially distressed homeowners:

• [T]he pitch companies make varies. But one approach includes paying a company to challenge the legality of a loan -- a process housing experts say can be long and complicated.

• Vienna-based Mortgage Analysis and Consulting, for example, charges $150 for a consultation and $250 to $500 for a preliminary audit. If the audit finds problems with the loan document, Mortgage Analysis will refer the borrower to a lawyer, who may charge an additional $2,000 retainer. If the lawyer requests a more in-depth audit, Mortgage Analysis charges up to $1,750, which clients can pay in installments.

***

• Virginia's State Bar is investigating a complaint that [the firm's founder Jose] Semidey has illegally practiced law.(1) Semidey said he makes clear he is not a lawyer and refers clients to a list of lawyers he has compiled.

• One of Semidey's former clients, Edwin Monge, said he became concerned that he would no longer be able to afford the payments on his Woodbridge townhouse after the adjustable interest rate rose and the payments increased. The home's value had tumbled, making it impossible for him to refinance. Monge said he met Semidey through a friend and eventually paid him $7,000, some of which was to be used to pay a lawyer.

For more see Firms Charge Thousands To Modify Mortgages (Nonprofits Offer Service For Free, Advocates Say).

Go here and go here for other posts on issues relating to attorneys, loan modifications, and the unlicensed/unauthorized practice of law.

(1) Unlicensed or unauthorized practice of law has been raised as an issue in at least two recent civil lawsuits against loan modification firms, one by the Tennessee Attorney General (press release; for copy of lawsuit, see State of Tennessee v. Patrick and Patrick, LLC, et al.), and the other by the Florida Attorney General.

In addressing what constitutes the unlicensed practice of law, the Florida Supreme Court, in The Florida Bar v. We The People Forms And Service Center Of Sarasota, Inc., 883 So. 2d 1280; (Fla. 2004), relied on the following survey of its prior decisions in holding that certain activities of a non-lawyer constituted the unlicensed practice of law:

• Florida Bar v. Catarcio, 709 So. 2d 96 (Fla. 1998) (holding that a nonlawyer who has direct contact with individuals in the nature of consultation, explanation, recommendations, advice, and assistance in the provision, selection, and completion of legal forms engages in the unlicensed practice of law);

• Florida Bar v. Becerra, 661 So. 2d 299 (Fla. 1995) (enjoining a nonlawyer from advertising in any fashion that may lead a reasonable lay person to believe that the nonlawyer may offer to the public legal services, legal advice, or personal legal assistance);

• Florida Bar v. Consol. Bus. & Legal Forms, Inc., 386 So. 2d 797 (Fla. 1980) (holding that a corporation engaged in the unlicensed practice of law where its officers and stockholders were nonlawyers with no legal training who supervised and maintained a degree of control over the legal services it furnished through its lawyer employees and noting the inherent conflict of interest between the legal needs of the client and the monetary policy of the corporation and how such a business structure permits unlicensed and unregulated persons to profit from the providing of services which by law they are prohibited from providing).

Where loan modification firms offer and conduct, for homeowners, reviews of mortgage loan and other legal documents for the purpose of determining whether said documents are in compliance with the applicable lending, consumer, and other laws (Truth in Lending, HOEPA, RESPA, etc.), such services seem to fall squarely within the scope of the above survey of Florida laws and, consequently, could constitute the unlicensed / unauthorized practice of law in Florida. Assuming other states have similar case law in this regard, it may only be a matter of time before these types of non-attorney loan modification firms offering "legal reviews" or "legal analyses" of loan documents find the legality of their services being challenged throughout the country as unlicensed practice of law. UnauthPractOfLawKappa

100+ Borrowers Ripped Off By Ex-Bank Exec, Mortgage Broker For Inflated Loan Fees Entitled To Restitution, Says Federal Court

In Sarasota, Florida, the Sarasota Herald Tribune reports:

• Federal appeals court judges ruled [earlier this month] that Coast Bank borrowers were indeed victims in the scheme that involved a former bank executive skimming money from their loans.

***

• In his argument, [Sarasota attorney Alan] Tannenbaum invoked the Crime Victims' Rights Act on behalf of 104 Coast borrowers who he says deserve to share in any restitution [in a related criminal case]. Those customers were overcharged in their loans, and [Coast's former executive vice president Philip] Coon and [Tampa mortgage broker John Robert] Miller pocketed the money, the attorney says. That excess charge was spelled out in their loan agreements.(1)

For more, see Court rules Coast loan holders were victims.

(1) In a related criminal case, Coon pleaded guilty last month to conspiracy to commit wire fraud and money laundering. Miller pleaded guilty in August. In their plea deals, each man will be ordered to pay more than $1.5 million in restitution.

Sloppy Lender/Servicer Leaves Judge Fuming, Homeowners Frustrated

A recent story in The New York Times describes how Wells Fargo left one federal bankruptcy judge fuming regarding a dispute the lender had with a homeowner couple over whether they had missed some of their required payments on their home loan. Wells Fargo claimed that the couple missed some payments but that, if they could present “valid, accurate and true copies” of the front and back of the checks they sent in, they would receive the proper credit.

What ultimately had the judge fuming was that, several months later, evidence came out that strongly suggested that the borrowers' purportedly missing payments to Wells Fargo were, in fact, received and processed electronically. That meant that the lender never returned the checks to the borrowers' bank, thereby making it impossible for the couple to provide the proof of payment that Wells Fargo had demanded in the first place. An excerpt from the story:

• [S]idney B. Brooks, the judge overseeing the case, was clearly dismayed by the bank’s performance. In his opinion, he fumed that Wells Fargo had asked the borrowers for canceled checks as proof of payment, even though such checks were often not available.

• Wells Fargo’s request for canceled checks was especially troubling, the judge said, given that the bank was a proponent of the 2003 law that allowed banks to stop returning canceled checks to customers.

• The only institution that could have the original checks is Wells Fargo, he concluded. “The payments have, evidently, been lost in a black hole of the creditor’s organization or through accounting mismanagement,” the judge wrote. “This is a major lender/mortgage loan servicer where the left hand does not know what the right hand is doing — the collection department does not know what the check processing and accounting departments are doing.”

• Because this is not the first time the judge has encountered problems in Wells Fargo’s operations, he is considering sanctions on the bank. “This dispute might portend a widespread abuse of collection practices or creditor overreaching,” he wrote, “demanding of debtors what it, the creditor itself, is unable to provide: accurate and reliable record keeping and billing practices.”(1)

Not surprisingly, Wells Fargo reportedly disgreed with the judge's conclusions.

For the story, see A Mortgage Paper Trail Often Leads to Nowhere.

For the judge's written decision, see Wells Fargo v. Burrier.

(1) According to the story, the attorney for the homeowners says that this kind of dispute is becoming more common in her practice and that borrowers wind up losing too often. “A lot of times clients don’t keep canceled checks or maybe their bank account was closed and they can’t go and get the proof,” she said. “The bank gets that extra money for as long as the debtor can keep it up and when they can’t they are pushed out of their homes.” SloppyForeclosuresAlpha

Foreclosing Lender Can't Prove Ownership Of The Note? So What's The Big Deal???

The following excerpt out of a recent article on MSNBC.com addresses the importance of establishing the ownership of a promissory note in foreclosure (or, for that matter, not in foreclosure):

• [M]aking an issue out of the actual ownership of the securitized title might strike some as a shameless stalling tactic aimed at abetting a debtor who, after all, owes the money. But [Florida attorney April] Charney said that if such basic legalities aren’t adhered to, a homeowner could pay his or her way out of a foreclosure jam only to wind up in another when a new plaintiff emerges claiming to own the debt. She described cases in which homeowners have been sued for foreclosure by two different trusts, each claiming they owned their house, and cases where trusts have been sent documents on the same case by two different servicers.(1)

***

• Bert Ely, a longtime analyst of the financial services industry and a scholar at the conservative Cato Institute who was among the first to predict the S&L scandal of the 1980s, said lenders may detest tactics like the ones Charney employs, but “this is well-established in bankruptcy practice, that you have to properly perfect the security interest, and if you haven’t, you’re screwed. … Debtors’ lawyers immediately start looking for flaws in how the debt is protected. Creditor attorneys always worry about this.”

• “It kind of boggles my mind that this is even an issue” in the nation’s current mortgage mess, he said. “I don’t understand how lawyers let this happen in the first place.” Mortgage-lending and servicing is “a matter of dotting the I’s and crossing the T’s. … That’s what puts the discipline in the process.”

For the story, see 'Angel' of foreclosure defense bedevils lenders (Florida attorney trains hundreds of others to help troubled borrowers). (for the entire story on one web page, try here).

(1) For an account describing this (apparently growing) phenomenon, see The Wall Street Journal Law Blog: Foreclosure Mess: Two Different Plaintiffs Claim to Own Same Mortgage.

According to the MSNBC story, Charney points out that, because of the way mortgages have been securitized, it’s often unclear who actually owns the debt, and further, found that in many cases, the originating lenders only pledged these loans and didn’t actually transfer ownership of them to the trusts that are supposed to hold them and issue the securities. KappaMtgDocsMissing

Colorado, California Collaborate To Shut Down Loan Modification Scams

Buried in a recent story in the Rocky Mountain News on a homeowner claiming to have been screwed out of about $3,000 by a loan modification firm is this excerpt:

• [I]n addition to the [16 subpoenas sent to loan modification companies in Colorado, California and Arizona, Colorado director of the division of real estate Erin] Toll also recently entered into what she calls an "unprecedented collaboration," with Jeff Davi, the division of real estate director in California.

• "(Davi) has agreed to work closely with us to shut down illegal loan modification companies that prey on consumers when they are most vulnerable," Toll said. "Mr. Davi is well aware of the problem and will do everything possible to ensure Colorado consumers are not harmed by unlicensed California companies."

***

• Davi, in a phone interview Tuesday, said he is "very pleased with our relationship with Colorado and Erin," and hopes to build similar relationships with state real estate divisions across the country, because the practices have become so widespread.

• "These companies are based everywhere," Davi said. "I heard of one yesterday where a 75-year-old California woman gave her last $2,000 to a company out of Massachusetts. It is the saddest thing I ever heard."

For more, see Loan modification firms causing more problems for homeowners.

Loan Modification Firms Beginning To Find Themselves In The Crosshairs Of Various Groups

The Washington Post reports:

• A growing industry has emerged to take advantage of the unprecedented wave of foreclosures, charging distressed homeowners for help negotiating better loan terms -- a service provided for free or for a nominal fee by many nonprofits.

• Such companies charge $500 to $2,500 or more and are drawing the ire of consumer advocates, regulators and lenders, who say many are just the latest version of foreclosure rescue scams and can make it more difficult for homeowners to get help.

For more see Firms Charge Thousands To Modify Mortgages (Nonprofits Offer Service For Free, Advocates Say).

Judges, Homeowner Attorneys Begin To Wonder How To Do A Loan Modification When Lender Can't Prove Ownership Of Promissory Note?

The New York Times reports:

• WITH home prices in free fall and mortgage delinquencies mounting, pressure to modify troubled loans is ratcheting up. But lawyers who represent candidates for modifications say the programs are hobbled by the complexity of securitization pools that hold the loans, as well as uncertainty about who actually owns the notes underlying the mortgages.(1)

***

• How can a loan be modified, these lawyers ask, if the lender cannot prove that it actually owns the note? More and more judges are asking the same thing about lenders trying to foreclose on borrowers.

For more, see A Mortgage Paper Trail Often Leads to Nowhere.

For posts that reference the failure of mortgage lenders and their attorneys to prove ownership of the promissory note when starting foreclosure actions, Go Here, Go Here, Go Here, Go Here, and Go Here.

(1) As the article points out, problems often emerge because these notes — which are written promises to repay the full amount of a mortgage — weren’t physically handled, legally transferred, or accounted for properly when they were bundled by Wall Street into pools or were subsequently transferred to other holders. Many of the notes are now missing. KappaMtgDocsMissing SloppyForeclosuresAlpha

Focus Of NYC Commercial Real Estate Market Shifting From "Bricks & Mortar" To Buying/Selling Secured Paper? More Lenders Look To Dump Mortgage Loans

In New York City, The New York Times recently ran a story on a reported "shift in the commercial real estate market, away from brick-and-mortar properties and toward the buying and selling of debt."

• [M]any lenders are looking to offload [their problem mortgage] loans because they need to cash out quickly, or because they are not in the business of selling real estate and lack the necessary resources and expertise. This means that commercial brokers, who regularly negotiated the acquisition and sale of properties, are now marketing mortgages and other loans.

• “I am being inundated with calls from banks who want to sell their loans,” said David Schechtman, a senior director at the commercial brokerage firm Eastern Consolidated. “In just the last few weeks, I have also collected a list of about 30 clients — primarily high-net-worth individuals, long-established real estate families and small opportunity funds — who want to buy up these loans.”

For more, see Loans on Distressed Properties Become a Burden and an Opportunity.

In related stories, see

• Crain's New York Business: Hundreds of NY properties in danger of failure (With 32 New York metro area commercial properties already in distress and another 236 troubled, investors will soon be able to capitalize on falling prices),
• New York Times: Downturn Ends Building Boom in New York.

New Pennsylvania Law To Make It Tougher For Deed Theft Scammers To Heist Homes

In Philadelphia, Pennsylvania and its suburbs, The Intelligencer reports:

• To the relief of real estate title companies and county workers, Pennsylvania Act 110, which regulates how a homeowner's deed is registered and recorded, took effect this month.

• Montgomery County Recorder of Deeds Nancy J. Becker says the new law not only streamlines the process among municipalities and counties, but also protects the new homeowner. “We're really delighted because, if for any reason, if there is a delay in recording a deed, the possibility of fraud being committed against that property increases,” said Becker, in her fifth year in office. “If people aren't paying attention and deeds aren't being recorded in a timely fashion, than things can happen.”

• In the gap between when a homeowner purchases a home and when the deed is recorded, a thief can obtain a copy of that deed and have it transferred fraudulently.

The story cites the recent example earlier this month of The New York Daily News, when they "stole" the $2 billion Empire State Building in 90 minutes in an effort to show how easy it is for crooks to make bogus documents, transfer deeds and take out mortgages.

For more, see New law helps limit deed fraud.

For an old NBC10 (Philadelphia) television story in which investigative reporter Lu Ann Cahn "steals" the homes of Pennsylvania Governor Ed Rendell, as well as the homes of the Philadelphia mayor and the Pennsylvania Speaker of the House of Representatives to highlight the deed theft problem in Philadelphia, see Stolen Homes.

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

1031 Exchange Intermediary Suspected Of Feloniously Pocketing $550K+ In Clients' Sale Proceeds Found Dead By Suicide

In Boulder Colorado, the Boulder Daily Camera reports:

• [K.C.] Schneider, who owns a commercial real estate firm in Boulder, said Wednesday he is [...] out $425,000 in real estate proceeds he gave National 1031 Exchange Service to hold while he closed on a new property.

***

• Schneider filed a complaint in October against the now-defunct holding company's owner, Debra Edwards, and earlier this month Boulder police issued a warrant for her arrest on suspicion of three felony counts of theft of more than $20,000.

• But the day before Edwards was to surrender to authorities, the 53-year-old certified public accountant and former board member of the Longmont Area Chamber of Commerce was found dead in her Longmont office. The Boulder County Coroner's Office said Wednesday that her Dec. 15 death was a suicide -- asphyxiation due to inhalation of helium.

• Edwards' death led Boulder police to close its criminal case against her. Schneider said that leaves him and two other National 1031 Exchange Service clients -- who also claim to have been bilked of tens of thousands of dollars -- out in the cold.

For more, see Suicide complicates money-recovery effort (Client says Debra Edwards' Boulder financial firm stole $425,000 from him).

Go here for other posts on problems with 1031 exchange intermediaries.

Go here, Go here, Go here, and Go here for other stories of trust account / escrow account theft of funds. EscrowRipOffAlpha

"Baby Mama" Accuses Ex-NBAer Of Forging Signature On Releases Of Lien For Child Support, Then Draining Equity From The Unencumbered Properties w/ Refi

In Mobile, Alabama, the Press Register reports on a civil lawsuit involving a former pro athlete and one of, what has been alleged to be a slew of, his babies mamas:

• Former pro basketball player Jason Caffey has been hit with a lawsuit accusing him of using forged signatures on legal documents to transfer property.(1) [...] Caffey put up the properties as part of a negotiated settlement in a child-support case.

• The plaintiff, Nicole Carter, is one of at least eight women with whom Caffey has had children, according to court records.

***

• Carter's lawsuit accuses Caffey of forging her signature on documents filed in Mobile County Probate Court on Feb. 28, 2007, and May 31, 2007, canceling liens on the properties. "Jason admitted in a newspaper interview that he signed it but that my client authorized it. She did not," said Carter's lawyer, Steven L. Terry.

• After canceling the liens, according to the lawsuit, Caffey transferred the properties to Marita Hansberry, who then refinanced them and sucked out the equity.

For more, see Caffey, former NBA player, accused of forgery (for the entire story on one page, try here).

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

(1) Reportedly, the lawsuit also names the woman to whom rental properties were transferred, as well as the notary public who witnessed the transaction and the title company that handled the refinancing of the properties. KappaDeedTheft

Refinance Scam Leaves SW Florida Sisters Facing Foreclosure

In Lee County, Florida, WINK News reports:

• Two Lee County sisters say they've been duped out of tens of thousands of dollars, all from a home finance scheme that now threatens to put their home in foreclosure. "We are good people, we are trusting people, and that's what they work on," said Kesrie Persaud, who thought she could trust a man who claimed to be looking out for her financial interests.

***

• Drained of their savings, the sisters now have another challenge: their mortgage, already higher after the scam, was sold to J.P. Morgan Chase, who's threatening to foreclose.

For the story, see Sisters lose thousands in home finance scam.

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

Judge Tells Convicted Foreclosure Rescue Scammer To "Take A Hike" In Response To Request For Relief From Sentence

In Newark, Ohio, the Newark Advocate reports:

• A man convicted of preying on homeowners facing foreclosure was in prison for slightly more than two weeks before his first chance at early release presented itself. Common Pleas Judge Thomas Marcelain [last week] denied Harry Blausey an opportunity for placement in a state program that could have allowed him to move first to a halfway house or immediately be released on parole, [...].

• Blausey was convicted Nov. 3 of nine counts of grand theft, a fourth-degree felony; 13 counts of securing writings by deception,(1) a fourth-degree felony; and four counts of theft, a fifth-degree felony.(2)

Blausey was sentenced to four and half years in prison.

For more, see Blausey denied entry into early-release program.

For stoty update (1-27-09), see Judge rules Blausey must pay for lawyer.

Go here for other posts on foreclosure rescue operator Harry Blausey.

(1) Sec. 2913.43(A), Ohio Rev. Code: "No person, by deception, shall cause another to execute any writing that disposes of or encumbers property, or by which a pecuniary obligation is incurred."

(2) According to the story, the state successfully argued Blausey deceived 13 couples and individuals into signing over deeds to their homes on the premise that he would negotiate with their mortgage companies to avoid defaulting on their home debts.

"Foreclosure Chaser" Charged In Alleged Scam To Screw Lenders Financing His Buys; Accused Of "Playing The Gap" Leaving Title Insurers Holding The Bag

In Denver, Colorado, The Denver Post reports:

• A man described by the Denver grand jury as a "foreclosure chaser" has been charged with multiple counts of theft and forgery for allegedly stealing money from various financial institutions in the Denver area. Indicted was Jay Donovan Jost, 63, who owned a series of companies, including Broomfield Lending LLC; MI-T Investments LLC; and Y-ZER Investments LLC.

• According to the indictment, Jost is a "foreclosure chaser," who — through his various companies — obtains title to properties in foreclosure by establishing a redemption position. This is usually done by buying out a debt against the property.

***

• The grand jury alleged that beginning in April 2005, Jost — using his companies — devised a scheme in which he defrauded those who were lending him the money to redeem the properties. Unknown to the lenders, said the grand jury, Jost had often already encumbered the properties. As a result, the deeds of trust offered for security often left the lender in an inferior position to another title holder.

• In many of these cases, said the indictment, Jost was "playing the gap" — the time period between when legal documents from a closing on the property are presented to a county recorder and when the county actually records them. The gap in Colorado can be from five days to two weeks. During this gap period, title companies are unable to discover whether someone else holds title to a particular property.

• Jost would use this "gap" to take out a mortgage from a second lender on a property that he, through one of his corporations, had recently purchased, the grand jury said. In some instances, Jost signed affidavits swearing the properties were unencumbered when, in fact, they were, said the indictment. As a result, the lenders were left without repayment on their loans to Jost.

• Not only were the lenders deceived, said the grand jury, but so were the title companies involved in the closings with the lenders and Jost. The title companies guaranteed the entity making the loan that the properties were unencumbered. As a result of Jost's alleged trickery by playing the gap, said the grand jury, they were unable to discover that Jost had encumbered the properties. The title companies were then obligated to pay the lenders for the money lost as a result, said the indictment.

For the story, see Denver grand jury indicts 'foreclosure chaser.'

NYS Contractor Pleads Guilty To Grand Larceny For Squeezing $80K+ From 88-Year Old Widow For Shoddy, Substandard Home Repairs

From the Office of New York Attorney General Andrew Cuomo:

• Attorney General Andrew M. Cuomo [last month] announced the guilty plea of a Western New York home improvement contractor(1) who repeatedly pressured an 88-year-old widow into paying more than $80,000 for home improvements that were never done or done in a way described by outside experts as “grossly substandard.”

***

• According to court papers, in October 2007, [Bryan] Boone, doing business as Urban Residential Maintenance, contacted the victim by phone offering to make inexpensive repairs to her Cheektowaga home. She accepted and over the next seven months he made repeated requests for payments. Using fear and intimidation,(2) Boone was able to convince the victim to write him a total of 70 checks for $82,158.

***

• All of the work Boone did was careless and incomplete. [...] Independent experts who reviewed Boone’s work at the request of the Attorney General’s office declared it to be grossly substandard and of little value to the homeowner. They estimated the cost of labor and materials to be between $11,000 and $13,000.(3)

For the NY AG press release, see AG Cuomo Secures Guilty Plea From Home Improvement Contractor For Scamming Western New Senior Out Of More Than $80,000 (88-year-old widow pressured into writing more than 70 checks over seven months for work described by outside experts as ‘grossly substandard’).

Go here for other posts on other home improvement contractors hammered by the NY AG's office.

(1) According to the press release, Bryan Boone, 47, of Kenmore, pleaded guilty to Grand Larceny in the third degree (class D felony). He faces up to seven years in prison.

(2) Reportedly, the homeowner told investigators: “When I would complain about how the work was progressing, he would sometimes get very angry and assure me the work was first-rate. As I felt intimidated, I always relented. Similarly, if I questioned a demand for payment, he would sometimes become angry and I would relent.”

(3) Besides doing the shoddy and incomplete work, Boone also failed to meet the legal requirements for home repair work, including obtaining the proper permits, providing a written contract to the consumer, and depositing payments into a trust account, according to the NY AG press release. Cuomo hammers contractors

City Of Cincinnati Sues Lenders In Connection With Costs Incurred With Blighted Foreclosed Homes

In Cincinnati, Ohio, area media outlets are reporting:

• The city of Cincinnati is expanding its fight against bank-owned properties by suing Deutsche Bank and Wells Fargo to force repairs on four vacant buildings in Westwood, Camp Washington and Northside.

• The Dec. 22 lawsuit is the city’s second legal assault on bank-owned vacant buildings. In August, the city joined a Price Hill neighborhood group’s lawsuit against Deutsche Bank and others, with a cross claim that alleged the bank owes more $112,000 in fees and files for failing to comply with the city’s building code.

***

• The city wants repayment for boarding up, demolishing and the other work done to Deutsche and Wells Fargo properties. The suit didn’t specify an amount. “This lawsuit is one attempt to end the abuse of our local neighborhoods and the loss of value associated with the foreclosure crisis,” according to a statement released by the city Tuesday.

For more, see:

• Business Courier of Cincinnati: City sues Deutsche Bank, Wells Fargo,
• Cincinnati Enquirer: City sues banks over foreclosure. BetaVacantForeclosure

Miami Housing, Legal Aid Advocates Help Get Deal With Incoming Landlord On Behalf Of 24 Families In Foreclosed Building

In Miami, Florida, The Miami Herald reports:

• After a year of organizing, pleading and protesting, 24 families that endured unbearable living conditions after their landlord abandoned their apartment complex to foreclosure have reached an accord with the incoming owner. The tenants have been promised their old units at affordable rents and assistance finding short-term housing while the buildings undergo badly needed repairs.

***

• The tentative agreement caps a lengthy campaign against the bank and the new buyer by tenants who were aided by housing advocates at the Miami Workers Center and Legal Services of Greater Miami.

For more, see Liberty City renters, new owner strike bargain (Renters at two Liberty City apartment buildings in foreclosure will be home for the holidays, thanks to new agreements with the incoming owner).

More On The Yanking Of The Presidential Pardon Of HUD Housing Scammer

The New York Daily News reports:

• President Bush turned Brooklyn's Isaac Toussie into a poster boy for outrageous presidential pardons, granting, then rescinding, the order in 24 hours.

• The mystery is how the administration ignored Toussie and his father's background - a tale of payoff and corruption allegations spanning more than 45 years - in pardoning the son for a massive housing scam.

• White House officials did an about-face after they learned - by reading it in the Daily News - the father of scamster Isaac Toussie donated $28,500 to the Republican National Committee.

For more, see Toussies' trail a doozie: Bush missed half-century of corruption, scam claims against father and son.

See also, New York Daily News: Dream homes of Toussie victims were nothing but nightmares.

Go here for earlier posts on HUD housing scammer.

NJ To Crack Down On Tactics Used To Illegally Intimidate Tenants Into Moving From Foreclosed Buildings

In Newark, New Jersey, The Jersey Journal reports:

• On the heels of recent stories in The Jersey Journal about tenants being forced out of buildings going through foreclosure, state officials announced [Tuesday] several steps they are taking to combat the illegal practice.(1)

• At a press conference in Newark, New Jersey Public Advocate Ron Chen said landlords who force tenants out without a legal eviction order face both civil and criminal charges. Under state law, a landlord who does that can be arrested as disorderly person.

• "This is a tragedy," Chen said. "Folks don't know it, but they don't have to leave." State Banking and Insurance Commissioner Steven Goldman said tenants are being forced out because many lawyers, real estate agents, mortgage lenders, police and judges also are unaware of the 2006 law.

***

• Earlier this month, The Jersey Journal wrote about a "cash for keys" scheme two property owners were using to get Hudson County tenants to leave buildings going through foreclosure. The tenants were sent notices implying they had to leave and were offered money to facilitate their move.

For more, see Following Hudson County's lead, state to crack down on owners trying to evict tenants in buildings going through foreclosure.

See also, The Star Ledger: State says landlords in foreclosure cannot evict tenants. ThetaTenantRentSkimming

Tenant Intimidation Continues In SF As Renters In Rent-Controlled Foreclosed Buildings Often The Targets Of Illegal Eviction Attempts

In San Francisco, the San Francisco Chronicle reports:

• [S]ome renters are being told that if their landlord defaults on the mortgage during this foreclosure crisis, they must move out - even if they've been making their rent payments on time. The fact is, in San Francisco that is simply not true.

• "Tenants in rent-controlled buildings in San Francisco are protected by the need for a 'just cause' for eviction," said Darlene Wolf, executive director of the rent board. "And foreclosure is not just cause."

• To make that point, the assessor's office will send letters to tenants in buildings that are in default. The letter will say, "According to San Francisco law, it is illegal for the new owner (typically the bank that has foreclosed on the loan) to ask you to leave without just cause or shut off your utilities." The hope is that the letter will help stop the unsavory practice of intimidating tenants into vacating.

For more, see Renters' eviction notices often illegal in S.F.

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

Oakland Moves To Protect Renters From Utilities Shutoffs In Foreclosed Rental Properties

In Oakland, California, KGO-TV Channel 7 reports:

• The City of Oakland announced a new plan to help renters who face the shut-off of their heat and electricity this winter because the building they live in has been foreclosed. During a Monday morning press conference Oakland officials announced the details of a plan meant to protect people who were suddenly blindsided by their landlord's foreclosure and left with no services.

• Now, they are not only going to get notice but they will also get some time to deal with it as well. The City of Oakland is declaring that shutting off water, heat or electrical services at rental properties poses a threat to public health and safety.

***

• The city began looking into this after hearing some horror stories about rentals ending up in the hands of banks that have discontinued services sometimes without any warning at all.

For more, see Plan protects renters facing foreclosure (A new declaration makes it illegal to shut off utilities in multi-unit buildings). ThetaTenantRentSkimming

New Minnesota Laws Offer Protection For Tenants In Foreclosed Homes

In Minneapolis, Minnesota, Minnesota Public Radio reports:

• [T]housands of renters in Minnesota are living in foreclosed properties and the state has already tried to ease the burden on them by passing a set of laws designed to protect renters' rights. And so far, it seems to be working.

For more, see Are laws protecting tenants in foreclosure working? ThetaTenantRentSkimming

Maryland Pro Bono Organizers Seek Another Wave Of Attorneys To Step Up In Foreclosure Defense Effort

The Washington Post reports:

• When Maryland's chief judge asked the state's lawyers to help homeowners facing foreclosure over the summer, hundreds of lawyers across the state stepped forward, agreeing to provide free legal assistance.(1)

• Now, with state officials expecting a fresh surge in foreclosures in the coming weeks and months, organizers of the pro bono project say they are going to need more lawyers.

For more, see Lawyers Sought to Help in Foreclosure Cases (Homeowners Get Pro Bono Assistance).

(1) Reportedly, the attorneys were given a few choices: They could provide basic advice at workshops for homeowners, or they could sign on to defend individuals against lenders. Another option was to serve as in-house counsel to the housing counseling organizations, only a couple of which have lawyers on staff. Initially, most of the lawyers signed up to help out at the workshops, opting for the most manageable of the assistance opportunities, [executive director of the Pro Bono Resource Center of Maryland Sharon E.] Goldsmith said. But after meeting with homeowners at the workshops, many lawyers agreed to go a step further and represent a homeowner in dealings with a lender. "It really struck a chord with them," Goldsmith said.

Kentucky Legal Aid Programs Face Fin'l Squeeze As Governor Puts Hatchet To State Funding; Federal, Private, IOLTA Funding Also Down

In Lexington, Kentucky, the Lexington Herald Leader reports:

• [T]he state typically provides $1.5 million in funding for four legal aid organizations in Kentucky [...].(1) But this fiscal year that was cut to $500,000 divided among the four agencies. Then last week, Gov. Steve Beshear proposed cutting that $500,000 to $250,000. The additional cuts to legal aid were part of a package of proposed cuts to make up for a projected $456.1 million shortfall in the state budget.(2)

***

• Before the cuts, legal aid groups turned away many who needed help fighting foreclosure or dealing with other housing problems, and signing up for Medicaid and prescription drug benefits. [...] With the economy in tatters and more people facing foreclosure, more people are turning to legal aid groups to help save their homes.

For the story, see Legal aid faces major budget cuts.

(1) Kentucky Legal Aid, Legal Aid of the Bluegrass, the Legal Aid Society in Louisville and the Appalachian Research and Defense Fund.

(2) Reportedly, federal funding for the four programs has remained flat or slightly decreased. Private foundation giving is also down. The state's four legal aid groups also depend on interest payments on lawyers' trust accounts for funding. Interest rates are at historic lows, which means yet another drop in funding.

White House Wakes Up; Revokes Pardon Of NY Developer Who Scammed HUD; Pop Donated $28.5K To RNC

Bloomberg News reports:

• President George W. Bush withdrew a pardon he granted a day earlier to a New York real-estate developer after the White House learned his father made the maximum $28,500 donation to the Republican National Committee months earlier.(1)

• Isaac Robert Toussie of Brooklyn, one of 19 people pardoned [Tuesday], pleaded guilty in 2001 to using false documents to get federally insured mortgages and in 2002 to mail fraud for selling land to Suffolk County at twice its appraised value.

For more, see Bush Cancels Pardon After Campaign Donation Disclosed.

See also:

• New York Daily News: President Bush yanks pardon of housing scammer Isaac Toussie,
• New York Post: The Pardon's Over As Bush Reverses Call,
• New York Daily News: Dream homes of Toussie victims were nothing but nightmares,
• Go here for yesterday's post on this story: Presidential Pardon Purchase Possible As Bush Gives Pass To Developer Convicted In Mortgage Scam Screwing HUD While Daddy Gives $28K To RNC.

(1) According to the story, his father, Robert Toussie, also of Brooklyn, contributed $28,500 to the Republican National Committee on April 25 and the maximum $2,300 to Senator John McCain’s presidential campaign five days later. In October, he made $2,300 donations to two Republican U.S. senators in close races, Norm Coleman of Minnesota and Gordon Smith of Oregon. The Center for Responsive Politics, a Washington-based research group, has no records of any earlier donations by Robert Toussie.

Protection For NYC Residents From Deed Theft

In New York City, the Daily News reports:

• There's no foolproof way to stop someone from stealing your property with a fake deed - just as there's no certain way to stop a skilled thief from stealing your car. But there are some things you can do to protect yourself.

For more (applies to NYC residents only), see Protect yourself and your property.

Fannie Mae Reminders On Home Loan Modification, Foreclosure Eviction Policies

Syndicated real estate columnist Kenneth R. Harney gives this reminder on Fannie Mae's recent change in its loan modification policy:

• [Y]ou no longer have to miss two to three months of payments before your mortgage company can modify the loan terms you can no longer afford. Starting immediately, Fannie Mae, the mortgage giant that has an estimated 18 million home loans in its portfolio or in mortgage bond pools it guarantees, will allow borrowers who face imminent difficulties to request "early workout" loan alterations, even if they have never been late.

***

• Under Fannie Mae's revised approach, servicers of the company's loans nationwide will be required to inform borrowers that if they are "reasonably" certain that changes in their income will cause them to miss mortgage payments, they might qualify for an advance loan modification -- before they fall behind.

For more, see Get Mortgage Relief at the Yellow Light Rather Than Red.

**********************

The Connecticut Law Tribune reports:

• [Fannie Mae] Officials informed legal aid agencies that it had decided to suspend eviction proceedings against tenants in good standing who live in properties facing foreclosure. And starting on Jan. 9, the renters will be able to enter into a new lease with Fannie Mae and stay at least until a buyer is found for the property.

• “The goal of the suspension is to ensure that no renters are put out of their homes during this period” until Jan.9, said Brian Faith, a Fannie Mae spokesman. “We estimate that 7,000 to 10,000 families have been able to stay in their homes as a result of the foreclosure and tenant eviction suspension.”

For more, see Tenants Stay In Homes For The Holidays (Legal aid agencies win eviction concessions from Fannie Mae).

HOA Passes $75K Per Unit Special Assessment; Homeowners Respond With Lawsuit

In Torrance, California, The Daily Breeze reports on an area condominium association that has levied a $75,000 special assessment on each of around 180 homeowners to pay for a $13.5 million exterior renovation project that more than a few of the homeowners are finding unaffordable. Reportedly, more than 20 of them expressed their objections to being hit up in such a manner by banding together in November and filing a lawsuit against the homeowners association.

For the story, see Condo tenants fight for their homes in Torrance (if link expires, try here).

Vandals Hit 25 Cars In Condo Parking Lot; Management Blames Lack Of Security On Shortage Of Funds Due To Unit Owners Delinquent On Maintenance Fees

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

• At least 25 car owners were left without radios, baby strollers and children's Christmas presents after the items were stolen from their cars Monday morning, residents said. [...] Two different high-rise communities were attacked on the dead-end street. Security fences were breached and car windows were broken throughout open-air parking lots.

***

• Residents of Keystone Towers, one community that was robbed, are blaming building management for the mess. With 40 percent of the two buildings unoccupied and many owners in foreclosure, they said that condo fees don't support necessary security for the residents. [...] On Tuesday, Keystone's management notified residents they do not carry adequate insurance to cover Monday's losses.

For the story, see 25 Cars Broken Into In One Day At North Miami Neighborhood.

Presidential Pardon Purchase Possible As Bush Gives Pass To Developer Convicted In Mortgage Scam Screwing HUD While Daddy Gives $28K To RNC

On Long Island, New York, Newsday reports:

• Isaac Robert Toussie, the Brooklyn developer who served time in prison for masterminding a massive Suffolk real estate scam, was pardoned by President George W. Bush yesterday, effectively wiping his criminal record clean.

***

• Toussie pleaded guilty to charges in two separate cases. In one, he admitted in 2001 that he had made false statements to the U.S. Department of Housing and Urban Development, pleading guilty to a count of falsifying loan documents that illegally qualified about 100 home buyers for the HUD-backed mortgages.

***

• [Isaac Toussie's father] Robert Toussie donated $28,500 to the Republican National Committee this year, according to Federal Election Commission filings.

• The pardon shocked and outraged lawmakers and homeowners, some of whom who say they were victims of the Toussies. "In a climate where foreclosure is at its highest in history ... this guy who contributed to that foreclosure gets a pardon?" said Maxine Wilson, 42, one of five who filed [a civil lawsuit] on behalf of 400 home buyers.(1)

• "It's almost as if our pain and our hurt and our hardship really doesn't matter," added Wilson, who moved to Atlanta in 2006. "Some rich kid whose dad can buy his way out of anything can get it erased as though it never happened, as if we're so insignificant it didn't matter."

For more, see Bush pardons man involved in Suffolk real estate scam.

For story update (12-25-08), see:

• New York Daily News: Dream homes of Toussie victims were nothing but nightmares,
• Bloomberg News: Bush Cancels Pardon After Campaign Donation Disclosed,
• New York Daily News: President Bush yanks pardon of housing scammer Isaac Toussie,
• New York Post: The Pardon's Over As Bush Reverses Call.

(1) According to the story, a civil lawsuit is pending in federal court claiming homes built by the developers were shoddy and overpriced.

S. Florida Man, Others Charged With Using Unwitting Mother-In-Law's I.D. & Submitting Simultaneous HELOC Applications To Suck The Equity From Her Home

The U.S. Attorney's Office in Miami, Florida announced the return of a five count grand jury indictment charging eight participants(1) with a bank fraud scheme that resulted in the approval and disbursement of two home equity loans, totaling approximately $1 million. The U.S. Attorney's office said:

• According to the indictment, "Benny" Benach [and three others] decided to submit simultaneous applications for fraudulent home equity lines of credit (“HELOCs”) to Bank of America and Wachovia for the total amount of $1 million, requesting $500,000 from each bank. Each HELOC application listed Benach’s mother-in-law as the purported borrower, and a home owned by Benach’s mother-in-law as the collateral. To prepare and process the HELOC applications, Benach’s mother-in-law’s name and social security number were used without her knowledge, input or authority. [...] At the time of the submission of the fraudulent HELOC applications, neither bank was made aware of the other pending HELOC application.

Among the participants charged were employees of the lenders who allegedly accepted and processed bogus loan applications.

For more, see Two Bank Insiders And Six Others Charged In Bank Fraud Scheme To Defraud Bank Of America And Wachovia Of $1M.

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

(1) Charged were Bienvenido “Benny” Benach, Jr., Ramon Puentes, Danny Flores, Rolando Alfonso, Jorge Nobrega, Jorge Arrieta, Sebastian Kishinevsky, and Adriana Cruz. KappaDeedTheft

No Heat, Hot Water For 18 Cincinnati Families Living In Building Facing Foreclosure

In Cincinnati, Ohio, WLWT-TV Channel 5 reports:

• It's going to be a cold Christmas for 18 families in Avondale because their furnace has been broken for three months and the soonest it'll be fixed is New Year's. "It’s just real cold in this building, but we survive. To us, we're all right. We leave the oven on all night,” apartment resident Lake McCowan said. The McCowan family said they've been forced to boil water and leave the oven on all night.

• They know it’s a fire hazard, they even have a scorched floor to prove it, but they said they don’t have a choice. They said the building's owner hasn't paid his mortgage in about six months and as it heads into foreclosure [...].

For more, see Avondale Apartment Complex Hasn't Had Heat In Three Months (Families Keep Ovens On, Use Space Heaters To Stay Warm). Go here for WLWT-TV video. ThetaTenantRentSkimming

Closing Agent Gets 33 Months For Swiping $1.2M+ In Escrow Cash, Leaving Existing Mortgages Unpaid

The U. S. Attorney's Office in Miami, Florida recently announced the sentencing of closing agent John Mohan, 38, of Delray Beach, FL, to 33 months’ imprisonment in connection with his September guilty plea to a one-count Information charging him with wire fraud. An excerpt from their press release:

• According to the Information, court documents, and statements made in court, Mohan worked as a mortgage broker and closing agent who assisted buyers in real estate transactions. As the closing agent, Mohan would collect funds from buyers and lenders, and would represent to the parties engaged in the transaction that these funds were being held in escrow to be disbursed for various specified purposes, including the satisfaction of pre-existing mortgages.

• In fact, Mohan misappropriated the escrowed funds for his personal use and to make additional personal investments. Over the course of the scheme, Mohan misappropriated more than $1.2 million in client funds. In an effort [to] conceal the fraud and prevent immediate foreclosure of the property, Mohan would sometimes make some payments on the homeowner’s original mortgage.

For the press release, see Delray Beach Mortgage Broker Sentenced For Fraud.

Go here, Go here, Go here, and Go here for other stories of trust account / escrow account theft of funds. EscrowRipOffAlpha

Florida Closing Attorney Gets 63 Months For Pocketing $3M+ In Escrow Money Intended Mostly For Payoff Of Existing Mortgages

The U.S Attorney's Office (Southern District of Florida) recently announced the sentencing of attorney Joseph J. Weisenfeld to 63 months in prison based, following his guilty plea to wire fraud charges. An excerpt from the press release:

• According to the Information and statements made during the plea hearing, Weisenfeld, a licensed attorney, represented individuals and/or entities (mostly buyers) in real estate transactions. As the closing agent in many of these transactions, Weisenfeld would collect funds from buyers and lenders, and would represent to the parties engaged in the transaction that these funds were being held in escrow to be disbursed for various specified purposes, including the satisfaction of pre-existing mortgages. In fact, however, Weisenfeld misappropriated the escrowed funds for his use and benefit. Over the course of the scheme, Weisenfeld misappropriated over $3 million in client funds from his attorney trust account.

For the press release, see Local Real Estate Attorney Sent To Jail On Fraud Charges.

Go here, Go here, Go here, and Go here for other stories of trust account / escrow account theft of funds. EscrowRipOffAlpha

Architect Of Cash Back, Straw Buyer, "Rent-A-Credit" Scam Gets 10+ Years; Involved $3M+ Of Fraudulent Loan Activity, Says DA

In Ventura, California, the Ventura County District Attorney's office announced last month the sentencing of Manuel “Manny” John Perez, Jr. to a term of 10 years, 8 months following his convictions in an alleged cash back, straw buyer scam under the guise of his wholly-owned businesses, Case Bonita Realty, Creative Mortgage Solutions and Elite Escrow. The scam also allegedly involved his former girlfriend and co-defendant, Michele Galindo, a licensed real estate agent. From the DA's press release:

• The pair utilized a fraudulent “Rent-A-Credit” program to seek buyers for homes in which the buyers were purportedly helping others achieve home ownership. Galindo represented the buyers in real estate purchase transactions by submitting offers to purchase homes listed for sale. The employment and income information of such buyers to occupy the homes was misrepresented to lenders so the buyers could qualify to purchase the homes with 100 percent financing.

• After the transactions closed, Perez continued to maintain control of the properties for leasing to prospective tenants or his and Galindo's own use. Moreover, the loan amounts utilized to purchase the homes were increased by tens of thousands of dollars above the actual contract sales price by use of inflated appraisals and phony sales contracts reflecting higher purchase prices.

Go here for the Ventura County DA's press release.