Thursday, January 01, 2009

Buying/Selling Vacant Foreclosed Homes In Cold Weather Regions Not A "Winter Wonderland"

In the St. Paul / Minneapolis area of Minnesota, the Pioneer Press reports:
  • [W]hether it's water heaters that have exploded like frozen pop cans, snow-covered walks and roofs, or indoor temperatures that make you want to warm up outside, unique promises await those who try to sell foreclosed homes during winter in Minnesota.

***

  • Once inside, the potential buyer of a foreclosure will learn quickly whether the home has been properly "winterized." That means shutting off the water, draining pipes and emptying the water heater to prevent freezing, [...].

  • Plumbers who do the work also will dump antifreeze down the kitchen sink and the toilet, [...] and drain water from radiators and the boiler where needed. Failure to winterize can result in burst pipes and radiators and even cracked toilet tanks.

  • Potential buyers must have foreclosed properties "de-winterized" to perform good inspections, said John Piché, an agent with Century 21 Jay Blank in Roseville who specializes in foreclosed homes. That can mean anywhere from $100 to $300 to get water back into the house so a buyer can see whether the plumbing is in good condition. [...] Piché recalled one case where de-winterizing a foreclosed home revealed a broken release valve on the water heater. The valve had blown off, so the only way for the buyer to test the system was to pay $100 for a plumber to bypass the tank, Piché said. In the end, he said, the buyer opted against the purchase, because the de-winterization revealed cracks in the radiators.

For more, see Winter takes toll on efforts to sell homes in foreclosure (Burst pipes, snow-covered roofs, higher inspection costs add to buyer's burden).

Go here for more on freezing pipes in vacant homes. frozenpipetheta

More Stories Related To Foreclosure & The Tightening Economy

More stories related to foreclosure and the tightening economy from around the country:

  • Foreclosures Don’t Spare the House of God: The era of easy credit has begun taking its toll on even the most sacred of borrowers, religious institutions. Hundreds of churches across the country have received foreclosure notices in recent months, and even more are behind on mortgage payments. Historically, churches were wary of debt, and many old-line congregations have owned their buildings free and clear for decades. But borrowing by churches became more common in the 1990s.

  • Kansas Shelters See Surge in Abandoned Horses: Dogs and cats aren't the only animals suffering as the economy takes a toll on pet owners. Rescue groups in Kansas say they're seeing a surge in the number of horses being abandoned, especially older horses. Ande Miller, president and founder of the Hope in the Valley Equine Rescue and Sanctuary near Valley Center, Kansas said the 3-year-old shelter normally cares for 10 to 15 abandoned horses at any given time. But in recent months that number has jumped to between 25 and 30 animals.

  • Animal rescue site opens kids eyes: Former major league baseball player Shea Hillenbrand, and his wife Jessica Hillenbrand own and operate Marley Farms, a Gilbert, Arizona animal rescue and petting zoo. The family bought the 25-acre farm last year, and established their nonprofit organization, Against All Odds, with two missions in mind - rescue animals and help disadvantaged children or kids in crisis, Hillenbrand said.

  • New Law Means Realtors Responsible For Pets Left At Foreclosed Homes: In Contra Costa County, California, thousands of people have lost their homes to foreclosure, and some of them leave behind the family pet. In response to this continuing trend, state Assemblyman Mark Desaulnier, D-Concord, introduced Assembly Bill 2949 this year calling for real estate agents, landlords and property managers to take responsibility for those abandoned pets.

  • Skaters Jump In as Foreclosures Drain the Pool: Pools in abandoned foreclosed homes are being converted into skateboard parks. Skaters are coming to places like Fresno from as far as Germany and Australia. Reportedly, older, kidney-shaped pools are preferred. One skateboarder said his floor and couch were covered by sleeping bags of visiting skateboarders each weekend. Some skateboarders use realty tracking sites like realquest.com and realtor.com to find foreclosed houses with pools, while others trawl through satellite images from Google Earth. On the Web site skateandannoy.com, where skaters trade tips about how to find and drain abandoned pools, one poster wrote about the current economic malaise. “God bless Greenspan,” the post read, “patron saint of pool skatin’.”

  • St. Paul looks for squatters in foreclosed homes: One night a week, crews from St. Paul, Minnesota's city inspector's office make surprise visits to foreclosed buildings with a mission: to look for people who might be living there illegally. Inspectors try to avoid evicting people on the spot unless they are chronic offenders. In cases that involve repeat squatters, inspectors may issue a criminal citation, kick out the residents and board up the building.

  • Contractors Discover Marijuana Grow House: Lake Mary, Florida police want to find the people who abandoned a suspected drug house. They found pot plants and growing equipment inside a home but no people. Police were led to the house by contractors who were there to do some work. When they went inside, they found bags of pot and growing equipment. Neighbors told Eyewitness News the house was in foreclosure and the last tenants moved out a year ago.

Fire Responders Feel Added Risks, Burdens From Vacant Homes, Foreclosures, Evictions

The following stories reflect the added burdens firefighters face as a result of the troubled economy:
  • Dover-Foxcroft, Maine: As the economy worsens, state fire marshals are seeing more buildings and vehicles going up in smoke. State Fire Marshal John Dean said last week he has noticed more mention in his investigators’ reports of vacant buildings or buildings under foreclosure and vehicles that have burned for no reason other than to collect on insurance. Economy may be cause of more fires (‘Trapped’ people commit arson for insurance money).

  • Middleburg, Florida: Fire destroyed a mobile home in Clay County last week. Although no one was hurt, an increased number of "suspicious fires" across the state is sparking concerns. No one lived in the home for months. It was a foreclosure. "It was vacant at the time," said Detective Jerry Baker, Bureau of Fire Marshall Investigations. The investigation is ongoing but insurance experts and law enforcement officials said they're noticing a correlation between the increasing number of foreclosed homes and suspicious fires. Suspicious Fire in a Foreclosed Home.

  • St.Augustine/Jacksonville, Florida: A St. Augustine woman was charged with arson Dec. 19 after vacating a house she was evicted from that was later found burning. The arrest of Billy Bouchard marks two cases within days where people being evicted have been accused of setting fire to former residences. In the other arson, Jacksonville resident Patrice Plummer, 31, was arrested and placed in the Clay County jail after being accused of setting fire Dec. 21 to the Orange Park apartment from which she had been evicted, The Times-Union previously reported. The damage estimate is $500,000 and one firefighter was slightly injured by heat and steam. Plummer was charged with burglary, arson and arson with bodily harm. 2nd evicted woman charged with arson of former home; this one in St. Augustine.

  • Marlborough, Massachusetts: A water pipe inside a vacant house on Millham Street broke last week and caused the building to flood, a recurring issue in the city, a fire official said. The Fire Department yesterday marked the building for "limited interior operations" in the event of a fire, Deputy Chief Ron Ayotte said. The city has been identifying vacant houses that would present an emergency hazard for firefighters. Several properties, including two other recent cases, have placards on the outside that warn responders to enter with extreme caution or to simply not enter. See Pipes burst, flood vacant Marlborough house.

  • Toledo, Ohio: In today's troubled housing market, the story is all too familiar. A tenant is evicted. The now-vacant dwelling catches fire. The once stately property goes unrepaired and gradually deteriorates to the point that a date with a bulldozer is inevitable. The only difference in this case is that the house isn't in Toledo's aged inner core but in Sylvania Township, an upscale suburb. The case was complicated by a finding that the blaze was intentionally set and by an insurance company's refusal to pay for repairs. The situation helps to illustrate the plague of vacant properties spreading across not only U.S. urban areas but suburbs as well. It also highlights the circumstances that take some vacant houses to the point of no return. Upscale Sylvania Township area copes with blight more typical of inner city.

  • Gainesville, Georgia: Officials believe a vacant house fire, which melted vinyl siding on an occupied home next door, was caused by a human act. The two prevailing theories are that a homeless person or neighborhood kids started the fire, either intentionally or unintentionally. "This could be a sign of the times to come," Deputy Fire Chief Jerome Yarbrough said. He fears that with a deepening recession, more homes left vacant from foreclosures and evictions will be burned by vagrants or vandals. And when firefighters show up, they don’t always know if there are occupants who need rescuing. "I have concerns because this type of property fire here is the kind that gets firefighters hurt," Yarbrough said. "I expect to see more of these if the economy gets worse." Vacant home fires a ‘sign of the times’ (Home foreclosures could be behind increase in suspected arsons). ArsonForeclosureAlpha

Failure To Winterize Can Lead To Vacant Home Havoc

The following stories provide emphasis to the importance of winterizing vacant homes, foreclosed or not, located in cold weather areas to avoid the havoc caused by frozen, broken, bursted water pipes:

  • Foreclosures leading to more unattended burst pipes: Winter weather is causing a soggy new headache for towns and cities working to keep foreclosed homes from becoming safety hazards: water pipes that freeze and burst in empty houses. Municipal officials say when these problems spring up, they usually happen in homes partway through the foreclosure process, or taken over by far-away or financially troubled mortgage companies. The residents have left, and power and heat are shut off. But the water is still on, and pipes and water heaters have not been drained. They freeze when temperatures drop, sometimes bursting the pipes as the ice expands, and the water flows out freely when they thaw. Once a home floods after the burst water pipes thaw, unless you get the wet drywall and rugs out, mold will start growing.

  • Pipes burst, flood vacant Marlborough house: A water pipe inside a vacant house on Millham Street in Malborough, Massachusetts broke last week and caused the building to flood, a recurring issue in the city, a fire official said. Water was running from the second floor to the first floor and into the basement after the pipe apparently froze and then blew, said Deputy Chief Ron Ayotte. "We've had a rash of them lately," Ayotte said. "That's what happens when you don't winterize a house." Many similar calls concern foreclosed houses, said Ayotte, who believes the Millham Street house had been in foreclosure. A lot of vacant properties, including the Millham Street house, are not winterized, Ayotte said.

  • Princeton renters suddenly without homes due to foreclosure: A vacant unit in a foreclosed apartment building in Princeton, Minnesota was apparently not winterized properly so a water pipe froze and then burst sending water down into the apartment directly below Christmas Eve. As a result, the water utility shut off the water for the complex and residents say they were told they need to move out by New Years Eve. Residents say because they're not getting their damage deposits back, they have no money for new damage deposits and moving expenses for new apartments.

  • New Minnesota State Law Prevents Frozen Pipes in Foreclosed Homes (Mold, bursting pipes among destruction in metro foreclosures): According to the new law, city inspectors are allowed to find out where utility companies have disconnected gas and electric services, so they can shut off water at the curb and keep pipes from bursting inside, which would help avoid the additional damage done by flooding when the pipes thaw. Sometimes the damage from foreclosed homes is so severe, the homes are dubbed “ice houses.” The water damage often leads to mold, destroying walls and entire homes.

  • Irwin Man Tries To Thaw Pipe, Starts Fire: An Irwin, Pennsylvania man trying to thaw a frozen pipe in his home apparently started a house fire. Several fire departments responded to the fire on Chestnut Street after it broke out. Officials say the homeowner was trying to thaw out the pipe with a kerosene torch.

  • Protect pipes during winter’s deep freeze: In River Falls, Wisconsin, Liberty Plumbing owner Bob Kolashinski sees it every winter as Mother Nature delivers frigid temperatures and wicked wind chills: Any pipe carrying water can freeze. Liberty has seen a rise in calls on problems in foreclosed homes, where the heat is usually off. Since furnaces can fail, Kolashinski said the only foolproof way to prevent freezing is to shut off water at the main valve, drain all the fixtures and pour RV antifreeze into the pipes’ p-traps. Kolashinski said people living in townhomes or condos shouldn’t be lulled into thinking heat from other units will keep their pipes from freezing. That ambient heat is seldom enough.

  • More Pipes Bursting In Empty Houses (Unless reported by neighbors, mess goes unchecked): Home foreclosures that turn into neighborhood eyesores when unpaid utilities lead to broken water pipes are happening more often. The mortgage company will be notified to start cleanup soon because health problems aren't frozen in time. Mold will grow fast after the spring thaw.

Go here for more on freezing pipes in vacant homes. frozenpipetheta BetaVacantForeclosure

Wednesday, December 31, 2008

More On Anticipated Home Mortgage "Cram Downs" In Bankruptcy

The Wall Street Journal reports:
  • Mortgage lenders who wake up Thursday with a New Year's hangover are likely to face another headache soon: The effort to give bankruptcy judges the power to rewrite mortgages is gaining steam.

  • The banking industry hoped the mortgage "cram-down"(1) measure died when Congress removed it from the $700 billion bailout bill that passed in October. But it has been gathering momentum in Democrat-controlled Washington, as evidence emerges that current voluntary foreclosure-prevention programs are falling short.

***

  • "It is absolutely clear that voluntary modification is just not working," says Rep. Brad Miller, a North Carolina Democrat. "Every plan that Congress has passed, we do it and nothing happens."

For more, see Mortgage 'Cram-Downs' Loom as Foreclosures Mount (may require subscription; if no subscription, go here - then click link for the story).

(1) In a cram-down, a judge modifies a loan, often reducing principal so a borrower can afford it. Lenders hate it because they have to absorb the loss. Bankruptcy judges currently have the ability to modify certain personal loans and even mortgages on vacation homes, but they can not cram-down mortgages on primary residences.

Judge Tacks On 3 Years To Prison Sentence Sought By Feds In S. Florida Mortgage Scam

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:
  • [A] Fort Lauderdale federal judge on Tuesday sentenced a Coral Springs man to eight years in prison for orchestrating a $12 million mortgage fraud in Broward County. In sentencing Anthony Dehaney, U.S. District Judge William Dimitrouleas went beyond the five-year prison term recommended by prosecutors, saying he wanted to deter other people from trying to make "quick easy money" through real estate fraud.

***

  • Dehaney, 57, who pleaded guilty in October to conspiracy and fraud charges, lied on mortgage loan applications for at least 25 Broward County properties between January 2003 and August 2006, including a $1.4 million home in Coral Springs.

  • When the real estate market hit the rocks, Dehaney filed forged bankruptcy petitions in Broward federal court on behalf of three straw buyers to stall foreclosure proceedings.

For more, see Mortgage fraud cases in South Florida might bring stiffer sentences (Judge imposes 8-year term, saying he wants to deter others).

Lenders Accused In Housing Court Of Dumping Blighted Foreclosures Onto Real Estate Market Shop For Friendlier Forum; Move Cases To Federal Court

In Cleveland, Ohio, The Washington Independent reports:
  • The fight that neighborhoods in Cleveland are launching against banks that dump vacant and vandalized foreclosed homes back onto the real estate market received a bit of a setback, [...]. A private, non-profit housing advocacy group had filed suit in local housing court to force the banks to clean up their properties before selling them, or to demolish them entirely. But the banks - Deutsche Bank and Wells Fargo - convinced a judge to move the suit to federal court.

***

  • The move to federal court is more than just an arcane legal development. The neighborhood group wants the case heard in housing court because it validates what has become increasingly clear in the foreclosure crisis: Banks are property owners, with all the responsibilities that come with it. As they foreclose on houses and their inventories of bank-owned properties swell, banks try to dodge this reality by blaming servicers and paying lawyers to get them out of housing court.

  • The same thing happened in Cincinnati recently, where the local legal aid agency filed suit in housing court, but the case was moved to a federal court instead.

For more, see Banks with Deep Pockets Dodge Foreclosure Damages.

See also, Lawsuit Targets Banks With Novel Tactic (Advocacy Group Takes Grievances to Housing Court):

  • [C]leveland and other cities are “looking at old bodies of law to address new problems,” [University of Connecticut law professor] Patricia McCoy said, because they are trying to fight foreclosures with any tools they can. Cleveland has taken legal action previously over foreclosures. The city in January sued 21 investment banks, including Wells Fargo and Deutsche Bank, and accused them of creating and enabling the subprime crisis. The suit was filed in Cuyahoga County Common Pleas court. The latest suit differs in that it was filed in housing court. BetaVacantForeclosure

More On Philly Deed Theft Problem

In Philadelphia, Pennsylvania, The Intelligencer reports:
  • [P]hiladelphia has become a hot spot for deed theft in the past couple of years, said [Montgomery County Recorder of Deeds Nancy J.] Becker. She recalled an incident where homeowners left for their winter home in Florida only to return to the city in the spring to find all of their furniture and possessions gone and a family living in their home who thought they had rightfully bought the property.

  • In Philadelphia, it's so bad that the president judge designated two judges, and all they hear is land-fraud charges.”

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

Loan Modification Services Prohibited In Vermont Unless Licensed, Say State Officials

In Montpelier, Vermont, The Burlington Free Press reports:

  • (BISHCA) has received inquiries and complaints about so-called foreclosure “rescue” services. While it is not inherently illegal to offer these services, the person doing it must be licensed with BISHCA as a lender, mortgage broker, or debt adjuster, said BISHCA officials.

For the story, see State: Be wary of foreclosure rescue services.

Shelby County Commisioners Give Go-Ahead For Filing Race-Based, Predatory Mortgage Suit Against Major Lenders

In Memphis, Tennessee, Memphis Commercial Appeal reports:
  • Shelby County commissioners approved a resolution [last week] authorizing the county to file suit against the national lenders who, officials say, gave out risky, high-interest rate loans and enabled a foreclosure crisis in Shelby County.

  • The resolution alleges that these major national lenders engaged in "deceptive" and "discriminatory" lending practices targeted at the black community. And the resulting foreclosure epidemic has destabilized neighborhoods, eroded property values and damaged the tax base -- costing county and Memphis city government millions in tax revenues.

***

  • Webb Brewer, the director of advocacy for Memphis Area Legal Services, who will help the city and county prosecute, said the 10 or so national banks that gave out the most predatory loans will most likely be named.

For more, see Shelby commissioners authorize lawsuits against mortgage lenders (Resolution says loans targeted minorities, forced foreclosures).

See also, Memphis Daily News: Details Coming Soon for Lender Lawsuit.

Go here, Go here, and Go here for other posts on alleged discrimination in real estate transactions. DiscriminationPredatoryLendingAlpha

Tuesday, December 30, 2008

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:

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.

Monday, December 29, 2008

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).

Sunday, December 28, 2008

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

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

Saturday, December 27, 2008

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:

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.

***

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).

Friday, December 26, 2008

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.