Change Bankruptcy Law To Allow For Home Mortgage Cram Downs, Say 22 State AGs

Legal NewsLine reports:

• A coalition of 22 state attorneys general(1) asked Congress on Tuesday to loosen U.S. bankruptcy rules so judges can modify home loans to help reduce the tide of home foreclosures. In a letter to U.S. House and Senate leaders, the attorneys general called for an amendment to the U.S. Bankruptcy Code so federal judges can adjust home mortgages just as they can most other types of debts and loans.

In addition to the 22 state AGs, the District of Columbia AG also joined in the request, according to the story.

For more, see AGs urge Congress to amend Bankruptcy Code.

(1) According to the report, attorneys general from the following jurisdictions joined in making the request: Arizona, California, Connecticut, Delaware, District of Columbia, Illinois, Iowa, Kentucky, Louisiana, Massachusetts, Minnesota, Mississippi, Montana, New Mexico, North Carolina, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Vermont, Washington and West Virginia.

Loan Modification Firm Accused Of Illegally Charging Minnesota Couple Upfront Fees To Avoid Foreclosure

In St. Paul, Minnesota, WCCO-TV Channel 4 reports on another casualty involving loan modification firms illegally charging homeowners facing foreclosure upfront fees to avoid foreclosure.

• The [homeowners] paid almost $2,000 to National Foreclosure Counseling Services three months ago. They haven't heard anything from them for weeks. Now, their home will go up for auction first thing Tuesday morning.

***

• Minnesota's Attorney General Lori Swanson has sued 10 companies in the last year for the very same thing. It's illegal in Minnesota for foreclosure consultants to charge anything until after they do something.

For more, see Mortgage Help Scam Now Costing Couple Their Home.

Connecticut AG Urges Passage Of New Law To Target Loan Modification, Debt Reduction Firms

From the Connecticut Attorney General's Office:

• Attorney General Richard Blumenthal [Tuesday] proposed legislation to fight predatory debt reducers that offer mortgage and debt rescue services that may actually cost consumers their homes. [...] Debt reducers are unregulated and often claim to offer services to rescue homeowners from foreclosure or severe debt.

• In some cases, debt reducers deceive consumers into relinquishing their homes, turning homeowners into tenants. In other cases, consumers pay expensive advance fees to debt reducers that fail to provide promised relief. Often, consumers report that oral promises fail to translate into consumer contracts.

• Blumenthal's proposal -- An Act Concerning Foreclosure Rescue and Debt Reducers -- would compel debt reducers to provide advance disclosures that clearly and conspicuously explain their services, and prohibit advance fees.

For more of the Connecticut AG press release, see Attorney General Investigates And Seeks To Stop Predatory Debt Reducers.

See also, The Connecticut Post: Blumenthal: Beware of debt-reduction companies.

NY AG Settles With Two Mortgage Brokerages, Files Suit Against Another For Alleged Race-Based, Discriminatory Lending Practices

From the Office of the New York Atttorney General:

• Attorney General Andrew M. Cuomo [Monday] announced results of a landmark investigation with the New York State Department of Banking into discriminatory practices in the mortgage brokerage industry.

• In the first law enforcement action of its kind in New York State, two mortgage brokerage companies – HCI Mortgage and Consumer One Mortgage – will collectively pay $665,000 in restitution to approximately 455 Black and Latino borrowers who were illegally charged higher fees than similarly-situated White borrowers. The companies collectively operate more than 20 branches throughout New York State.

• The Attorney General also filed a lawsuit in federal district court against another mortgage brokerage company – U.S. Capital Funding, LLC – that engaged in similar discriminatory practices.(1)

Go here for the NY AG press release: Attorney General Cuomo Announces Groundbreaking Agreement With Major Mortgage Brokers Who Discriminated Against Minority Customers (HCI and Consumer One to Pay Over $650,000 in Restitution After Illegally Charging Black and Latino Customers Higher Brokerage Fees; Cuomo Sues U.S. Capital Funding for Similar Discriminatory Practices).

Go here, Go here, and Go here for other posts on alleged race bias in real estate transactions.

(1) According to the NY AG press release, unlike HCI and Consumer One, U.S. Capital Funding failed to agree to provide appropriate relief to victims. Consequently, the Attorney General filed a lawsuit seeking restitution for over 100 minority borrowers and a court order requiring the company to cease its discriminatory practices. DiscriminationPredatoryLendingAlpha

Nigerian Scam Artist Swipes & Sells Deed To Cape Coral Lot; Leaves Listing Agent With Egg On Face, Title Insurer Holding The Bag

In Cape Coral, Florida, the News Press reports:

• Roberta Kunda thought she was buying a vacant lot in Cape Coral. Instead, $18,000 of her money went to a computer-savvy scam artist — possibly in Nigeria. Because she had title insurance, Kunda will probably get back her money from the 2007 purchase, but the incident highlights cracks in the real estate market and the risk from international scammers who are growing more sophisticated.

***

• Kunda went through a reputable RE/MAX realtor, paid for a title search and filed all the proper paperwork. But somehow, the real estate agent, title company and an underwriter on the title insurance all missed the fact that the seller was a scam artist who never owned the property [...]. Whoever posed as the seller on Kunda's property had the Deed Warranty notarized in Lagos, Nigeria. That address, [a manager at a local title agency] said, should have triggered a red flag. It did not.

For more, see Internet scammer sells Cape Coral residential lot for $18,000. KappaDeedTheft

Assisted Living Center Operator Files For Ch. 11 Protection; Future Of Senior Residents Uncertain

In Eugene, Oregon, The Register Guard reports:

• In a last-ditch effort to save his company, Sunwest Management CEO Jon Harder placed himself and 14 individual assisted living centers — including Alpine Court in Eugene — into Chapter 11 bankruptcy. In legal maneuvering that unfolded in the waning days of 2008, Harder sought an injunction to stop nine big investment banks from seizing the most profitable of the company’s nearly 270 assisted living centers across the country.

***

• While creditors haggle, 16,800 seniors in Sunwest centers around the country — including about 5,000 in Oregon and 600 in Lane County — wait to see how Sunwest’s collapse will affect their housing. [...] The 90-plus foreclosures or receivership actions pending against Sunwest affiliates have “put at risk the well-being of residents at Sunwest-related facilities,” according to court records.

For more, see Assisted living sites face legal challenges Sunwest Management (CEO Jon Harder files for Chapter 11 bankruptcy protection, including Alpine Court).

See also, Statesman Journal: Sunwest tries to halt foreclosure (Founder's bankruptcy filing is effort to protect senior living homes, court papers show):

• [T]he ongoing foreclosures and court judgments threaten to "result in a chaotic free-for-all in which the fastest creditors through the door will grab what they can and run," Harder's attorneys warned in court documents. [...] "This affords, in our opinion, the very best opportunity to have the least disruption to the lives of residents of the retirement facilities," said Stephen English, a Portland attorney who represents Harder.

Go here for other posts on the financially strapped Sunwest Management and its senior care facilities.

Using Statute Of Limitations To Wipe Out Lenders' Right To Foreclose A Mortgage?

In a recent story on MSNBC.com profiling Florida consumer foreclosure attorney April Charney and her approach to defending homeowners facing foreclosure, a point was made on the possible use of the statute of limitations to terminate a foreclosing lender's right to foreclose:

• Charney said that in a number of her cases, once there is no longer an ability for the loan servicer to profit, the foreclosure “just goes to sleep, and unless I’m going to pursue it, nobody’s setting hearings, nobody’s pursuing anything to get it to trial.”

• After five years, which is the statute of limitations to enforce a contract in Florida,(1) she can try to help her clients own their homes mortgage-free, Charney said. The first opportunity for her to help clients do that may arise next year.

• And that legal limbo is where the lion’s share of her cases stand now, Charney said. So far this year, she has achieved two “workouts” and lost two cases. “Many, many, many” of the rest are in sleep mode or getting a single filing each year by plaintiffs’ attorneys just to keep them alive.

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) Sec. 95.11(2)(c), 95.281(1)(a), Florida Statutes. KappaMtgDocsMissing

NYC Attorney Disbarred For Stealing From Clients Refuses To Stop Practicing Law; Arrested Last Week For 3rd Time Since Losing License

In New York City, the New York Post reports:

• Practice doesn't necessarily make perfect. An elderly Manhattan lawyer, banished from the legal profession for stealing from clients, could spend his golden years in prison - because he refuses to stay out of the city's courthouses.

• At an age when most career attorneys have taken to the golf course, all 81- year-old Bertram Brown wants to do is work, something he is now alleged to have done three times under an alias since his disbarment.

***

• Brown, a Columbia Law grad and an attorney for nearly a half-century, surrendered to Brooklyn prosecutors last week for allegedly using a phony name to represent a client in a housing-court case.

• He's been without a license since April 2006, when he was disbarred for stealing $54,000 from a Queens man [William Ryan] who had hired him to stop the foreclosure on his Ozone Park home.

***

• Brown was also charged with stealing more than $20,000 from one of Ryan's neighbors, whom he represented in the sale of her Ozone Park home, authorities said.

For more, see COURT IN OB-SESSION (Crooked Attn'y Refuses To Stop Practicing).

Negotiated Short Sale By Real Estate Agent On Behalf Of Homeowner Facing Foreclosure Not A Violation Of Florida Foreclosure Rescue Law, Says State AG

Does Florida's new Foreclosure Fraud Protection Act(1) prohibit real estate licensees from being involved in short sales?

According to Florida Attorney General Bill McCollum, where the only remuneration sought by a real estate agent within the state in negotiating a short sale to assist a client in avoiding foreclosure is the normal real estate commission, and no additional upfront or other fee is sought for the negotiation or dialogue with the lender, that activity does not appear to fall within the scope of the Foreclosure Fraud Protection Act.

For more, see the AG's recent letter to the Florida Association of Realtors in which he expresses this position.

(1) Sec. 501.1377, Florida Statutes (eff. October 1, 2008).

New Jersey Woman Charged With Pocketing Elderly Mother's Housing Money Intended For Long Term Care Facility Where She Resided

From the Office of the New Jersey Attorney General:

• Attorney General Anne Milgram announced that an Ocean County woman has been indicted for allegedly stealing more than $6,000 from her elderly mother.

***

• The indictment alleges that [... Ann] Selk failed to remit payments on her mother’s behalf to the long-term care facility in which the mother was a resident. As a condition of her mother’s Medicaid eligibility, Selk was required to turn over the mother’s monthly Social Security and pension checks to the residential long-term care facility as partial payment for care. The indictment alleges that Selk failed to turn over $6,376 of her mother’s available income to the facility on behalf of her mother.

For the New Jersey AG press release, see Ocean County Woman Charged in Theft of $6,000 from Her Mother.

Amend HOA/Condo Docs To Mitigate Against Rent Skimming By Unit Owners Facing Foreclosure

Buried in a recent column in the Naples Daily News (Southwest Florida) is the following suggestion for condominium and homeowners associations who are being stiffed on their maintenance fees by non-owner occupant unit owners who, in turn, are sticking tenants into their premises and pocketing the rent while awaiting being ousted by a foreclosure sale:

• One way to help an association minimize the costs associated with these flipper/renter problems is to amend your declaration of condominium or declaration of covenants to allow the association to collect the rent directly from the tenant if an owner is past due on assessments and a claim of lien has been filed on the unit.(1)

***

• It is important to remember that an association can only collect the rent or evict the tenant if such power is contained in the governing documents. If your association does not have such powers in its documents, your board may wish to consider having its members vote on amending your documents to include such provisions at your next annual meeting.

For more, see Unit owner collecting rent but not paying association assessments.

(1) As part of any amendment, the association might consider tacking on a monthly manangement fee on any unit they are forced to collect rent on, if otherwise permissible under local law.

Attorney Malpractice For Obtaining Loan Modification From Lender Who Can't Prove It Owns The Promissory Note?

An article in the Decenber, 2008 issue of Trial Magazine highlights problems faced by lenders as a result of the mortgage securitization process that leaves them in a difficult spot whether they're attempting a foreclosure action against, or a loan modification with, a financially strapped homeowner. It also raises a question regarding an attorney's professional responsibility when representing a homeowner in these situations.

• [B]ecause of lenders’ bundling and reselling of mortgages, [promissory] notes are often lost, misplaced, or corrupted. As a result, many lenders can’t prove that they are owed payments and entitled to foreclose.

***

• “Losing a note is like losing cash,” said Mitchell Roth, a lawyer in Sherman Oaks, California. “The right to payment depends, with limited exceptions, upon the actual possession of the note. To defend against a foreclosure, the first line of defense is, ‘Show me the note.’ And show me how you have the right to payment under the note by proper endorsement or assignment.”

***

• Roth said confusion about the note holder is one reason lawyers should counsel their clients to avoid loan workouts or other negotiations offered by their banks or mortgage companies.

• “Why should we renegotiate unless we know that we are negotiating with the actual holder of the note?” he said. “In fact, I think lawyers are committing malpractice if they are negotiating with an entity that is not the original holder in due course in possession of the instrument.”

For more, see Homeowners bank on new ways to fight foreclosures (article reproduced and appearing on the website of The Consumer Warning Network).

In related posts, see:

• 12-29-08: Foreclosing Lender Can't Prove Ownership Of The Note? So What's The Big Deal???,
• 12-28-08: Judges, Homeowner Attorneys Begin To Wonder How To Do A Loan Modification When Lender Can't Prove Ownership Of Promissory Note?KappaMtgDocsMissing

Lack Of Diligence Means Another Process Server Screw-Up, Another Void Foreclosure

A 2006 decision of a Florida appeals court adds a little fuel to the fire for those who believe that screw-ups by process servers (as well as attorneys for foreclosing lenders who, contrary to what they may think, have some responsibility for supervising the actions of a process server) in the course of serving homeowners with the lawsuit paperwork (ie. summons and complaint) in foreclosure proceedings are not all that uncommon.

The case involved a permanent resident of Canada who owned a second home in Spring Hill, Florida, and who was facing foreclosure on that home. At the time of the attempted service of process, the home was unoccupied. Because the process server couldn't find the homeowner after a couple of attempts at the premises, and an attempt at a second location, a decision was made to serve the homeowner by publication of a legal notice in the local newspaper.(1)

In reversing the lower court and deciding that service of process was no good in this case, the court ruled that the process server failed to meet the minimum requirements for conducting a "diligent search and inquiry" for the whereabouts of the homeowner prior to resorting to service by publication.(2)

For the details on the process server's lack of diligence in conducting a search and inquiry in connection with the homeowner's whereabouts in this case (sorry, no "easy-to-read" media report for this story; court decision only), see Godsell v. United Guar. Residential Ins., 923 So. 2d 1209; 2006 Fla. App. LEXIS 3884; 31 Fla. L. Weekly D 812 (5th DCA 2006).

Go here and go here for other posts on foreclosures involving faulty notifications to property owners.

Go here for other posts on process server screw ups.

(1) Pursuant to Sections 49.021-.041, Florida Statutes.

(2) The court indicated that the plaintiff must prove that it made “an honest and conscientious effort, reasonably appropriate to the circumstances, to acquire the information necessary to fully comply with the controlling statutes,” and that "it is basic that to constitute diligent search and inquiry to discover the whereabouts of a party, that inquiry should be made of persons likely or presumed to known [sic] such whereabouts." foreclosure faulty notice ScrewUpProcessServing

Mortgage Payoff "To Do" List

In a recent Q&A column, attorney/syndicated real estate writer Benny L. Kass gives this "to do" list when paying off a mortgage:

1. Make sure that your mortgage/deed of trust is formally released from the land records in the county where your house is located. Ask your former lender to confirm that they arranged for this release (If you are having trouble determining whether the release/satisfaction was filed, the local recorder of deeds may be of assistance.),
2. You should get your original promissory note and deed of trust returned to you, marked "paid and cancelled;"(1)
3. Advise your county real estate tax office to start sending you the real estate tax bills;
4. For those who had automatic bank withdrawals to pay your mortgage, make sure to stop these payments immediately.

For those of you looking to take advantage of the current low fixed rate mortgages available and are thinking of refinancing, you might want to keep the foregoing points in mind.

Source: Real Estate Mailbag (last Q&A in the article).

(1) I wonder how many homeowners actually realize that they are entitled to get back their original promissory note. Also, I wonder how many would be successful in getting back their original note nowadays, given that many of the geniuses in the mortgage industry (ie. lenders, servicers, securitizers, Wall Street wizards, etc.) never bothered to physically keep track of the loan documents after the mortgage was consummated, and have no clue whether they actually lost them, or merely forgot where they stashed them (possibly in a dumpster).

For an example of how clueless some in the mortgage industry are, see The Associated Press: American Home under fire over loan files, where a mortgage lender, through its legal counsel, makes an idiotic request of a bankruptcy court for permission to actually dump the original documents for 490,000 mortgage loans. KappaMtgDocsMissing

Difficulty Tracing Title To Home Involving Securitized Foreclosed Mortgage Stalls House Closing

In Minneapolis, Minnesota, FOX9 reports:

• A Twin Cities couple is hoping to turn a foreclosed home into a home, but it has not been easy. Three different closing dates have fallen through. [...] In the Waite Park neighborhood in northeast Minneapolis, a little cottage on Benjamin Street has been sitting empty since spring. Heather Playman and her husband would love to buy it. In fact, they even have a purchase agreement, picking it up two months ago for a relative steal at $165,000.

• But the bank won't close on the deal. The problem is with the paperwork: the title and the deed. Wachovia used to own the house, now it's Fannie Mae. The city of Minneapolis says it’s a common problem that keeps hundreds of homes in limbo. "Many mortgages were bought and sold between lenders over and over again and it is difficult to trace the title."(1)

For more, see Bank Ownership of Foreclosed Homes Causing Confusion (Closing dates missed on NE Minneapolis home owned by Fannie Mae).

(1) Given the gigantic mess created by the mortgage lending industry in this regard, I wonder how many in the title insurance industry (ie. underwriters, agents, closers, etc.) there are who are having a problem insuring the titles to homes that have a recent foreclosure appearing in the chain of title. Based on this story, there apparently is at least one who's having a problem. Are there any others??? KappaMtgDocsMissing

Oregon Equity Stripper Cops Plea; Now Faces Foreclosure Himself

In Portland, Oregon, Willamette Weekly reports:

• Larry Jason Somera did something a week before Christmas that rarely happens in Multnomah County Circuit Court—he pleaded guilty to a mortgage-related crime.

***

• Somera, a 35-year-old former mortgage broker, first attracted the attention of law enforcement after two 2006 home purchases from the elderly and disabled. In one deal, he and a partner bought the 1,300-square-foot Northeast Portland home of Evelyn Allen, a 73-year-old blind woman who faced foreclosure. They made a gross profit of $155,000, most of which they paid to Allen only after Allen’s family sued.

• That same year, Somera and a partner bought the St. Johns home of an 80-year-old Portland man suffering from dementia. They paid $125,000, $45,000 less than it was worth, according to court records. After the man’s financial adviser challenged the purchase in court, Somera and his partner gave the home back.

• Shen ultimately charged Somera with first-degree forgery, a Class C felony, for concocting a bogus rental agreement as collateral for the loan on a third property. [...] Somera, whose pitch in 2006 to Allen was rescue from foreclosure, now also faces the loss of his home.

For more, see Grounded Vulture (One “foreclosure-rescuer” pleads guilty in 2008. Will there be more in 2009?).

For an earlier story on this case, see Rescue Me (A Portland Cop is targeting foreclosure vultures).

San Diego-Area Foreclosure Rescue Operator Faces Felony Charges For Allegedly Screwing 17 Homeowners In 150 Year Old Land Patent Scam

In San Diego, California, KGTV Channel 10 reports:

• A man accused of stealing more than $100,000 from people in a land patent foreclosure scam pleaded not guilty Wednesday to numerous felony charges involving the 17 alleged victims. Larry Smith, 60, allegedly told people who came to his seminars that if they gave him thousands of dollars, he would help them buy a land patent so the bank couldn't foreclose on it.

***

• Five others are charged in the case with Smith, although only one has been arrested, [Deputy District Attorney Marlene] Coyne said. The prosecutor said she believes there are more people allegedly victimized by Smith, who have not yet come forward.(1)

For more, see Man Pleads Not Guilty In Alleged Foreclosure Scam.

See also, KTNV-TV Channel 13 (Las Vegas): Accused foreclosure con man busted (A man accused of preying on vulnerable victims desperate to save their homes is in jail following an investigation that spanned two states. Authorities say 60-year-old Larry Smith held seminars in real estate offices in Las Vegas and San Diego where he reportedly took hundreds of thousands of dollars from people in dire straits).

For related KGTV Channel 10 reports on this case, see:

• December 22, 2008: Man Takes Alleged Land Patent Scheme To Other States (Larry Smith Accused Of Using 150-Year-Old Scam On Foreclosure Victims),
• July 17, 2008: I-Team Pursues Man Suspected In Land Patent Scheme.

(1) Smith was charged with conspiracy to commit grand theft, conspiracy to commit deceitful practices by a foreclosure consultant and numerous counts of grand theft.

Atlanta Man Faces Theft By Deception Charges For Allegedly Taking Money From 11 Homeowners Facing Foreclosure, Failing To Deilver On Promises

In Atlanta, Georgia, Fox5 News reports that a man who made money off of people about to lose their homes to foreclosure has been arrested.

Dwayne Green, of Maximus Investment Group, has been charged with one felony count of theft by deception for taking $18,000 from one homeowner facing foreclosure, and one misdemeanor count of theft by deception for pocketing lesser amounts from ten other financially strapped homeowners. He failed to deliver on promises to help save homeowners out of foreclosure.

For the story (video only), see I-Team Maximus Arrest. loan modification

Arizona Man Faces Charges Of Pocketing Upfront Fees For Allegedly Phony Loan Modification, Foreclosure Help

In Glendale, Arizona, KNXV-TV Channel 15 reports:

• Arizona Attorney General Terry Goddard announced Wednesday that a Glendale man has been indicted on charges related to a mortgage assistance scam.(1) Peoria police arrested Bobby John Herrera, 33, late Tuesday.

***

• Investigators said Herrera solicited 10 Valley homeowners facing foreclosure by making fraudulent claims that he could modify mortgage terms or provide other assistance to help them keep their homes. Herrera often charged the victims upfront fees of $1,245, according to the Attorney General's Office. The suspect is alleged to have not provided any foreclosure relief assistance or mortgage loan modifications as promised.

For more, see Attorney General: Glendale man victimized struggling homeowners.

From the Arizona Attorney General's office:

• Indictment: State of Arizona v. Herrera,
• Press Release: Glendale Man Indicted for Mortgage Loan ‘Assistance’ Scam.

(1) Herrera has been indicted on:

• one count of fraudulent schemes and artifices (ie. knowingly obtaining any benefit by means of false or fraudulent pretenses, representations, promises or material omissions, pursuant to a scheme or artifice to defraud, in violation of § 13-2310, of the Arizona Revised Statutes),
• one count of money laundering (A.R.S. § 13-2317 ),
• one count of illegal control of an enterprise (A.R.S. § 13-2312(A)), and
• six counts of theft (A.R.S. § 13-1802(A)(1)).

Foreclosure Rescue Arrangement Leaves Los Angeles Homeowner Facing Eviction

In Los Angeles, California, the CBS Evening News reports:

• Alexendria Craig's house is full of memories. It was her parents' home and she inherited it when they died. A picture of her great grandfather sits on the mantle. Now she is about to lose that home after taking out a series of high interest loans that have left her hopelessly in debt.

***

• Desperate to hold onto her house, she answered a slick sounding ad that turned out to be too good to be true. Craig agreed to pay $30,000 and to share title on her house to a foreclosure rescue company. The company said it would use equity in her house to pay off her debts, and that her credit would be repaired. After a year she thought she'd get her house back.

***

• Her house is in foreclosure, and next week she's facing eviction. Both the foreclosure rescue company and the bank foreclosing on her house deny any wrongdoing.

For the story, see For Desperate Homeowners, Scams Abound (How A Company Promising Help Cost One Woman Her American Dream). Go here for video. loan modification

St. Paul Homeowner Facing Foreclosure Opts For Free City Housing Counselor For Help; Proposal From Loan Modification Firm Didn't Feel Right, She Says

In St. Paul, Minnesota, Minnesota Public Radio reports:

• When a man called Crystal Brown out of the blue promising to modify her loan, the St. Paul single working mother of three thought he was a godsend. "He was very smooth, very nice, very understanding, not critical," Brown said. "He would lead you to believe he's 100 percent on your side, like he's really fighting for you."

***

• He identified himself as an employee of KirkLand Young, a loan modification company based in Miami Beach. Brown agreed to let him fax over some paperwork, and she almost signed the contract. But once she read it, Brown saw that she would have to pay a non-refundable fee of $500. If she accepted the new mortgage, she would have to spend an additional $1,200.

***

• She said something didn't feel right about the arrangement. Brown never sent in the papers. Instead, she sought help from a foreclosure counselor with the city of St. Paul, who offered to work with the lender at no cost.

For the story, see Companies vow to change mortgage terms -- for a price (Loan-modification companies can charge thousands of dollars for this service, even though many nonprofits will do it for free. Housing advocates say the firms represent the latest form of industry predators).

Go here for the contract Crystal Brown refused to sign.

Foreclosure Scams Growing, Continue Hitting Northern California

In Napa County, California, the St. Helena Star reports:

• Rising foreclosure rates in Napa County are supplying scam artists with a steady stream of victims. Willing to do anything to keep their homes and get out of mortgages they cannot afford, these homeowners’ desperation is fodder for deceit.

• “It’s certainly a growing problem, not just here in Napa but throughout the state and country,” Napa County District Attorney Gary Lieberstein said. “It is a reflection of the mortgage scams that we’ve seen coming around nationwide, as well as the financial status of our economy right now.”

***

• [Associate director for Fair Housing Napa Valley Steve] Cogswell said it is impossible to know how many people in Napa County have been targets of foreclosure scams. Fair Housing Napa Valley has had 55 cases in the last 12 months, but “that’s just the people that happen to end up coming in to us,” he said. Many times, the scams go unreported, either because victims don’t realize they’ve been victimized or because they don’t know where to go.

For more, see Foreclosure schemes growing.

One Dead, One Jailed At Illegal "Pay At Door" Bash At Hillside Mansion In Foreclosure; Catered Events In Defaulted Upscale Homes More Common, Say Cops

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

• Los Angeles police have arrested a man in the shooting death of a onetime local basketball star at a heavily promoted New Year's Eve party at a rented Coldwater Canyon mansion.

***

• The shooting [...] is the latest incident involving so-called party houses, sprawling hillside mansions that host illegal, professionally catered and paid events. [...] Police described [the alleged shooter] as a friend of a female party promoter who organized the New Year's bash at the hillside estate on a winding street of three- and four-story houses with canyon and ridge-top views. The property, police said, is in foreclosure.

***

• Police described the event as a "pay-at-the-door, illegal party," a type that has become increasingly popular during the real estate foreclosure crisis. "Unfortunately, we're seeing these in foreclosed homes," Hamilton said of the parties. "You get what you get in that type of situation."

• Fliers for the party invited guests to a "Winter Wonderland," according to several area residents, who declined to be identified. The fliers also requested that partygoers "dress to impress" and advertised appetizers and an open bar.

For more, see Man held in slaying at Coldwater Canyon party in Los Angeles (Police say a dispute over food at an illegal event in a foreclosed mansion escalated into violence. The victim, Felix L. Lang Jr., was a former star basketball player at Valley College).

See also, The Associated Press: Man held for shooting death at New Year's party.

Go here for other posts on vacant or foreclosed homes being used for unauthorized parties. teen parties vacant homes

Connecticut Warns Consumers Against Unsolicited Mortgage, Credit Card Debt Assistance; False Offers Of Help Are A "Scavenger Hunt" Says State AG

From the Office of the Connecticut Attorney General:

• Attorney General Richard Blumenthal issued an urgent consumer warning [last week] about unsolicited calls to consumers offering reduced rates on mortgages or credit card debt.

***

• "Our advice to consumers: hang up on unsolicited offers," Blumenthal said. "This scam victimizes our most vulnerable citizens -- homeowners desperate to save their families and escape financial ruin. This reprehensible ruse -- false promises of reduced rates on mortgage and debt -- is actually a scavenger hunt for private, personal information on consumers that may be illegally exploited. Consumers who divulge details hopeful for better lives will find only deeper financial ruin."

For the Connecticut AG press release, see Attorney General Issues Consumer Alert On Mortgage And Debt Rescue Scam. loan modification

Missouri AG Brings Civil Suit Against Homebuilder For Allegedly Pocketing Customer Cash & Either Failing To Perform Work Or Doing So In Shoddy Manner

From the Office of the Missouri Attorney General:

• The Franklin County Circuit Court has entered an order against homebuilder Jason Woods that prevents him from doing any home repair or construction in Missouri while a lawsuit brought by the Attorney General's Office is pending.

• The lawsuit,(1) filed in October, alleges that Woods, who does business as Timber Ridge Construction, took money for home repair or construction projects from consumers but then either failed to do the work or did the work in a shoddy manner.

For the Missouri AG press release, see Preliminary injunction prevents homebuilder accused of fraud from doing business while AG lawsuit is pending.

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

(1) According to the Missouri AG press release, the lawsuit alleges that Woods entered into a contract with one consumer in which Woods was paid a total of $138,951 to construct a new home on property owned by the consumer. However, Woods allegedly failed to complete the construction of the house per the specifications listed in the agreement; and the work completed was also alleged to have been done using poor workmanship. The lawsuit also alleges the defendant entered into a contract with another homeowner couple to construct a storage building on the couple's property. The couple paid Woods a total of $30,000 to construct the structure, but he failed to do so, according to the AG's press release. StiffingContractorsTheta

Massachusetts AG Continues Effort Against Housing Discrimination

Massachusetts Attorney General Martha Coakley's Office has recently issued news releases in connection with its efforts targeting housing discrimination:

• AG Coakley Obtains Consent Judgment Against Cambridge Realty Company in Housing Discrimination Case: Resolved claims that company discriminated against a disabled Cambridge resident by refusing to rent her an apartment because it did not want to accept the lease requirements of the state-assisted housing program. The consent judgment permanently prohibits Oxford Street Realty, Inc. and its President, Jeffrey Indeck, from discriminating against tenants who have federal or state housing subsidies and requires defendants to pay the tenant $35,000 in damages.

• AG Coakley Obtains Consent Judgment Against Pittsfield Property Owner in Housing Discrimination Case: Resolves claims that Wahconah Grove Realty Trust and its property manager, Douglas Malins, violated state antidiscrimination laws by discriminating against a tenant on the basis of race. The defendants have agreed to pay $10,000 to the tenant as part of the settlement of the case. The complaint alleged that Malins prohibited a tenant’s grandson, who is biracial, from visiting her apartment and that he interfered with the tenant’s right to have African-American guests at her apartment.

• AG Coakley Obtains Consent Judgment in Sexual Harassment Case Against Property Owner and Management Company: Resolves claims against the management company and property owner of a 250-unit apartment complex in Cambridge involving allegations of unlawful discrimination against a tenant and her daughter by allowing an employee to sexually harass them.

Feds Put Squeeze On Vegas Landlords Accused Of Discriminating Against Families With Children; Tenant Gets $30K Settlement To Resolve Claims

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

• The federal government recently settled a complaint against the owners of Las Vegas apartments who allegedly discriminated against families, the third such case in the valley in two years.

• The repeated cases involving hundreds of apartments mean “there definitely is discrimination against families with children” in the Las Vegas Valley, said Chuck Hauptman, a representative of the Housing and Urban Development Department’s San Francisco office of fair housing and equal opportunity.

• He said the agency wants valley landlords to be on notice that this is illegal, a message that’s especially crucial when families with children are among the many seeking rental housing in the wake of the valley’s foreclosure crisis.

• In the most recent case, which was settled in October, HUD, rather than the victim, had filed the complaint, indicating the alleged discrimination was flagrant and easy to prove.(1)

For the rest of the story, see U.S. strikes at landlord bias against children (HUD gets payments to families, message to apartment owners).

(1) According to the story, the allegations were resolved when the landlord agreed to pay the tenant $30,000 and to set aside money for any other victims, as well as to stop the policy of not renting to children. In another case, HUD allegations were reportedly resolved when the landlord agreed to pay $75,000 total to four families the apartment management evicted or attempted to evict. Some of the settlement money was set aside to compensate any victims who come forth in the future.

Failure To Report Living Companion Leads To Hot Water For Alleged Housing Assistance Cheats

Recent Ventura County, California District Attorney prosecutions of housing assistance fraud:

• Nina Marie McMahan was sentenced to one year in the county jail as a result of her guilty plea to a charge of grand theft. McMahan was also placed on felony probation for 36 months and ordered to pay restitution of $49,660 to two public assistance agencies. Under penalty of perjury, McMahan failed to report that her husband was living at the residence and failed to report his earned income as part of the total household income. Go here and go here for the press releases.

• AnnaMarie Tamayo was arrested for felony grand theft for housing assistance fraud. Tamayo is alleged to have received $3,051 in public assistance funds over a three-month period for which she was not legally entitled. Tamayo allegedly failed to report that her boyfriend, who was on felony probation, was also living at the residence. Tamayo was required to report any changes in her household composition to the local Housing Authority within 10 days. Housing authority rules and regulations preclude individuals with a felony conviction from residing in public assistance housing. Go here for press release.

• Juana Nunez was arrested pursuant to a felony warrant for welfare fraud and housing assistance fraud. Nunez is alleged to have received $152,576 in public assistance funds from the two separate government programs for which she was not legally entitled over a period spanning ten years. Nunez allegedly received $19,556 in food stamps for which she was not entitled and also allegedly received $133,120 in housing benefits from the Ventura Housing Authority for which she was not legally entitled. Under penalty of perjury, Nunez failed to report that her boyfriend was living at the residence and failed to report his earned income as part of the total household income. Go here for press release.

Federal Prison Sentences Expected To Get Stiffer As Tanking Real Estate Market Drives Up Lenders' Losses From Mortgage Fraud

Buried in a recent story in the South Florida Sun Sentinel is an observation that prison sentences in federal mortgage fraud prosecutions will begin becoming stiffer than they have been:

• [U]ntil now, the punishments meted out to mortgage fraud offenders have been relatively mild — usually less than five years' imprisonment and sometimes nothing more than probation.

• That's because under federal sentencing guidelines, penalities in such cases are tied to the amount of documented financial loss. When home prices were climbing, fraudsters generally paid off their loans and lenders had no direct losses.

• Now the foreclosure crisis is driving up losses, resulting in stiffer punishment. In [one recent] case, prosecutors and defense lawyers agreed [a mortgage scam defendant's] crimes cost lenders at least $1 million because many of the properties he purchased were subsequently foreclosed on at a loss [he received eight years in prison].

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

Colorado Man Cops Plea To One Count Of Forgery In Alleged Mortgage Scam; Gets Free Pass From Prosecution In Cases Involving 15 Other Properties

In Weld County, Colorado, the Greeley Tribune reports:

• A Greeley man who holds himself out as a real estate broker and builder and is a defendant in a civil fraud case(1) pleaded guilty to forgery [...] in exchange for immunity on other mortgage crimes. Ernest Salazar Jr., 49, pleaded to the felony [...] and faces from one to three years behind bars.

***

• Weld District Attorney Ken Buck said he will ask for jail time but would not discuss specifics. He said he had been talking with Salazar’s attorney prior to the grand jury indictment against Salazar, and agreed to pursue only one felony charge. “I think that our resources are best spent pursuing the other targets we have identified,” Buck said. “I’d say stay tuned.” Buck said he couldn’t elaborate about who else may have been involved.

• Salazar said he would plead guilty to forgery if the Weld District Attorney’s Office agreed not to pursue charges in cases involving 15 properties(2) he worked with through his businesses, Sunset Construction, Sunrise Mortgage, A-1 Action Construction and All-Pro Mortgage.

For more, see Greeley man pleads in forgery case in deal with Weld DA.

(1) According to the story, the civil case against Salazar was filed in February, and alleges that he defrauded a man and other property owners in a series of real estate flipping schemes throughout Greeley and Windsor, designed to either steal equity, use others’ credit to obtain loans and skim off the top, and flat out steal money. Reportedly, the civil suit claims that the damage done to individual investors exceeds $800,000.

(2) Salazar's ostensibly sweet plea bargain may have possibly been obtained as a result of his "winning the race to the prosecutor's office" - which has been described as a natural phenomenon that arises whenever the government has multiple targets in its crosshairs. In this case, Salazar, the first "fish" to get to the prosecutor, negotiates a great plea deal for himself in exchange for an agreement to "sing" against the other "fish" (ie. his confederates in the alleged scam). The more "fish" Salazar can help the prosecutor "reel in" (through convictions), the less time he'll have to spend in the "frying pan" (ie. prison) when the "fish fry" takes place (ie. sentencing day).

Sacramento Man Cops Guilty Pleas In Alleged "Cash Back" Fraud Scam Involving $11M+ In Fraudulent Loan Activity, Approximately 20 Homes

In Sacramento, California, United States Attorney McGregor W. Scott (Eastern District of California) announced that Derek Davis, aka Terry McCullough, 62, of Sacramento, entered guilty pleas in an alleged "cash back" mortgage swindle involving in excess of $1 million in stolen funds and more than $11.3 million in fraudulently obtained loans on approximately 20 homes in the Sacramento region. The losses caused by Davis's conduct exceed $2,500,000, according to prosecutors. From the press release:

• According to [prosecutors], Davis admitted that [...] he participated in a mortgage fraud scheme in which several individuals purchased approximately 20 residential real properties using a form of 100 percent financing called "80/20." In the transactions, Davis caused material misstatements to be made about the purchasers’ monthly income and intent to occupy the property.

• He further admitted that in the transactions an amount approximately equal to the difference between the purchase price and the true market price of the properties was credited as "cash back" at the close of each escrow to the bank account of a Nevada Corporation he controlled [...]. Davis caused these credits to be concealed from lenders. [...] In total, approximately $1,400,000 was transferred to [the Nevada corporation] from escrow companies in connection with the approximately 20 real property transactions.

For the U.S Attorney press release, see Sacramento Area Fraudster Enters Guilty Pleas In 'Cash Back' Mortgage fraud Scheme.

For earlier reports on this case, see:

• The Sacramento Bee (10-11-08): Fraud charged in home loans in three counties,
• U.S. Attorney press release (10-10-08): Two Indicted In "Cash Back" Mortgage Fraud Scheme.

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

Virginia Developer Faces Forgery Charges Involving Bogus Certificates Of Occupancy Used To Push Thru Home Sale Closings

In Gloucester County, Virginia, the Daily Mail reports:

• Four Gloucester county supervisors and the sheriff have seen indictments handed up by a special grand jury in July dismissed or not prosecuted, but developer George Woodhouse is still facing 10 felony counts.

• Woodhouse — who developed the unfinished Dunston Hall subdivision, as well as the Bray Woods subdivision — is scheduled to go to trial in February on charges involving forged county certificates of occupancy for five homes in March and June 2007.

• The forged certificates of occupancy allowed the closing of sales on the homes and the release of money from Woodhouse's lender, EVB Mortgage, earlier than when the county would have issued genuine documents. All homes involved ultimately passed required inspections.

For more, see Forgery trial for Gloucester developer scheduled for Feb. (George Woodhouse will face 10 felony counts related to forged county certificates of occupancy for five homes).

ACORN Protestors Picket Mortgage Company On Behalf Of Homeowner Facing Foreclosure; Claims Lender Screwed Up In Accounting For Loan Payments

In Fort Worth, Texas, the Fort Worth Star Telegram reports:

• Eight people chanted, sang protest songs and marched with placards Wednesday outside the Fort Worth office of Saxon Home Mortgage in support of a man facing foreclosure despite his assertions that he was not in arrears and that Saxon had mislaid his property-tax payments.

***

• The 36-year-old homeowner said he had gotten no clear answers from Saxon’s customer service until he asked ACORN to intervene. "Without them, I know I wouldn’t have gotten anywhere," he told the Star-Telegram. "I’d still be getting the runaround."

For the story, see ACORN protests at Fort Worth mortgage company over planned foreclosure.

HELOC Freeze Puts Squeeze On Family's College Tuition Plans

In Algonquin, Illinois, the Chicago Sun Times reports:

• Jim and Cindy Ranallo are determined to give their two sons one thing they don't have: a four-year college degree. But the home equity line of credit they were relying on to get both boys through school was unexpectedly frozen by JPMorgan Chase weeks before their elder son's recent tuition payment was due.

***

• The Ranallos' situation is a familiar one for hundreds of thousands of Americans who have found their home equity credit lines frozen or reduced this year. Their struggle to send their children to college also is familiar to parents patching funds together for higher education, constantly worried they will come up short.

***

• Hysterical after opening the bank's letter, Cindy Ranallo feared her son would be kicked out of school because they couldn't afford it. A [college] official reassured the Ranallos that they would find a way for their son to stay, offering additional student loans, which the family accepted.

For more, see Frozen home equity loan hurts family (ECONOMY'S VICTIMS: Freezing of home equity loan threatens to kill Algonquin family's dream of sending sons to college).

The U.S. Office of Thrift Supervision recently issued a six-page letter of guidance which generally explains what obligations lenders have in connection with the freezing of home-equity lines of credit [HELOCs].

Go here for other posts on Frozen HELOCs.

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:

• Debt collector drowns Lucas County court with tax-lien foreclosures: Plymouth Park Tax Services LLC, doing business as Xspand, has flooded the Lucas County, Ohio courts with tax lien foreclosures, filing more than 100 in two days - threatening residents during the Christmas season with the possible loss of their homes.

• 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:

• Banks Not Taking Care of Foreclosed Houses During Winter: The huge temperature swings and frozen pipes this winter are causing huge damage to houses no longer in use.

• 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