Thursday, January 22, 2009

Trump Tower Tampa Going Down The Tubes?

In Tampa, Florida, the (Un)Real Estate blog at the St. Petersburg Times reports:
  • The fading hopes of Trump Tower Tampa just got fainter. A Tampa bankruptcy judge has ruled that Colonial Bank, owed $3.5-million by tower developer SimDag LLC, can proceed with its foreclosure against the project’s riverfront lot at 100 S. Ashley Drive.

***

  • Trump Tower was supposed to be the region’s tallest skyscraper, but could never get a $200-million construction loan. Its namesake, New York mogul Donald Trump, canceled his licensing agreement with the project in September.

Source: Trump Tower Tampa fated for foreclosure?

Title Closing Company Owner Gets 10+ Years In Cash Back Mortgage Scam

In Miami, Florida, the South Florida Business Journal reports:
  • A Miami woman was sentenced in federal court on Thursday to more than 10 years in prison and ordered to pay more than $6 million in restitution for her role in a multimillion-dollar mortgage fraud scheme. Magile Cruz, who also went by several aliases, pleaded guilty in November to charges that she engaged in a scheme to obtain fraudulent mortgage loans on properties in Miami-Dade and Broward counties.(1)

For more, see Miami woman sentenced in multimillion-dollar mortgage fraud.

Go here for the U.S. Attorney press release: De Facto Owner Of Mortgage Companies And title Agencies Sentenced In Multi-Million Dollar Mortgage Fraud Scheme.

For earlier post and more details on this case, see Florida Feds Obtain Indictment In Alleged Mortgage Scam Involving 79 Homes, $24M In Fraudulently Obtained Loans, $5M In Lender Losses.

(1) Reportedly, Cruz, who owned several mortgage and title companies, along with other co-conspirators, would recruit and pay straw buyers for the properties. They then would prepare fraudulent loan applications on behalf of the straw buyers, using false financial documentation. Once the mortgage applications were approved, the lenders would wire the loan proceeds to her companies for closing.

Civil War Amongst Interest Holders Of Securitized Mortgages May Be On Horizon As Investors Begin To Fight Over Foreclosure, Loan Modification Issues

In Boston, Massachusetts, The ABA Journal reports:
  • A default on debt tied to Boston’s John Hancock Tower highlights the kind of legal fights that will likely break out among investors who have varying rights to repayment after property foreclosures.

  • When mortgages are pooled and securitized, the investors purchase bonds that are grouped by payment priority known as tranches. Those with the lowest risk are first in line for payment if some of the receivables go into default. Once they are paid, those at the next risk level have a right to payment, and so on down the line in a “waterfall” of cascading payments.

  • In the Hancock Tower dispute, investors who believe they will be in the money because of more senior rights to repayment are seeking an immediate foreclosure, the Wall Street Journal reports (sub. req.). Those with lesser rights believe that declining real estate values mean they won’t get paid after foreclosure. This group is instead urging extended time for repayment of the debt, the story says.

  • The securitization agreement anticipated a fight over foreclosure decisions, and provided that the most junior creditor still in the money has the right to decide whether to foreclose. But the creditors are arguing over which one meets the agreement’s definition of “controlling holder” with the right to make the foreclosure decision, the story says.

  • John Zizzo, a real-estate lawyer at Cadwalader, Wickersham & Taft, told the Wall Street Journal that the mortgage crisis is bringing the legal issues to the fore. "Tranche warfare is starting," he said. "It has never been tested before this current market meltdown."

Source: Mortgage Meltdown Results in ‘Tranche Warfare’

For The Wall Street Journal story, see Hancock at Center of 'Tranche Warfare' (subscription required; those without a subscription, go here for a copy & pasted version of the entire story).

For more on the trouble facing the Hancock Tower, see:

Owners Desperate To Rent Out Their Homes The Target Of Anti-Tenant Neighbors, Municipalities

A recent column at SmartMoney.com gives a look at the problems facing homeowners in rental-restricted communities - whether it be those who need to move, can't unload their home, and want to bring in some quick cash by renting to tenants; or those who remain and wish to limit rentals, arguing that a failure to do so will result in the neighborhood's quality of life will go down the tubes:
  • [F]or owners who have to move or who own houses as investment properties, short-term rentals can bring in some cash and keep them from having to sell at a big loss. But instead of greeting renters with hosannas, many towns and subdivisions are barring their doors, arguing that tenants usher in neglect, misbehavior and even violent crime. Almost 60 million Americans live in developments governed by homeowners associations, and by some estimates as many as 40 percent of those communities enforce restrictions that keep owners from becoming landlords.

For more, see New Battle Affects Home Values: No-Rental Rules.

Owners Desperate To Rent Out Their Homes The Target Of Overseas "Cash Back" Rent Scams

In Nashville, Tennessee, WSMV-TV Channel 4 reports:
  • Police said they have seen an increase in scammers hoping to make money from desperate property owners during the current recession. Many people are looking for renters to help them make their mortgages and avoid foreclosure, but that is putting them in a vulnerable position to be bilked.

For more on a story of a homeowner desperate to rent out her home, who received a $5,000 check from a prospective tenant from overseas, with instructions to deposit the check, keep $1,900 for the lease, and wire back the balance, see Police See Increase In Home Rental Scams (Home Owners Become Desperate To Rent Property).

Federal Law Protects Against "Due On Sale" Clauses When Inheriting Mortgage Property From Relatives

A Real Estate Mailbag Q&A article by attorney and syndicated columnist Benny Kass serves as a reminder of the Federal law that protects those who inherit a mortgaged home of 4 units or less from relatives. Specifically, it prohibits lenders from demanding that the new owner(s) immediately fork over the entire outstanding balance on the loan by exercising a "due-on-sale" clause in the mortgage, even though all the payments are current.
  • Federal law - called the Garn-St. Germain Depository Institutions Act of 1982 - protects you. [...] According to that law, a lender "may not exercise its option pursuant to a due-on-sale clause upon ... a transfer to a relative resulting from the death of a borrower."(1)

***

  • Congress recognized that the due-on-sale clause was unfair to many people, especially in situations [...] where you inherited the property - and the existing loan. You should send your lender a copy of [the deceased owner's] death certificate, and merely advise that you will be taking over the mortgage payments. There is absolutely nothing that the lender can do to hurt you.

For the column, see Federal law protects those who inherit homes.

(1) For the Federal law, see 12 USC 1701j–3(d)(5) - Preemption of due-on-sale prohibitions (Exemption of specified transfers or dispositions).

Fannie To Tack On 3/4% Fee On All Condo Loans Made With Less Than 25% Downpayment

The Chicago Tribune reports:
  • With many lenders already casting a wary eye on condo loans because of their default rate, Fannie Mae has upped the ante by adding a fee of .75 percent of the loan amount of a 30-year fixed mortgage, for borrowers who put down 25 percent of the purchase price or less, effective April 1. In simple math, for a condo priced at $300,000, with a mortgage of $240,000 (a 20 percent down payment), if Fannie will be purchasing the loan from your lender, it will assess the buyer an additional $1,800.

For more, see Fannie Mae's added fee to crunch condo buyers.

Wednesday, January 21, 2009

Free County Bar Walk-In Legal Clinic For Queens Homeowners Facing Foreclosure

In New York City, The Queens Gazette reports:
  • Queens homeowners facing foreclosure can get free legal advice from lawyers trained by the Queens County Bar Association at the association's free, walk-in legal clinic, Wednesdays, 5 to 8 p.m. or Fridays, 9 a.m. to 4 p.m. No appointment is necessary.

  • Homeowners should bring all papers relating to the purchase of their residence and all communications from the lender. You may be referred to certified not-for-profit housing counselors who can work with lenders in an attempt to modify their mortgage.(1)

***

  • This volunteer legal service is made available by the Queens County Bar Association's pro-bono legal service program. Homeowners needing assistance are urged to take advantage of this offer on Wednesdays or Fridays, at the Queens Civil Court, Room 160, 89-17 Sutphin Blvd., Jamaica. For more information, call 718.291.4500.

Source: Bar Association Has Pro Bono Assistance For Homeowners.

(1) Homeowners with an upcoming court-mandated foreclosure settlement conference may be assigned an attorney who will voluntarily represent you at the settlement conference. Or, a homeowner's case may be taken by a legal service program to represent them in the entire foreclosure litigation process. Staff from the Legal Aid Society and Legal Services to the Elderly will be there to help.

Kansas Feds Nail Two In Upront Fee, Fractional Interest Deed Transfer Rescue Scam; Bogus Bankruptcy Petitions Filed To Stall Foreclosure Actions

The U.S. Attorney's Office in Topeka, Kansas announced:
  • [Isaac Yass, 42, and co-defendant Robert Andrew Blechman, 39, both of Los Angeles, California] have been convicted of running a scam in which homeowners who were behind on their mortgage payments paid them to hold off foreclosure by filing fraudulent bankruptcy petitions.
According to the U.S. Attorney press release, evidence showed that:
  • Yass solicited homeowners who were going through foreclosure proceedings. He told them that for a fee he could help them keep their houses.
  • The defendants filed fraudulent bankruptcy petitions in federal bankruptcy courts in Topeka, Wichita and Kansas City, Kan. The petitions were filed in the name of nonexistent individuals with businesses that claimed to be part owners of properties that were in foreclosure.
  • The result was an automatic stay in the foreclosures, halting any further actions by creditors against the properties.
The Feds also alleged:
  • The defendants used the U.S. Postal Service to deliver fraudulent petitions to the bankruptcy court. The petitions contained false names and Social Security numbers, and addresses for the creditors that were in fact mailboxes or UPS Store locations in Kansas.
For the press release, see Los Angeles Men Convicted On Charges Of Filing False Claims In Kansas Bankruptcy Courts (Isaac Yass claimed that for a fee Stopco could keep homeowners in foreclosure from losing their homes).

For a report issued by a California Federal Bankruptcy Court task force detailing the types of foreclosure scams involving the abuse of the bankruptcy courts, see Final Report Of The Bankruptcy Foreclosure Scam Task Force.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams. loan modification

California Woman Gets 12+ Years In Ponzi Scheme Scamming 600+ Into Investing $18M+ In Phony Firm Purportedly Helping Homeowners Facing Foreclosure

In Los Angeles, California, The Associated Press reports:
  • [J]eanetta Standefor, 40, of Altadena, was sentenced to 151 months in prison and ordered to pay more than $8.6 million in penalties. [...] Prosecutors said Standefor ran a Ponzi scheme between 2005 and 2007 that lured more than 600 investors in California, Nevada and Georgia into investing money in her company, which purported to use the funds to help homeowners facing foreclosure get current on their mortgage payments.(1)

For more, see Calif woman sentenced in real estate scheme.

See also U.S. Attorney (Los Angeles) press release: Woman Who Promised To Help Homeowners Avoid Foreclosure Sentenced To Over 12 years In Prison For Taking millions From Investors In Fraudulent Scheme.

(1) According to the U.S. Attorney's Office, Standefor’s fraud was what is commonly called “affinity fraud,” that is, a fraud directed at a particular community. Standefor and AFG targeted investors in the African-American community through a now-defunct Web site, word of mouth, real estate seminars and testimonials by other seemingly successful African-American investors. She reportedly cheated investors out of $18 million.

Woman, Disbarred Attorney Among 3 Charged In Theft Of Dead Grandfather's Home; Accused Of Pocketing $100,000+

Illinois Attorney General Lisa Madigan announced [last week]:
  • [W]arren Nickel, 59, of Tinley Park, Adrian Garner, 37, of Calumet Park, and Chiffon Mars, 38, formerly of the Chicago area, each face four counts of theft over $100,000 and four counts of theft over $10,000. Nickel also faces a charge of false impersonation of an attorney, and Garner faces one charge of forgery.

  • An attorney general's office investigation revealed Nickel and Garner allegedly executed a series of fraudulent documents in December 2005 as part of the sale of Jack Anderson's Chicago home after his 2004 death.

  • Mars, who was Anderson's step-granddaughter and a beneficiary of Anderson's estate, sold Anderson's property to a third-party in December 2005, without the knowledge and consent of the Anderson estate executor or Mars' co-beneficiary. Nickel served as her attorney in the transaction, even though he was disbarred from practicing law in 2004.(1)

For the Illinois AG press release, see Madigan: Three Charged With Fraud And Forgery In Real Estate Scam.

(1) According to the Illinois AG press release, Nickel and Garner face additional pending charges in a separate Cook County case based on a similar scheme in which they allegedly forged documents in fraudulent real estate transactions in an effort to put an elderly victim out of her home. Nickel is serving 30 months felony probation in Cook County for his previous conviction on five counts of forgery for stealing more than $93,000 from an estate. And in 2004, the Attorney Registration and Disciplinary Commission disbarred Nickel from the practice of law. He is also serving 30 months felony probation for a second conviction on six counts of false impersonation of a lawyer.

NYC Proposed Statute Would Impose Licensing-Related Requirements On Upfront Fee Loan Modification Firms

In New York City, the Brooklyn Daily Eagle reports:
  • The City Council has proposed legislation that will increase the regulatory requirements for distressed property consultants. This bill, when signed into law, will crack down on people attempting to prey upon homeowners facing foreclosure.

***

  • The proposed legislation would give authorities a way to determine who is offering a legitimate consulting service by requiring licensing.(1)

For more, including what else the proposed bill does, see City Tackles Those Who Prey on Homeowners (New Legislation Will Require Licensing of Property Consultants).

(1) For those loan modification firms who purport to review homeowners' loan documents in search of violations of consumer lending laws, as well as violations of other laws relating to bringing foreclosure actions, there already are licensing requirements. Such work requires a law license. Providing these so-called forensic audits of loan documents directly to the consumer without either being an attorney, or without being under the direct supervision and control of an attorney, arguably constitutes the unlicensed / unauthorized practice of law.

Go here and go here for other posts on issues relating to attorneys, loan modifications, and the unlicensed/unauthorized practice of law. See also, Unlicensed Practice Of Law Becomes An Issue With Some Loan Modification Firms.

Middle Class Joining The Poor In Inability To Find Affordable Legal Help, Says Iowa Chief Justice

In Des Moines, Iowa, the Des Moines Register reports:
  • Iowa’s state courts face higher costs, greater language barriers, a bare-bones workforce and more needs for low-income residents as they strive to ensure justice, the state’s top judge said [last week]. Iowa Supreme Court Chief Justice Marsha Ternus acknowledged the state’s budget problems in her annual address to lawmakers and promised to reduce operating costs as the courts continue to serve Iowans.

One of the serious challenges for Iowa’s courts, as outlined by Justice Ternus, is:

  • A growing number of Iowans have unmet needs in civil court because they cannot afford a lawyer, Ternus said. The problem lacks a simple solution, she said, but will probably require a combination of government aid and help from the legal community. “We have long recognized that the cost of legal representation is beyond the reach of the poor, but it is now often beyond the reach of the middle class,” Ternus said. “The end result: we have equal justice for some, but certainly not for all.”

  • Ternus asked lawmakers to maintain current funding levels for legal organizations that serve low-income Iowans, which she said are more important than ever as the economy staggers.

For more, see Chief Justice: Iowa courts stretched 'painfully thin.'

Tuesday, January 20, 2009

Investigative Report Links High Foreclosure Rates To Small Number Of Real Estate Pros

In Southern California, North County Times reports:
  • A tiny number of real estate brokers is associated with an inordinately large number of foreclosures in North County, raising questions about how just a few salesmen could play a role in sending hundreds of families into foreclosure and causing millions of dollars in losses for lenders.

***

  • Certainly, no single real estate office or group of agents can be blamed for the economic meltdown. However, great financial losses seem linked to the activities of a small number of professionals.

  • A North County Times investigation into thousands of foreclosure records, along with interviews with buyers, reveals a pattern that suggests some real estate agents specialized in clients ---- chiefly Latinos ---- who couldn't afford to buy homes, and helped them buy as many as possible.

For the rest of this investigative report, see HOUSING: Handful of brokers linked to glut of local foreclosures (21 real estate offices had huge rates of failure among buyers).

2009: The Year Of Really Bad "Rent-To-Own" Home Purchase Contracts?

In Newport, Minnesota, Minnesota Public Radio reports:

  • Melissa Joseph, 28, thought her rental house in Newport was a lucky break. She and her fiance have shaky credit, so they can't easily qualify for a mortgage. They thought buying a house with a rent-to-own agreement was an easier path to homeownership. Instead, they are involved in a dispute with a landlord who Joseph said hasn't repaired the leaky roof as he promised. Joseph said she and the landlord have argued over who said what.

***

  • But now, who promised what is beside the point, because the home has fallen into foreclosure. Under current law, that means Joseph's contract, and the thousands of dollars she put down, are gone. There is nothing in Minnesota law governing such rent to own deals. And that, said Lutheran Social Services' Dan Williams, is a big problem.

  • "I really worry that we are going to look back on 2009 and say this was the year of really bad contract-to-own agreements and really bad contract for deeds," he said.(1)

For more, see Rent-to-own homebuying on the rise, and so are problems.

Go here and go here for stories on how easy some tenants found it in getting screwed over in lease/option, "rent to own" and "contract for deed" real estate deals.

(1) Acording to the story, Williams said the surplus of foreclosed homes in bad condition is attracting people looking for a cheap deal on a house. For many buyers, the only option may seem to be a rent-to-own arrangement or contract for deed with a cash-strapped seller. There are no hard numbers tracking this trend but there are widespread reports that these deals are on the rise. rent to own lease purchase option scams yellowstone

Condo Residents Forced From Homes As HOA's Failure To Pay Utility Bills Results In Water & Electric Shutoffs, Causing City To Condemn Building

In Danville, Virginia, GoDanRiver.com reports:
  • Cabin Lake Apartments have been emptied of residents, the doors have been boarded up and its fate — and the fate of people who owned the apartments — is uncertain. The complex was condemned when majority owner Raymond Pyant failed to pay the utility bill, even after Danville Utilities gave him extensions and set up payment plans to bring his account up to date.

  • Pyant, who also was president of the Unit Owners Association, collected money from the residents to pay utilities that were used cooperatively by the residents. [...] Tenants and owners all had to move out as soon as the building was condemned for not having water.(1)

For more, see Cabin Lake boarded up, residents out.

For story updates see:

(7-2-09) Danville apartment complex fire ruled arson:

  • A fire at a Danville apartment complex Thursday morning has been ruled arson. The fire started a little before 4 a.m. at the former Cabin Lake Apartments. According to a news release, the building was unoccupied and was under renovation at the time. Investigators believe the fire started on a second floor deck. Police say a man wearing dark clothes and a white hoodie was seen leaving the area shortly before the fire was spotted. He was traveling on foot towards Piney Forest Road. Cabin Lake was auctioned off in March after the former owner, Raymond Pyant, failed to pay several months worth of water bills to the city of Danville. Those defaulted payments led to the condemnation of Cabin Lake and the foreclosure auction.

(7-2-09) Cabin Lake fire ruled arson:

  • The fire damaged or destroyed 24 units. Those units were unoccupied and under renovation at the time of the fire. No one was injured, said Bryan Shields, acting assistant chief for the Danville Fire Department.

(3-16-09) Cabin Lake apartment complex to be sold to highest bidder today:

  • Pyant, who lives in Richmond and owned 48 units at Cabin Lake Apartments, was responsible for the condemnation of the complex when he failed to meet his agreement with the city to pay several months’ worth of water bills in January. Problems at Cabin Lake began in October. Residents said they were surprised when their utility services were suddenly cut off by the city since the cost of utilities was included in the rent. Though many units were owned privately, Pyant was responsible for paying the water bill on all units, none of which had private water meters, and the power bill on some that didn’t have their own electricity meters, city officials said.

(3-17-09) Cabin Lake units under new ownership:

  • Properties owned by R&C Investments and its representative, Raymond Pyant, were auctioned off yesterday as a result of foreclosure proceedings by the note-holder, Springfield Financial Company LLC.

(1) Reportedly, one resident who has owned his apartment for thirty years expressed concerns over (a) how unit owners will cope with having to make mortgage payments on those apartments while having to live elsewhere, (b) pipes that will burst during the cold weather, and (c) how there is no lighting at all at the complex, which will make the complex even more of a target for looters as the vandalism has already begun.

Indiana To Lead U.S. In Most Trained Judges, Pro Bono Lawyers & Mediators To Fight Foreclosures, Promises State Chief Justice

In Indianapolis, Indiana, WTHR-TV Channel 13 reports:
  • [S]upreme Court Chief Justice Randall Shepard in his annual state of the judiciary Wednesday pointed out that last year Indiana saw more new foreclosure lawsuits than new divorce lawsuits. Now he has pledged to get the judiciary involved in the Indiana Foreclosure Prevention Network headed up by Lt. Governor Becky Skillman.

  • "I've told the Lt. Governor the Judicial branch would like to join in this campaign and she has agreed and whatever else we are able to contribute I promise you this, by next summer Indiana will have trained more judges and pro bono lawyers and mediators to help people who are facing foreclosure than any other state in America," said Shepard.

Source: IN chief justice: Indiana sees more foreclosures than divorce lawsuits.

Northern California Woman Faces Eviction After Foreclosure Rescue "Life Preserver" Turns Out To Be An Anchor

In Northern California, the Redding Record Searchlight reports on the story of a local homeowner who was facing financial trouble and looking for help to save her home from foreclosure. Facing mounting debts, she took a step that would ultimately cost her her home.
  • "I saw this ad on TV saying, 'We can help you,' " she said. "So I called them because I was in trouble." Next thing she knew, she was in a Redding title company in April 2006 deeding her home to a Redding man and signing a lease-option contract. She said she got $3,000 out of the deal that went to pay bills. "All of a sudden I realized I was giving them total control of the property, but if I hadn't done that we would have been out," [she] said. She hoped to buy the property back after two years. [... She] acknowledges her decision may not have been the best, but she acted under the extreme pressure of mounting debt.

She now faces a February 8 eviction date.

For the story, see Redding woman's efforts to save her home end in foreclosure.

Monday, January 19, 2009

Countrywide Faces Civil RICO, RESPA Charges In Washington Class Action Suit; Accused Of Using Do-Nothing Subsidiary To Inflate, Pocket Appraisal Fees

In Seattle, Washington, the law firm Hagens Berman Sobol Shapiro LLP announced last week:
  • A group of Washington homeowners this week filed a lawsuit against Countrywide, a wholly owned subsidiary of Bank of America (NYSE: BAC) and the nation's largest mortgage company, claiming the mortgage giant illegally rigged the appraisal process in a scheme to boost profits at the expense of homeowners and independent appraisers.

  • Filed under the Racketeering Influenced and Corrupt Practices Act (RICO), the suit claims that Countrywide forces homeowners to use its wholly owned subsidiary LandSafe, for appraisals. The company then turns around and subcontracts the work to independent appraisers while charging homeowners as much as 200 percent of the actual cost of the appraisal.

***

  • The lawsuit, filed in U.S. District Court in Seattle, seeks to represent all homeowners who purchased or refinanced their home through Countrywide and LandSafe, and asks the court to award plaintiffs damages. [...] The lawsuit cites violations of federal law under RICO and RESPA. Other counts include unjust enrichment, breach of fiduciary duty and violation of California unfair competition law. You can learn more about this case by visiting www.hbsslaw.com/CFChomeowners.

For the press release, see Hagens Berman Files Class Action Against Lending Giant Countrywide.

For the lawsuit, see Clark v. Countrywide Home Loans, Inc., et al.

Thanks to Mike Dillon at GetDShirtz.com for the heads-up on the story.

Twice-Jailed "Priest" Accused Of "Preying" On Builders, Leaving Them "On Their Knees" After Clipping Them For Upfront Fee$ On Sour Loan Promises

Much like financially strapped homeowners trying to save their homes, it appears that some builders and developers whose financing sources have dried up can be equally vulnerable to upfront fee, finance-related deals that may not be kosher. In this light, the St. Petersburg Times recently reported the story of THIS MAN:
  • [T]he Very Rev. Father Barney Canada, who ran Providence Funding, a self-proclaimed faith-based commercial lender headquartered near the University of Notre Dame. In his black clerical garb and white collar, Canada claimed to be a priest from a shadowy 19th-century offshoot of the Roman Catholic Church.

***

  • "He comes across as legitimate and knowledgeable with the correct connections. We played the game,'' [one Miami developer who claims Canada clipped him for $300,000] says. "I've been burned by four or five other people, too. But not anywhere near that amount.''

  • Canada used his priestly routine to take developers across Florida and beyond for upward of a million dollars in fees the past year, records show. Not a single loan has closed, and none of the applicants knew that Canada had been incarcerated twice in the 1990s for running "advance fee" lending scams that defrauded businessmen just like themselves.

For more, see Father Barney takes fees, leaves a "host" of developers behind.

Financially Strapped Builder Charged With Stripping Appliances From Unsold Homes Encumbered By Bank Lien

In Gloucester, Virginia, the Daily Press reports:
  • Embattled Gloucester developer George Woodhouse was arrested on charges of grand larceny Tuesday, less than a month before he is due in court to answer to 10 felony counts of forgery.(1)

  • Woodhouse, 39, of Hayes, was charged with grand larceny in connection with a Dec. 22 incident at Dunston Hall, one of several unfinished housing subdivisions planned by Woodhouse in Gloucester. Several items, including microwaves and ceiling fans, were removed from two unoccupied houses, said Commonwealth's Attorney Robert Hicks.

  • The items, as well as 17 lots at Dunston Hall, are subject to a lien filed by EVB bank against Dunwood Holdings, a company formed by Woodhouse and his wife, Abigail. The bank won a $7 million judgment in September against Dunwood and since has been foreclosing on company assets. S. Miles Dumville, a Richmond attorney representing EVB, said the bank has yet to foreclose on Dunston Hall properties. Dumville contends that no one is allowed to remove items from the houses because of the lien.

For more, see Embattled developer charged with larceny (George Woodhouse is accused of taking items subject to a lien from two unoccupied houses).

Go here for other posts on pre-foreclosure homeowner fixture stripping.

(1) A special grand jury in July charged him with forging five certificates of occupancy, actions that resulted in 10 felonies. The documents allowed Woodhouse to close on the sales of houses and receive money from his lender, EVB Mortgage, before the county would have issued real certificates. See Forgery trial for Gloucester developer scheduled for Feb. foreclosure fixture stripping apple

Mortgage Fraud Flood Flowing Through Fort Worth DA's Office

In Fort Worth, Texas, the Fort Worth Star Telegram reports:
  • Three years ago, it was rare for a Tarrant County prosecutor to see a case alleging mortgage-loan fraud. Now, the district attorney’s office is covered up in them. "We have been hit with a tsunami of mortgage fraud," said Joe Shannon, chief of the economic-crimes unit of the Tarrant County district attorney’s office.

  • Investigators estimate that they have identified more than $42 million in mortgage scams in Tarrant County. The district attorney’s office now has an investigator who works full time on such cases. Last week alone, seven new cases were referred to the economic-crimes unit. And the FBI doesn’t even consider Texas to have a "significant mortgage-fraud problem." That designation goes to California, Florida, Michigan, Nevada and Utah, among other states.

For more, see Mortgage-fraud cases are flooding into Tarrant County district attorney’s office.

Sunday, January 18, 2009

Streetlights To Entire Subdivision Shut Off For Failure To Pay Electric Bill; Lower Maintenance Fee Collections Leaves HOA Low On Cash, High On Crime

In Mecklenburg County, North Carolina, The Charlotte Observer reports:
  • Streetlights have been dark for months in Hathaway Hills, a 4-year-old subdivision in west Mecklenburg County. But it took a tragedy to highlight the problem's urgency. When Louis Navarre was shot to death in his home Jan. 2, the killers escaped by running down the pitch-dark streets.

***

  • Duke Energy cut the lights off in October, after the homeowners association stopped paying the electricity bill. The darkness has encouraged home burglaries and car break-ins, residents said. It has alarmed parents whose children wait for the school bus before dawn. It's also a sign of Mecklenburg County's foreclosure crisis. “It's one of the little things that can cause a major problem,” said Mayor Pat McCrory. “It shows the foreclosure situation has an impact on other things that most people wouldn't think of.”

***

  • The [foreclosing] banks do not pay homeowner dues, and often absentee landlords don't either, property management officials say, so basic services start to go, including lighting, landscaping and security patrols.

For more, see What happens when the lights go out (Hathaway Hills can't afford to keep the streetlights on. In the dark, there have been more break-ins. Now a neighbor is dead).

Lease-Options, "Rent To Own" Gaining In Popularity As A Way To Unload An Unsold Home?

The South Florida Sun Sentinel reports:
  • In South Florida's depressed housing market, some people are taking a wait-and-see approach by renting with an option to buy later. Leasing is still more common with cars, but the concept is spreading. Sellers are willing because they're struggling to unload their properties, and a rent-to-own contract brings in cash. Prospective buyers also are game because credit is tight, and they can build equity while they take time to qualify for mortgages.

For more, see Rent-to-own home leases becoming more popular (Lease-to-own agreements risky for owners, tenants).

For a somewhat critical view of rent-to-own deals, see Minnesota Public Radio: Rent-to-own homebuying on the rise, and so are problems.

Go here and go here for stories on how easy some tenants found it in getting screwed over in these lease/option, "rent to own" and contract for deed real estate deals. rent to own lease purchase option scams yellowstone

Attorney Declared Competent To Stand Trial On Charges Of Stealing Refinancing Proceeds From Two Clients

In Fayette County, Pennsylvania, The Herald Tribune reports:
  • Although a Fayette County judge found that a former deputy prosecutor has experienced declined intellectual function because of his ailing health, he ruled the former attorney is competent to stand trial. Mark F. Morrison, 51, of Hopwood is accused of stealing nearly $100,000 from two clients. State prosecutors alleged he stole money from mortgage refinancing for two clients in 2005.

For more, see Morrison ruled competent to stand trial.

For earlier report on this story, see Ex-attorney Morrison's ability to face theft trial disputed.

For story update (3-3-09), see: Lawyer's theft trial delayed.

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

Connecticut Man Faces Charges Of Fleecing Elderly Woman Out Of $125K+, Leaving Home In Foreclosure With $15K+ In Back Taxes

In New London, Connecticut, the Norwich Bulletin reports:
  • [R]ichard K. Wallace, 55, faces the charge of first-degree larceny for conning Dorothy Dinallo out of at least $125,000, police said. Wallace claims he is a longtime family friend and was taking care of the family and managing their finances after the death of Dinallo’s husband.

***

  • At the time, Wallace had power of attorney and lived with Dinallo and her two daughters. Police said Dinallo owes more than $15,000 in back taxes and the home was in the process of foreclosure.

For the story, see Accused con man has motion denied (Police say 55-year-old defrauded elderly woman).

Go here, here, here, here, here, and here for other posts on elder financial abuse. FinancialAbuseOfElderlyAlpha

More On Fires & Foreclosures

Recent stories on fires & foreclosures:
  • Lynn, Massachusetts: Acting Fire Chief James Carritte said an explosion in a natural gas line may have ignited the three-alarm fire in a home housing eight people. Several residents at home in the triple-decker at the time, including children, escaped unharmed. Ten others live in the neighboring home, which was exposed to heavy smoke and spraying water but did not catch fire. A fire investigator said he spoke to a man who identified himself as the building owner and said the property is in foreclosure proceedings. "He said he was giving it back to the bank Monday," the investigator said, adding the man said the building was not insured. See Gas explosion eyed as cause of Lynn fire.

  • Youngstown, Ohio: A fire deliberately set at the former Nyabinghi bar did $5,000 damage to the property, reports show. Utilities were off prior to the fire called in. Records show the building involved in a bank foreclosure and delinquent taxes of $2,898. Firefighters said footprints could be seen in the snow going to and from a side door. Files show the bar’s last night was New Year’s Eve. See Bar fire deliberately set, fire department says.

  • Cleveland Heights, Ohio: The foreclosure crisis is leaving thousands of abandoned and vacant homes in northeast Ohio neighborhoods, and if a fire breaks out in any of them, it can quickly turn into a death trap. Now the Cleveland Heights fire department has created a new policy concerning fires at vacant homes, and it is triggering a debate. Chief Kevin Mohr came up with a new procedure for fires at abandoned and vacant homes, which in some cases will stop fire crews from taking the offensive. See Vacant Home Fire Policy Raises Questions.

  • Fitchburg, Massachusetts: Fire investigators say a fire at a vacant apartment building was arson. Firefighters arrived to find the wooden building engulfed in flames, said Deputy Fire Chief James J. Belliveau. There were no injuries. “The heavy fire showing in the front of the building was threatening an exposed building on the left-hand side. Parts of that building were only several feet from the other building. The other building was brick,” he said. The partially occupied brick structure, an apartment building, had to be cleared during the fire. The residents, to keep warm, huddled in idling ambulances for several hours before it was safe for them to go back to bed, the deputy chief said. The building was sold to an Illinois bank for $143,792 in February 2008, likely because of a foreclosure, according to Fitchburg tax records. See Fire in empty building ruled arson.

  • Coram, New York: A small fire at a Long Island strip mall led to an explosive find: dozens of homemade bombs hidden throughout the building. Firefighters responded to the flames at the Coram strip mall Tuesday night as employees and residents still filled the area. Who would plant homemade bombs in a shopping center? Volunteer firefighters responding to a pizzeria blaze and discovered bottles of flammables in the kitchen and inside ceiling tiles and skylights. On the rooftop, vents had been pried open above each of the seven stores to find Molotov cocktails stuffed in. The devices had to be taken carefully apart. Matthew Bidwell, a former employee of the pizza place, blames it on the economy and wonders if the mall was in financial trouble. "The talk around was that they were going to put themselves into foreclosure," Bidwell said. See Mall Of Bombs: Molotovs Found In L.I. Buildings (Police, Firefighters Extinguish Potentially Catastrophic Situation In Coram; Some Sense Elaborate Inside Job).

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

More Stories On Tenants With Landlords Facing Foreclosure

The following is an assortment of stories on tenants and the problems arising when landlords find themselves financially overextended:
  • Sioux City, Iowa: Tenants of many apartments owned by KJM Properties and Meyer Company are getting the boot from their foreclosed buildings in the coming weeks, but in the meantime they're just doing what they can to stay warm. Boiler and maintenance issues are closing down the apartments at 1529 Grandview in Sioux City. Tenant Starla Thomas says her apartment's main radiator hasn't worked since she moved in. Thomas and other tenants were told by the property owners to use space heaters. See Foreclosed Buildings Offer No Heat For Some Tenants.

  • St. Petersburg, Florida: A 65-year-old Vietnam Vet who is paralyzed from the waist down and is current on his rent is served with a foreclosure notice and has recently had his water shutoff after the landlord reportedly failed to pay the bill. He said, "I've got to bathe at least twice a day. I'm on 28 medications three times a day and with the medications I've got to keep clean and without water, I'm stuck." See Frustrated renter deals with water shutoff and foreclosure.

  • Valdosta, Florida: Dwayne and Gail Floyd and Ella Lowe are among more than 20 apartment renters that are being forced to move because the bank foreclosed on their building. "We was paying our rent on time. We thought the landlady was doing what she was supposed to do but apparently she wasn't. One morning I heard a knock at the door, we opened the door, there was a guy there telling us we had to get out," said Lowe, 65, an evicted renter who [...] suffers from heart disease and takes insulin. See Tenants Evicted in Valdosta Foreclosure Crisis.

  • New Britain, Connecticut: Warren Hinze is a tenant operating a music store in the Raphael building, located just a block from City Hall. The landlord left the country without paying the mortgage and now that building is in foreclosure. Hinze and the other tenants figure the building might be worth something. But one tenant has already left. "They're moving out now," Hinze said. The tenants also have no heat. To tolerate the cold, Hinze put a space heater on the floor behind the counter and he wears a heavy jacket. Earlier in the winter, the tenants pooled money to buy oil for the furnace but it has not lasted. See Looking for a Landlord (A downtown New Britain building still has tenants, but no one to run the building).

  • Florida: Florida State Senator Mike Fasano recently authored Senate Bill 454, a proposed law to provide a penalty up to $10,000 for property owners who dupe tenants into leases without first disclosing that the home is in, or headed for, foreclosure. Victims could recoup "reasonable" attorney fees. In addition, the proposed law would require an extra form to be added to the rental agreement. The property owner would have to sign the sheet, either verifying the house is not involved in foreclosure or at least disclosing any legal proceedings to potential renters. The bill will go to Senate committees for consideration when the Legislature begins its 2009 regular session, March 3, 2009. See Legislation Targets Dirty Foreclosure Practices.

  • Arizona: State Senator Leah Landrum Taylor has filed a bill to mandate landlords facing foreclosure action to provide tenants with a written notice at least 30 days before the date of a foreclosure sale. Under S1108, a landowner who knowingly fails to provide a notice could be charged with a Class 1 misdemeanor. "I've had more than my share of constituent phone calls - of folks just beside themselves because they have only had five days to move out of a property that they had been paying rent on," Landrum Taylor said. "I could not hear about another family going through this." See Phoenix senator files bill to protect renters from foreclosure on landlords.

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

Saturday, January 17, 2009

Countrywide Forecloses On Bakersfield AIDS Group Home; Residents Face End Of Month Boot

The Bakersfield Californian reports:
  • Bakersfield AIDS Project faces a Jan. 30 deadline to vacate the east Bakersfield house it rents for use as a group home and community center. The non-profit social service organization was asked to leave at the end of the month after the trust that owned the 102-year-old house defaulted on its mortgage.(1)

***

  • Three men live in the house full-time, and dozens of others drop in regularly for social services and group meals. “It’s really a community here,” [director Audrey] Chavez said. “A lot of HIV-positive people don’t have the support of their families, so this is their surrogate family.”

For more, see Foreclosure crisis: AIDS Project up against deadline to leave house it rented.

(1) Reporedly, the bank, Calabasas-based Countrywide Financial Corp., said Friday it had “no idea” the house was a group home for AIDS patients. The company might have been willing to work with the organization if anyone had contacted Countrywide, but no one did, said spokeswoman Jumana Bauwens, according to the story.

Developer, Lender Pointing Fingers As Unsold 75% Of Condo Units In Upscale Tower Fall Into Foreclosure

In Cincinnati, Ohio, the Cincinnati Enquirer reports:
  • Foreclosures proceedings are under way for the high-end condominium development Overlook at Eden Park. But the development firm behind the multi-million dollar project, Covington-based Joshua One, argues that the lender is to blame for the financial unraveling of the project, according to court documents filed in Hamilton County Common Pleas Court. So far, six of the 24 condos have been sold. Prices range from $500,000 to $3 million.

  • In a motion filed Nov. 12, Bank of America claimed that Joshua One Development mismanaged its construction budget for the 13-story condo tower, which caused delays and led to unpaid bills for the project.

For more, see Condo high-rise in foreclosure.

Renting Unsold Units To Avoid Foreclosure A Possibility For Oakland Condo Developer In Default

In Oakland, California, the Alameda Times Star reports:
  • An upscale residential project that is one of the keys to the downtown's revival has lurched into a mortgage default and faces an uncertain future. The owner of the 901 Jefferson complex in downtown Oakland, consisting of 75 for-sale condominiums, has defaulted on a $26 million construction loan issued in 2006, Alameda County property records show.

***

  • "The downturn in the economy, plus the downturn in the condominium market, has made selling that property as condos not feasible," said Arthur Evans, president and chief executive of A.F. Evans. It's possible the lender, Keybank National Association, could attempt to seize the property through a foreclosure of the construction loan.

***

  • One backup plan would be to rent the units and sell them when the market bounces back. A.F. Evans is also attempting to find a buyer for the property, which is completed but remains vacant.

For more, see Upscale Oakland project in trouble.

Builder Tried Rent To Own, Now Goes With Auction To Unload Slow Moving Inventory

In Brookfield, Illinois, the Riverside/Brookfield Landmark reports:
  • [L]ast week, the "for sale" signs in front of the Courtyards of Brookfield at Shields and Eberly avenues came down in favor of two signs announcing the auction of 11 unoccupied units in the development. The project, which features 16 townhomes in four separate structures, broke ground in the spring of 2007 at a base listing price of $355,000 per unit.

  • The development has been completed, but only one unit has sold. Four others are occupied and have rent-to-own leases. The remaining 11 townhomes will be auctioned off on Sunday, March 1 [...] starting at a minimum bid of $189,000.

For more, see Economy puts squeeze on townhome projects (Brookfield units will be auctioned; Riverside site for sale, in foreclosure).

Lease-Option Tenants In New Townhouse Development Caught Between Conflicting Demands For Rent From Builder In Foreclosure & Stiffed Mortgage Lender

In Bakersfield, California, KBAK-TV Channel 29 reports:
  • Creekside Townhomes is a row of 32 units at 500 White Lane. Tenants can lease to own, but the project is facing financial troubles.

***

  • On Dec. 22, tenants' received a letter from a law firm representing First Regional Bank. The letter tells tenants' to make all future rent payments directly to First Regional Bank instead of to the landlord, Project Manager Robert Hernandez.

***

  • But four days after tenants' received the letter from the bank, Hernandez issued his own notice. In it, Hernandez writes that the bank acted "prematurely" in issuing the notice and says the bank letter is "not applicable". Hernandez tells tenants' to "please disregard this (the bank's) notice."

  • Tenants' are left wondering who, if anybody they should hand over their rent. If the property goes into foreclosure, some wonder if they'll lose their deposit or other lease payments.

For the story, see Foreclosure worries loom for Creekside Townhomes tenants.

Developer Disaster Leaves 10 Families Living In S. Florida Ghost Town; Letter Carriers Refuse To Deliver Mail; Cops Can't Find Complex On Their System

In Florida City, Florida, WFOR-TV Channel 4 reports:
  • Ten families bought a piece of the American dream, only to end up with a nightmare. A bank took over a South Florida development before it was complete. Now, the people who bought in are stuck living in a ghost town.

***

  • The community looks great from the outside. But on the inside, it's a pre-construction nightmare. The developer built very little outside of the nightmare these homeowners are stuck living in.

***

  • [The project] is a modern-day ghost town. Rows of empty townhouses sit on blocks of paved roads being devoured by weeds. [...] The developer is now long gone. Of the 614 promised units, only 70 were ever built. And only ten units were ever sold.

  • Those ten owners have a massive problem on their hands. Looking past the fact that nobody would buy or rent those homes, the fact of the matter is that to many, they don't exist at all. The U.S. Postal Service won't deliver mail that far. There are no street lights, and thieves have been ransacking houses for appliances. "We called the Florida City Police; they couldn't find us in the system," [said one homeowner].

For the story, see Developer's Disaster Causes Modern Ghost Town (Florida Keys Townhomes Only Has 10 Sold Homes).

For the WFOR-TV video, see The American Dream Bought By The Bank.

Condo Developers Stuck Holding Excess Inventory Turning To Renters For "Bailout"?

In Las Vegas, Nevada, KLAS-TV Channel 8 reports:
  • The condo craze exploded in the Las Vegas valley just a few years back, but now with the foreclosure crises, people aren't buying into condos when housing prices are so low. It leaves condos floundering with too much inventory.

  • When you look at big condo projects like Loft 5, it probably does not occur to you that there is any option other than to buy. But with the condo sales market at a standstill, some big developers are shifting strategy and going after renters.

***

  • "Developers have excess inventory, they need to do something with it, and how do they survive or what do they do between today and whenever things improve? And certainly one of the alternatives is to rent them out," said David Krantz with RMI Management. Krantz's company has been retained by the Loft 5 developer to lease about 200 units.

For more, see Condo Developers Turn to Renters for Relief.

Attorney On Trial For Forgery, Criminal Breach Of Trust For Allegedly Duping 85-Year Old Man Out Of $160K In Bogus Mortgage Investment Deal

In Barrie, Ontario, the Toronto Sun reports:
  • An 85-year-old investor stood up in the witness box yesterday and told the court that a lawyer is a "criminal" who duped him out of $160,000 in a fake mortgage scheme. "All that he told me was a bunch of lies," said Sam Klaiman, after a full day of questioning in the witness box.

  • On trial is Barrie-area lawyer Myles McLellan, 55, who is facing eight criminal charges including forgery and criminal breach of trust. Klaiman, a wealthy investor who started up his Toronto based business, Homark Real Estate Ltd., in 1936 at the age of 13, testified that he trusted McLellan because he is a lawyer. [...] The trial is expected to continue for two weeks.

For more, see 'Criminal' lawyer in dock on fraud charges.

For more, see Mistrial declared in fraud trial (Crown doesn't buy suspect's argument).

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

For those in Canada, if a Canadian attorney, in the course of representing you, screws you out of money or property through dishonest conduct, click on your province on the Canada Client Protection Funds Map to contact the appropriate Law Society Client Compensation Fund about filing a claim to seek some reimbursement for your losses.

For those in the United States, see:

Ohio Attorney Gets 4 Years For Lifting $624K+ From Escrow Account, Stiffing 23 Clients In The Process

In Toledo, Ohio, the Toledo Blade reports:
  • A former Toledo attorney who pleaded guilty to stealing hundreds of thousands of dollars from her clients was sentenced in Lucas County Common Pleas Court Thursday to 4 years in prison. Karyn McConnell Hancock, 38, was convicted of aggravated theft in November for stealing more than $624,000 from 23 clients over a period of nearly six years.(1)

***

  • Authorities said that McConnell Hancock would put money into an attorney escrow account for clients of personal injury cases, probate matters, and real estate issues, and would divert some of the funds for personal use.

***

  • Those clients who investigators have identified as victims of theft have been advised to file a claim with the Client Security Fund of the Supreme Court of Ohio. The fund is made up of money from registration fees paid by Ohio's attorneys and is used to reimburse those who are victims of attorney misconduct.

For more, see McConnell Hancock gets 4 years.

For those outside of Ohio who get screwed out of money or property by an attorney in the course of representing you, and seek some amount of reimbursement, see:

(1) Reportedly, because McConnell Hancock would ultimately pay back some of that money with other accounts, authorities believe the total stolen was about $389,000. EscrowRipOffAlpha

Friday, January 16, 2009

Cop In Foreclosure Now Faces Bank Robbery Charges

In Carbondale, Illinois, the Chicago Tribune reports:
  • A Carbondale police officer has been suspended without pay after prosecutors alleged he and his neighbor were the two men that robbed a bank at gunpoint while wearing motorcycle helmets. Jackson County prosecutors charged city patrolman James Gaddis, 26, and Anthony Fike, 35, both of Murphysboro, in the Oct. 9 holdup of the First Southern Bank in this southern Illinois city. Authorities would not discuss a possible motive in the holdup, though Jackson County Circuit Court files show that Flagstar Bank filed mortgage foreclosure proceedings against Gaddis in December.

For more, see Carbondale police officer accused of robbing bank.

JP Morgan To Modify Troubled Securitized Mortgage Loans; Doesn't Believe Actions Will Violate Investor Agreements

In New York City, Reuters reports:
  • JPMorgan Chase & Co., the second-largest U.S. bank by assets, on Friday said it will boost home foreclosure prevention efforts by modifying loans tied up in securitizations, in addition to the loans it owns.

***

  • "Chase believes it can legally modify the vast majority of its mortgages owned by investors consistent with the relevant investor agreements and the best interests of investors," the retail arm of JPMorgan said in a statement. It will seek approvals from a "small number" of situations where contracts may limit modifications, it added.

  • An investor group led by Greenwich Financial Services is suing to force Bank of America-owned Countrywide Financial to repurchase thousands of loans that the lender intends to modify under a predatory lending settlement. The lender would be liable to pay hundreds of trusts about $80 billion for loans it modifies, according to lawyers of the plaintiffs.

For more, see Chase to tackle modifying investor-owned mortgage.

For Greenwich lawsuit, see Greenwich Financial Services v. Countrywide Financial Corporation.

SW Florida Broker Guilty In Commercial Land Flipping Deal; Allegedly Clipped Investors For Almost $3M

In Fort Myers, Florida, WINK News reports:
  • Guilty as charged -- that's the verdict a federal jury handed down in the case of Samir Cabrera. Jurors agreed that the Lee County land developer cheated his investors out of nearly $3 Million. He'd hoped to be a well-respected land developer. Instead, Samir Cabrera's failed projects will land him in prison. On Tuesday, the once-undecided federal jury wrapped up the week-long trial with a unanimous guilty verdict on all 11 counts against Cabrera.

For the stories, see:

For the indictment, see U.S v. Cabrera.

Go here for earlier posts on this story.

Fannie, Freddie Accused Of Requiring Financially Strapped Homeowners To Waive Legal Rights As Condition To Getting Loan Modifications

The Washington Independent reports:
  • When the government announced in November that it would use mortgage giants Fannie Mae and Freddie Mac to streamline loan modifications for possibly hundreds of thousands of borrowers, officials billed the idea as a fast-track program to fight foreclosures. What no one mentioned is that homeowners would have to sign away their rights to sue, if they wanted to get those loans modified.(1)

***

  • [I]ncluded in the Fannie agreement is a provision stating that “borrower has no right of set off or counterclaim or any defense to the obligations of the Note or Security Instrument.”

  • The waiver is part of the borrower requirements that must be signed for the loan modification. Fannie Mae’s sample version is available on one of its websites; the Freddie Mac agreement, which has similar language, can be accessed only by servicers. The agreements were designed by Fannie and Freddie.

  • In plain English, the waivers mean a borrower can’t sue the lender who originated the mortgage if the loan modification goes bad, or for any other lending abuses concerning their loan, [senior policy counsel for the Center for Responsible Lending Julia] Gordon said.(2)

For more, see Freddie, Fannie Force Borrowers to Waive Legal Rights (Housing Advocates, Congressional Leaders Call Practice Abusive).

(1) Requiring borrowers to waive their legal rights in order to get loans modified has become an increasingly popular tactic as the housing crisis has worsened, said Ira Rheingold, executive director of the National Association of Consumer Advocates. He said consumer attorneys regularly advise clients not to sign modification agreements with waivers, or to cross out the waivers first. “It wasn’t invented by Fannie and Freddie,” Rheingold said. “I’m not surprised it’s in there, but I’m disappointed. It’s a real issue. The government shouldn’t be asking people to waive their rights to claims.”

(2) Gordon said that a House Financial Services Committee hearing in July featured a dramatic confrontation, in which Countrywide representatives denied requiring the waivers - until she produced a copy of one from her briefcase. The lenders said they would put the waivers under review. Committee Chairman Barney Frank told them to put the waivers “six feet under” review, and to end the practice.

Toxic Chinese Drywall Suspected Source Of Health Problems For C. Florida Homeowners, Pets; May Also Be Cause Of Home Equipment, Electronics Failures

In Manatee County, Florida, the Sarasota Herald Tribune reports:
  • As the investigation into toxic Chinese drywall continues, a single street in Manatee County appears to be ground zero for the largest cluster of problem homes. Within the Lighthouse Cove subdivision of Lennar's Heritage Harbour development, sits a quaint street of two-story homes called Montauk Point Crossing. Today, it is a virtual ghost town.

  • At least six families have already moved out of their homes, either at Lennar's expense or their own. At least two more are planning their exits as soon as possible. The residents, many with small children, are experiencing an outbreak of the same chronic symptoms -- respiratory problems, painful sore throats, headaches and nosebleeds -- which they attribute directly to the drywall chemicals filling their homes.

  • Residents of Montauk Point have seen their air-conditioners fail on a regular basis -- so often that the presence of a white HVAC repair truck became a running joke in the neighborhood. Metal within their homes corroded and turned black: piping, electrical wiring, even silver jewelry. Electronics also began to fail and short-circuit. Residents say they have gone through multiple televisions, computers and cable boxes. Light switches stopped working altogether, or only intermittently. "I'm on my third TV," said homeowner Dan Tibbetts. "Everything just dies."

Reportedly, one family had their two dogs euthanized after they began acting erratically; one became oddly aggressive and the other would not drink water.

For more, see Ground zero in drywall dispute.

HUD Launches Program In Six Cities To Help Homeowners Not Yet In Foreclosure

In Miami, Florida, The Miami Herald reports:
  • [A]nother effort to keep borrowers from losing their homes to foreclosure was launched Wednesday by the Department of Housing and Urban Development. Called ''Keep Your Home, Know Your Loan,'' the campaign includes public service announcements and print materials that will be distributed in six major metropolitan areas where home foreclosures rates are soaring, including Chicago, Los Angeles, Detroit, New York, Phoenix, and, naturally, Miami.(1)

  • ''This is an opportunity for us to reach out to people who may not be in foreclosure yet, but could be facing one this year, due to a rate change, the economic downturn, job loss or having their hours cut,'' said Armando Fana, director of HUD's field office in South Florida.

For more, see Miami homes get HUD lifeline (Federal housing officials chose Miami and five other cities to launch a foreclosure prevention campaign, complete with a hot line, and warned home owners to watch out for 'rescue' scams).

Go here for more information on the HUD program - Keep Your Home. Know your Loan.

(1) As part of its campaign, HUD has also launched a new hot line, 877-HUD-1515, where homeowners can get information about HUD-approved counseling agencies in their area.

Fraudulent Flipping Of One South Florida Home Lands Four In Federal Can

In Miami, Florida, the U.S. Attorney's Office announced that Yadira Garrido (51 months in prison, 3 years probation, & $5.3+ million in restitution), Jorge Cordero (10 months, 3 years probation, and $840,000+ in restitution), and Maritza Salan (60 days, 3 years probation, and $800,000+ in restitution) were sentenced last week for their roles in the fraudulent flipping of one residential property in Coral Gables.
  • According to the Indictment and statements made during the pleas, the defendants transferred the residential property three times within approximately one year, resulting in almost doubling the price of the property from $780,000 to $1,400,000.

The property ultimately went into foreclosure, resulting in the lender taking a hit. Another defendant, Ishmett Nazario, previously was sentenced to 41 months in prison, 3 years probation, and was ordered to pay over $1.4 million in restitution.

For the U. S Attorney press release, see Mortgage Fraud Defendants Sentenced To Prison.

Listing Agent Photos May Be Key In Prosecution Of Foreclosed Homeowner Accused Of Trashing Home Before Walking Away

In Oregon City, Oregon, KPTV Channel 12 reports:
  • Investigators said a Damascus couple whose house went into foreclosure trashed the place, stole every appliance and fixture inside and are now facing criminal charges. Grigoriy and Inna Bogoslavets have been indicted by a grand jury on charges of theft, trespassing and criminal mischief.

***

  • According to court documents, between August and November 2008, they stripped and damaged their old house, causing more than $50,000 in damages.

***

  • The previous owners, Grigoriy and Inna Bogoslavets denied any wrongdoing and claimed they'd been living like that for some time. But [real estate agent Carl] Iams said his firm posted pictures for their sales listing, with the house in excellent condition, right before the family moved out.

For more, see Couple Indicted After Foreclosed Home Stripped (Former Homeowners Took Everything, Investigators Say) (read story) (watch KPTV video report).

Go here for other posts on pre-foreclosure homeowner fixture stripping. foreclosure fixture stripping apple