More Mortgage Lending Insiders Blow The Whistle On Shady Subprime Loan Practices

Dateline NBC ran a story last night in which it:

• [G]ets to the bottom of how bad loans and greed wrecked the U.S. economy in this hour-long investigation. Hear from Countrywide insiders and whistleblowers who have never spoken publicly before.

For the story, see 'If you had a pulse, we give you a loan' (Inside the fiasco that led to the mortgage mess and Countrywide's collapse) (read story) (watch video).

Go here for Dateline NBC home page.

In a related story, see Forbes: Follow The Mortgage (How the American taxpayer and a swanky Manhattan hedge fund ended up with a Liberian immigrant's busted mortgage).

California AG Bags Two In Alleged Loan Mod Scam Involving 160+ Victims; Suspects Charged With Grand Theft, State Foreclosure Consultant Law Violations

From the Office of the California Attorney General:

• Attorney General Edmund G. Brown Jr. [Thursday] announced the arrest of two scam artists -- Mary Alice Yraceburu and Marianne Curtis -- who "coldly and heartlessly" conned over one hundred and sixty victims out of thousands of dollars for non-existent loan modification services.

***

• Yraceburu was arrested [Thursday] in Fresno County and Curtis was arrested [Thursday] in Orange County on the following charges: - 24-counts of grand theft; - 25-counts of violations of California's foreclosure consultant statutes; - One special allegation that the total value of theft was over $65,000; - One special allegation that the total value of theft was over $100,000; Both women are convicted felons who have served time in state and federal prisons.

• The two women operated a company called Foreclosure Freedom, which sent hundreds of fliers to Californians promising help in stopping the foreclosure of their homes. The fliers read: "FINAL NOTICE - Respond only to this notice immediately."

• This is similar to First Gov scam, which the Attorney General stopped late last year. When homeowners called the number on the flyer, they were told their mortgages could be renegotiated to a lower monthly payment. Victims, however, were required to pay thousands of dollars in up-front fees and were instructed not to contact their lenders. Victims were assured the company had "private lenders and specialists exclusive to their company who are very experienced in the options and methods used to renegotiate home loans," yet neither of the women who operated the company had real estate licenses, legal training, or any experience in the home mortgage market. Investigators found no evidence of any successful loan modifications and most of the victims were either forced into bankruptcy or lost their homes to foreclosure.

For the California AG press release, see Brown Announces Arrest of Two Scam Artists Who Committed Loan Modification Fraud.

For the California AG's charging documents, see:

• Felony Complaint - People v. Curtis & Yraceburu,
• Arrest Warrant Affidavits - People v. Curtis & Yraceburu (if link expires, try here).

NY Feds Indict Two In Equity Stripping, Straw Buyer Scam

In The Bronx, New York, the Daily News reports:

• A Bronx real estate broker who hosted a radio show on WBLS and WLIB inviting distressed homeowners to contact her for help was charged Thursday with ripping them off instead. Lavette Bills, head of MTC Real Estate, was charged along with Kirk Lacey, a Jamaican who lives in Florida, in a brazen $800,000 mortgage fraud scheme that allegedly preyed on people fearful of foreclosure.

• In one case, Bills, 36, persuaded a Bronx homeowner who had called the show for help to put Bills' name on the deed to her house on Tinton Ave. by promising to get the homeowner a loan to pay off the $38,000 mortgage. Bills sold the home to a straw buyer, according to the U.S. attorney's office and the FBI. Bills allegedly made $150,000 on the crooked deal, including taking a $50,000 broker's fee for the bogus sale.

• The homeowner, who just wanted to pay off the small mortgage, is now in foreclosure. Thanks to Bills, the new mortgage on the house totals $337,500, prosecutors said.

For the story, see Radio 'foreclosure specialist' Lavette Bills held in $800G mortgage con.

See also, The Journal News: Broker from Briarcliff faces charge.

• [T]he papers detail another transaction in which the pair allegedly used another straw buyer to get a $495,000 loan to buy a Bronx property. The defendants paid $300,000 for the property, the complaint says. The FBI interviewed the straw buyers involved in the transactions but the criminal complaint does not name them. The loan application contained a number of false statements, including misinformation about the straw buyer's job, income and residence, authorities said.

From the U.S Attorney's Office (Southern District, New York):

• Press Release - Two Real Estate Representatives Charged With Mortgage Fraud Targeting Distressed Homeowners On The Radio.

Investigative Report: Firm Uses Quit Claim Deed Home Transfers Into Trusts As Part Of Loan Modification Efforts

In San Diego, California, an investigative report by the San Diego Union Tribune attempts to shine light on one area loan modification firm:

• [E]dmundo Rubi now does business under the names Apocalypse Trust and Amerisian Trust. Since July, he and a pair of real estate brokers have persuaded more than a dozen desperate families in San Diego County to transfer ownership of their homes to the trusts as a way of saving them, a San Diego Union-Tribune investigation has found. So far, at least 23 individuals in California, Nevada and Arizona have signed over 35 properties, using a simple document called a quitclaim deed. No one contacted by the Union-Tribune has received a modified mortgage. Two have lost their homes to foreclosure.

***

• The operation has similarities with Rubi's past businesses in that all focused on Filipinos in National City and Chula Vista. Federal prosecutors characterized Rubi's previous activities as a Ponzi scheme. Investors were told his companies would purchase U.S. government obligations at a discount and investors would get 6 percent returns monthly.

• Rubi pleaded guilty in 2005 to money laundering and conspiracy to commit mail fraud after swindling $25 million from about 425 people. He was sentenced to five years and 10 months in prison, and three years' supervised release. Rubi was let out in July, which is when many of the San Diego quitclaims to Amerisian and Apocalypse were filed.

• Officials with the state attorney general and San Diego district attorney would not comment on Amerisian or Apocalypse trusts, nor whether they are investigating them.

For more, see Empty promises (To avoid foreclosure, families put home ownership in felon-run trusts; not one loan has been modified).

Illinois Attorney Disbarred For Actions In Alleged Equity Stripping Foreclosure Rescue Scam

In Aurora, Illinois, The Beacon News reports:

• [A]urora attorney Edward Varga was disbarred for neglecting 18 bankruptcy cases and failing to refund the clients' fees in those cases. He failed to appear for his disciplinary hearing, according to the Illinois Attorney Registration & Disciplinary Commission. According to IARDC documents, Varga took between $300 and $2,760 from several clients, then failed to return calls or make court appearances for them.

• In 2006, federal prosecutors charged Varga with defrauding clients, trustees and creditors of $500,000. According to the U.S. Department of Justice, Varga and a woman, under the guise of assisting individuals facing foreclosure, convinced these homeowners to sell their homes to "investors" while in bankruptcy or just before entering bankruptcy.

• Varga, through the use of false statements and documents, ensured that the closings took place, the Justice Department said. Then the sale proceeds were signed over to the woman and not the sellers, prosecutors said. The sale and existence of the proceeds were concealed from the Bankruptcy Court, the trustees and creditors, prosecutors said.

For the story, see Attorney is disbarred after cheating bankruptcy clients.

For earlier reports on the criminal indictment, see:

• Chicago lawyers charged in bankruptcy fraud probe, and
• U.S Attorney press release.

Lender Files Civil Lawsuit Against Players In Alleged South Florida Flipping Scam

In Broward County, Florida, the South Florida Sun Sentinel reports:

• In the two years Patrick R. Newman lived in South Florida, he bought and sold more than a dozen condos — flipping some several times within hours or days — in a mortgage fraud strategy that allegedly duped a bank into approving millions of dollars in questionable loans. Newman died in 2006, as FBI authorities were investigating his multimillion dollar condo-flipping operation. Now, National City Bank — the lending institution that approved more than $14 million in mortgage loans that ultimately were defaulted on — is suing several attorneys, appraisers and businesses who the bank contends assisted Newman.

***

• The Newman case spotlights a trend many legal experts predict will escalate in coming months. They expect a surge in litigation as more banks try to recover losses caused by what they contend was mortgage fraud. This is especially true in Florida, which ranked among the top three states in mortgage fraud the past three years.

For more, see Bank sues appraisers and attorneys, alleging fraud in flipping condos (Bank sues appraisers and attorneys, alleging they helped straw buyers and a flipping operation that cost it millions).

New Jesrey Man Cops Plea To Recruiting Straw Buyers In Mortgage Fraud Scam

In Newark, New Jersey, The Star Ledger reports:

• A truck driver from Paterson admitted in federal court to recruiting people who posed as home buyers for a mortgage-fraud scheme that led to a dozen guilty pleas. Appearing in U.S. District Court in Newark, Renford Davis, 47, said he worked with real estate agents, lawyers, loan officers and others to falsify mortgage applications as part of a scheme officials said netted up to $2.5 million.

• The plot hinged on buying dilapidated two- and three-family houses in Paterson and quickly reselling them at inflated prices to obtain higher mortgages from banks. The houses -- rented by tenants receiving federal Section 8 assistance -- were sold to buyers with no money down and often ended up in foreclosure. Davis said he recruited those buyers and helped them doctor their mortgage applications.

For more, see Paterson man pleads guilty in mortgage-fraud scheme.

Feds Charge Title Agent With $900K+ Heist From House Closings; Homeowners Left In Foreclosure; Underwriter Says Suspect Unauthorized To Issue Policies

In Louisville, Kentucky, The Courier Journal reports:

• [A] former lawyer, Wavy Curtis Shain, 26, was charged [last week] with carrying out various schemes to defraud banks and mortgage companies. He is accused of using businesses he owned and operated, Derby City Title and Capital Distribution LLC, to carry out the schemes.

• He also is charged with misappropriating substantial amounts of money received on behalf of borrowers using Derby City Title to obtain loans to purchase homes. In doing so, he allegedly failed to pay off existing loans and mortgage held by the sellers of those houses. Shain also is charged in the indictment with perpetrating a check-kiting scheme using business and personal accounts maintained with US Bank and BB&T bank.

For the story, see Suspended, former lawyers charged.

In a related story, WAVE-TV Channel 3 reports:

• Seven families could lose their homes any day now, even though they did nothing wrong. They made their house payments on time, but their homes are still going into foreclosure. They say it happened after a Louisville man scammed them out of almost a million dollars during a re-finance of their mortgage.

***

• Federal investigators believe [Wavy Curtis] Shain pocketed more than $900,000 from seven families. The FBI has charged him with theft.

According to the WAVE-TV Channel 3 story, Shain, through his company, Derby City Title, purportedly wrote insurance policies for underwriter Investors Title Insurance Company. Officials from Investors Title reportedly told Channel 3 that Derby City Title was never authorized to issue policies for them.

For more, see Title company's failure to make loan payments means families could lose homes.

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

Michigan Police Seek Scam Artist Using Extortion Threats To Squeeze Cash From Homeowners In Foreclosure

In Genesee County, Michigan, WJRT-TV Channel 12 reports:

• Genesee County Sheriff Bob Pickell is alerting homeowners about a suspicious man who's preying on foreclosure victims. An investigation is underway after a Genesee County woman complained that a man came to her door urging her to get out of her house or to give him money.

***

• Tina and Frank First say their home isn't in foreclosure, but there have been disagreements with their mortgage company that led to a threatened eviction. In the middle of all that, a man came to their door. "He says, 'Give me $2,000 to stay in the house,' or he'll pop the locks and he'd put on a lockbox and I'd have to leave," Tina First said.

***

• "You cannot extort people out of their house. He didn't know the bank, he didn't have the papers, he had no legal identification. He had nothing," Capt. Chris Swanson said. "He was playing on the fears of the homeowner, who did not expect someone to be there."

For more, see Authorities warn of foreclosure scheme.

Another Florida Court To Implement Mandatory Mediation In Home Foreclosure Actions

In Pensacola, Florida, the Pensacola News Journal reports:

• A judge's order signed [last] week could bring relief to local home owners and the local court system, both overwhelmed by mortgage foreclosures. [Florida's] First Judicial Circuit Chief Judge Kim Skievaski signed the order, effective April 1, that will send all new foreclosure lawsuits in Escambia, Santa Rosa, Okaloosa and Walton counties into mandatory mediation. Mediation can give homeowners a chance to renegotiate the terms of their mortgages, continue to make payments and stay in their homes.

***

• The order will affect mortgages of owner-occupied homes and those made through institutional, investment or commercial lenders. It does not extend to investment, vacation or commercial properties. [...] The financial institution that is suing the borrower must pay $750 for the cost of the mediation for each case.(1)

For more, see Judicial order diverts foreclosures (Judge detours local cases to mandatory mediation).

For the judge's order, see Administrative Order 2009-18: Case Management Order And Mandatory Referral Of Residential Mortgage Foreclosure Cases To Mediation.

(1) According to the story, mortgage lawsuits still will be filed with the Clerk of Court's office, but the new order requires the financial institution to file a mediation notice with the Collins Center for Public Policy, a nonprofit organization that will manage the program.

NJ Couple Duped Out Of $2,800 By Loan Modification Firm Promoting "HOPE" - Thought Company Was Associated With Gov't

In Ocean County, New Jersey, The Press of Atlantic City reports:

• [I]n a statement describing [loan modification firm] Hope Now's offenses, the [New Jersey Attorney General's] office mentioned a couple in Eagleswood Township, Ocean County, "who had more than $2,800 billed to their credit card by the defendants, received no loan-modification services and ultimately confronted foreclosure after they stopped paying their mortgage on the advice of a company representative."

• On Thursday evening, that couple, Jessie and Wayne Corliss, were still in their Forge Road home. They bought it for $159,000 about 10 years ago, and in three months, they might have to move again. The Corlisses first found Hope Now in November when they started looking for a way to decrease their monthly mortgage payments. Wayne Corliss searched the Web for "loan modification," and he said Hope Now Financial Services' Web site - www.hopenowmod.com - was the first to appear.

• "We saw something about it on TV," he said. "I just figured it was through the government." What the Corlisses were probably thinking of was Hope Now Alliance, a legitimate mortgage counseling and support nonprofit approved by the U.S. Department of Housing and Urban Development. Its Web site is www.hopenow.com.

• The Attorney General's Office said Hope Now Financial Services and other similarly named companies posed as Hope Now Alliance, violating the Consumer Fraud Act. The office has documentation of representatives telling consumers that it was in fact the only legitimate service, set up by the federal government, and that all other services were imposters.

For more, see Eagleswood Township couple named in suit against company.

For the NJ AG lawsuit, see Milgram v. Hope Now Financial Services.

Administration Launches New Website To Help Financially Strapped Homeowners

The Miami Herald reports:

• The Obama administration has launched a new website, makinghomeaffordable.gov, meant to help homeowners who need help with their mortgage getting a lender to modify their loan terms or refinance more easily. The website explains the administration's recently announced foreclosure prevention programs and helps homeowners determine which plan they might qualify for through questionnaires. Borrowers can find contact information for major loan servicing companies, housing counselors and Fannie Mae and Freddie Mac.

Source: White House launches website to help strapped homeowners.

Real Estate Agent Finds Two Starved Dogs In Foreclosed Marijuana Grow House

In Richmond, British Columbia, Richmond News reports:

• The SPCA is looking for the owner or owners of two German shepherds abandoned in a former marijuana grow operation, with the prospect of laying animal cruelty charges. A real estate agent found the dogs -- one dead, the other starving -- on Monday when she went to change the locks on a house that had been handed back to the bank in a foreclosure.

***

• The house had been the subject of a search in January by Richmond RCMP, who found a marijuana grow operation. Two males were arrested, but it appears no charges have yet been approved by the Crown. They therefore cannot be identified. The two men who were arrested in connection with the grow operation did not own the house, said Richmond RCMP Cpl. Jennifer Pound.

***

• Pound said police officers who conducted the search were aware that there were dogs in the house, but did not remove them from the house or follow up to make sure they were OK because the two men who were arrested were released. It appears the [...] house was simply abandoned, along with the dogs.

For more, see Two dogs left to starve in grow-op. pot grow ops beta

The Evictors: A Day In The Life

The following assorted links are to stories covering those tasked with the job of conducting evictions:

• Orlando, Florida: A day in the life...the ‘eviction lady’. Most residents of Orange County know Peggy Leonard as the “eviction lady.” She starts her days early, armed with dog biscuits for abandoned canines, hand sanitizer and flea spray for the grimy, foul-smelling homes she often encounters, and weapons including a gun and mace in case things get out of control. “It actually is a pretty dangerous job,” she said standing to the side of a door she is about to break into. “You never know if there is someone waiting on the other side with a gun.”

• Abingdon, Virginia: Evictors say economy making already-tough job even harder. It’s the hardest part of his job: Telling those who’ve fallen on hard times they’ve got 72 hours to get out of their house. Washington County Sheriff’s Lt. Mike Olinger does it 75 to 80 times a year, normally. But at the current pace, he said, that number will be higher this year.

• Las Vegas, Nevada: Henderson officer sees families grieve over evictions. In their Henderson office an hour before going out on the eviction, [Henderson County Constable Earl] Mitchell, [his deputy director Steve] Kilgore and Deputy Constable Dan McKeaney said they never know how people are going to react when faced with losing their home. "It can get highly emotional," Kilgore said. "I could see one of these situations blowing up and many people getting hurt."

• Chicago, Illinois: A Personal Look at Foreclosures, By the Sheriff Who Won’t Do Them. At Newsweek, Sheriff Thomas Dart of Cook County in Chicago offers an unusually personal look at the process of throwing someone out of their home in a foreclosure eviction, something he still often refuses to do. Dart stopped doing evictions after discovering too many instances of owners with no notification by the courts or renters with no idea an eviction was coming. That problem was supposed to be addressed by a ban on evicting renters, enacted by Fannie Mae and Freddie Mac in January. The problem, Dart says, is that the ban isn’t always followed as of yet. Also, not everyone has a Fannie or Freddie loan.

• Lucas County, Ohio: Lucas County Sheriff's Deputy sees human side of foreclosure evictions. A self-described optimist with a cheery smile and a voice that can border on perky, Deputy Sherry Stearns, 45, is the lone sheriff's deputy assigned to oversee foreclosure evictions. Deputy Stearns has encountered lots of eye-openers in the 10 months she's dislodged people from their homes. Among them: A suicidal homeowner; an elderly widow, unfamiliar with bill-paying, whose soldier son returned home from Iraq the day of her eviction; an older couple shocked to learn of a son's failed promise to make their mortgage payments, and far too many abandoned pets.

• Miwaukee, Wisconsin: Foreclosure Detectives Clear Out Local Homes (After Multiple Warnings, Detectives Come To Clean House). It happens every day in the Milwaukee area; homes are foreclosed and families have to move out and cannot come back.
  Foreclosed families eventually get a final warning from the bank, but they have to move, and by law, the sheriff moves in with legal muscle and a moving truck. It's a day detectives don't look forward to.

Go here and go here for other posts on the encounters of police and sheriff's deputies carrying out home evictions. DeputyEvictionTheta

Wyoming Man Who Threatened Federal Judge, IRS In Defense Of Home In Tax Lien Foreclosure Gets 27 Months

In Gillette, Wyoming, The Associated Press reports:

• A 60-year-old Gillette man has been sentenced to over two years in prison for threatening a federal judge and the Internal Revenue Service over the seizure of his home. Laurence E. Wolff was sentenced Friday by U.S. District Judge Alan B. Johnson, who ordered three years of supervised release after the 27-month prison term.

• Wolff was convicted in December 2008 of mailing threatening communications to numerous government employees, including IRS employees, which stated that he would defend his property. In the letters, he threatened to kill any person who attempted to enforce the foreclosure. Prosecutors say Wolff barricaded himself in his house on Aug. 18, 2008, refusing to leave his foreclosed property. He was arrested on Aug. 29, 2008.

Source: Gillette man sentenced for threatening letters. DeputyEvictionTheta

Foreclosure Rescue - Criminal Indictments

In an attempt at doing a little housekeeping, I have placed links to the following indictments involving alleged foreclosure rescue scams on this post. I need them all in one place for future reference, and as I find more, they will end up on this page.

For those of you working in prosecutors' offices and law enforcement, feel free to use these indictments as templates when making your own cases.

For those homeowners who feel like they have been screwed over in an equity stripping or loan modification foreclosure rescue deal, and are told by law enforcement that there's nothing they can do because the situation is a civil, and not criminal, case, feel free to give the prosecutor or law enforcement investigator these indictments and ask them to explain what the difference is between your case and the cases descibed in these indictments.

Equity stripping, sale leaseback foreclosure rescue Federal indictments:

• U.S. v. Connelly (Criminal Information; Virginia - Eastern District);
• U.S. v. Bills, et al. (New York - Southern District);
• U.S. v. JoyJackson, et al. (Maryland - "Metropolitan Money Store" case);
• U.S. v. Michael K. Lewis, et al. (Maryland);
• U.S. v. Thomas (Maryland);
• U.S. v. Brooke (Maryland);
• U.S. vs. McDowall, et al. (New York - Eastern District);
• U.S. v. Quiroz, Oliveri (Florida - Middle District);
• U.S. vs. Moumneh, et al. (Florida - Middle District);
• U.S. vs. Valenzuela - Plea Bargain Agreement; (California - Central District), Stipulated Statement of Facts, see pages 15 through 21;
• U.S. v. Kalani, et al. (Hawaii;)
• U.S. v. Mendoza, et. al. (Hawaii);
• U.S. v. Dimitrion (Hawaii);
• U.S. v. Krahnke, Striker (Minnesota);
• U.S. v. Beliveau, (Minnesota);
• U.S. vs. Fiorito & Jerde (Minnesota);
• U.S. v. Head, et al. #1 (California - Eastern District);
• U.S. v. Head, et al. #2 (California - Eastern District);
• U.S. vs. Craig, et al. (California - Eastern District);
• U.S. v. Mitchell (Ohio - Southern District).

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

Upfront fee loan modification foreclosure rescue Federal indictments:

• U.S. v. Warsing (Ohio - Northern District);
• U.S. v. Divins (Texas - Western District);
• U.S. v. Webb (Ohio - Southern District) - U.S. v. Webb media report;
• U.S. v. Yass (Kansas).

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

Equity stripping foreclosure rescue State felony complaints and indictments:

• State of Utah v. Cassity - AG's press release only.

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

Upfront fee loan modification foreclosure rescue State felony complaints and indictments:

• People v. Curtis & Yraceburu - California Attorney General Felony Complaint;
• People v. Curtis & Yraceburu - Arrest Warrant Affidavits (if link expires, try here);
• People v. Amador, et al. - California AG Felony Complaint;
• People v. Santos, et al., California AG Felony Complaint;
• People v. Santos, et al., Arrest Warrant Affidavit;
• State of Nevada v. Vargas - Media report only;
• State of Nevada v. Ferm - AG's press release only.

For other posts on criminal prosecutions of deed and mortgage scams generally, see:

• Foreclosure Rescue - Criminal Prosecutions I,
• Foreclosure Rescue - Criminal Prosecutions II.

Bride-To-Be's Wedding Plans, $6,700 Deposit Blown Out Of The Water By Reception Hall Facing Foreclosure

In Fall River, Massachusetts, WPRI-TV Channel 12 reports:

• Most women dream of the perfect wedding. But, for one Fairhaven woman, her nuptials turned into a nightmare after she learned her reception hall is in foreclosure. The Abbey Grill, located at 100 Rock Street in Fall River, is scheduled to be auctioned off March 26. That's three months to the day when Breanna Levesque's wedding was scheduled to take place at the venue.

• "This perfect dream wedding I worked on for 12 months to plan, I envisioned everything around, I bought my dress around this place, linens, everything," Levesque said.
  Levesque has already put down a $6,700 dollar deposit for the reception hall. Money she fears she will not get back. Employees said they were left high and dry as well.

For more, see Bride jilted by foreclosed venue (Reception hall closed just months before nuptials).

For the story of another couple left hanging with their wedding plans by the foreclosure of the Abbey Grill, and who face losing upward of $10,000 already paid, see Couple says Abbey left them stranded.

For a similar story in Oregon, see Gorge hotel's closure puts lovebirds, creditors in limbo.

New Hampshire Renter Scammed Out Of $1,000 By Phony Landlord

In Bow, New Hampshire, NewHampshire.com reports:

• According to local business owner Ted Severance, desperate times have led some to very desperate – and illegal – measures. Severance, owner of Coastal Forest Products lumber yards in Bow and Bedford, recently said that a scam artist successfully tricked an unsuspecting woman out of a $1,000 money order by pretending to rent her a property that Severance’s company owns. The house, located on Dunklee Road in Bow, is currently without a tenant and sits adjacent to the lumber yard on property that Severance owns.

For more, see Bow woman loses $1,000 to scam artist.

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

Ohio Renter Taken For $1,100 By Phony Landlord; Responded To Scam Ad Posted On Craigslist

In Columbus, Ohio, WBNS-TV Channel 10 reports:

• The foreclosure crisis is drumming up business for criminals looking to scam people out of money, and 10 Investigates has uncovered a new scam where thieves pose as landlords and rent property that does not belong to them. Tim Dodge and his family fell victim to the scheme.

• According to Dodge, the trouble started when he logged onto the Web site Craigslist to look for new home to rent. He browsed through listings and found a three-bedroom house in Grove City for $550 a month. "When I first pulled into the driveway, I looked around and said, 'It looks kind of cheap,'" Dodge said.

• A short time later he met with the woman who listed the property, signed a lease, and handed over cash to cover the rent, 10 Investigates' Paul Aker reported. "I paid her $1,100 up front for the first two months rent," Dodge said. Then, on the same day that Dodge and his family were moving into the home, he learned that he had been duped. That's when the home's owner [...] showed up.

For more, see Scammers Evolve, Use Craigslist To Pose As Landlords.

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

Loan Modification Firms Masquerading As Non-Profits?

In a story on loan modification scams, Minnesota Public Radio describes one way that some firms are using to circumvent state law prohibitions on collecting upfront fees:

• [I]n Minnesota, it's illegal for so-called foreclosure consultants to demand money in advance for a loan modification. But a loophole allows nonprofits to charge fees upfront. Officials say that loophole has allowed scammers to masquerade as nonprofits, and take money from unsuspecting homeowners.

For the story, see New scam threatens struggling homeowners.

California Feds, State Law Enforcement Agencies Form Task Force Targeting Foreclosure Scams

Buried in a recent story by KFSN-TV Channel 30 in Fresno, California is this excerpt on the initiative led by the Feds in central California to combat foreclosure rescue scams:

• [U.S. Attorney's office representative Kirk] Sheriff believes it's impossible to know how many homeowners have fallen victim to foreclosure rescue offers because some are too ashamed to report it. But people who do come forward with foreclosure rescue problems have a powerful new task force going after the scam artists.

• FBI Special Agent in Charge Harriet Dugal said, "It's outrageous that things like that happen to others, it's extremely sad that's why we decided to join forces." The FBI and the US Attorney's office are working with local, state and other federal agencies from Stockton to Bakersfield specifically going after foreclosure con artists.

For the story, see Foreclosure Victims Fight Back.

Daughter Steals Deed To Dead Mom's Home, Then Attempts To Evict Siblings, Say Cops

In Livermore, California, the Contra Costa Times reports:

• A woman who investigators say fraudulently changed the deed to her dead mother's house was arrested after she tried to evict several other family members who lived there, police said [last week]. Donna May Dennis, 47, of Livermore, and 56-year-old Mariefe San Juan Bago, of Fresno, have been in custody at Santa Rita Jail in Dublin since their arrests Feb. 27, Livermore police Lt. Matthew Sarsfield said. "They both conspired to commit these crimes," he said.

***

• Dennis forged her mother's signature on the "quit claim" deed and Bago notarized it, authorities have said. After she became the owner of the home, she tried to evict several siblings, who immediately suspected her of forging the documents, police said.

For more, see Altered deed leads to 2 arrests, police say.

Go here, Go here, Go here, Go here, Go here, and Go here for other posts related to deed or refinancing scams by forgery, swindle, power of attorney abuse, etc. DeedGammaTheft

Fighting Foreclosure & Winning In Miami

The Today Show on NBC ran a story Thursday on homeowners in foreclosure in Miami, Florida who are fighting back against their mortgage lenders. Among the highlights of the story was coverage of a recent seminar conducted in Miami in which 50 local attorneys volunteered their advice to some 300 homeowners who showed up for the gathering. Also, one homeowner who was interviewed reportedly not only fought back and beat the bank, but she got back her home free of the mortgage loan.

For more (video only, approx 3 minutes), see Fighting Foreclosure.

State AGs Opting For Civil Lawsuits In Lieu Of Criminal Prosecutions In Combatting Foreclosure Scams

A recent Associated Press story reports on how some state attorneys general are pursuing loan modification scams:

• [W]hile some states have recently toughened penalties for perpetrating the booming business of foreclosure scams, and some prosecutors have used existing fraud statutes to bring criminal charges, the reaction of many state prosecutors are civil actions designed to recover a victim's money.

***

• Florida Attorney General Bill McCollum has filed several civil lawsuits, including one against a company with an estimated 600 clients. So have attorneys general in at least a dozen states.

• In Maryland, state criminal prosecutors have filed no charges under that state's new foreclosure-rescue statute. Ditto in Massachusetts, which recently barred for-profit mortgage-foreclosure rescues entirely. "We found these cases are more appropriately brought in civil court, where we can get better remedies for the victims,"' said Amie Breton, a spokeswoman for Massachusetts Attorney General Martha Coakley.

• In Alabama, the attorney general's office usually reaches out to the foreclosure-relief firms first to find out if there is any money to recover before seeking criminal charges, said Rushing Payne, chief of the office's Consumer Protection Division. "It depends on the nature (of the allegations) and what we're able to prove," Payne said, adding there had been no convictions for foreclosure rescue scams in the past year.

• In several states, attorneys general can only bring a criminal case when asked by a local district attorney. In others, they lack the jurisdiction entirely. There are some attorneys general making criminal cases.

• In Arizona, Attorney General Terry Goddard has brought three cases this year on felony theft, fraud or money-laundering charges. Two defendants pleaded guilty, and the third case is pending. In California, the attorney general's office busted a fraud ring last November that had collected upfront fees ranging from $1,500 to $5,000, stealing more than $700,000 from homeowners in all. Three people have pleaded guilty to grand theft charges and received sentences ranging from probation to 6 years in prison.

• Lawmakers in Nevada, which has one of the highest rates of foreclosure rates in the country, took steps last fall to make foreclosure fraud a criminal offense. So far, five people have been charged under the new statute, none have yet gone to trial. The new law there makes defrauding a homeowner in foreclosure a felony punishable by up to 20 years in prison and a $50,000 fine.

For the story, see It's boom time for foreclosure scam artists (Only in a few states are attorneys general offices willing and able to seek criminal charges and jail time against foreclosure con artists) (if link expires, try here).

As Builders Of Partially Built Projects Take A Hike, Some Lenders Find Themselves Reluctantly Becoming Real Estate Developers

In South Florida, the Daily Business Review reports:

• When lenders threw millions of dollars at residential projects throughout South Florida, they probably didn’t expect that one day they’d take on the role of developers and begin running projects themselves. To their dismay, that day has come. From finishing construction of incomplete projects to forming real estate units to manage foreclosed properties, lenders have become deeply involved in the development process.

For more, see Condo Meltdown: Some lenders forced to take role of developers.

Another Homeowner Curent On His Mortgage Payments Gets Hit With Foreclosure Notice

In Woodland, Washington, KPTV Channel 12 reports:

• An unwarranted foreclosure notice gave a southwest Washington man a big scare [recently]. Kraig Neet said he was baffled when he returned to his Woodland, Wash., home on [...] and found a notice of default posted on his house. The notice said he had to come up with $290,000 to stop the foreclosure and reinstate his mortgage.

***

• Over the next three days, Neet tried to find out why he was served with the foreclosure notice. On Monday afternoon, he finally received an answer -- an attorney had simply made a mistake.

For more, see Foreclosure Notice Wrongly Posted On Home ('How In The World Can This Happen To Us?' Woodland Man Says).

Go here and go here for other posts on foreclosure screw ups involving improperly changed locks, removal of belongings, etc. ScrewUpsLockOutsInForeclosure

Mistake By Auction Firm In Identifying Foreclosed Home Results In Break-In; Authorities Refuse To Prosecute

In Mansfield, Ohio, the Mansfield News Journal reports:

• Carolyn Holland is not behind on her mortgage payments, nor is she facing foreclosure. But last September, her Lucas property was listed, with accompanying photos, on an auction Web site as a foreclosed home. In a case of mistaken identity, Holland's pottery shop at 24 N. Union St. was taken for the property actually in foreclosure, at 24 S. Union St. She said the mistake was avoidable and could have put someone's life in jeopardy.

***

• One day an interested buyer told her husband, Larry, the property had been foreclosed on, which surprised Carolyn. Days later, Holland went to her business and noticed the back door had been forced open. A new door knob and lock box had been attached to the door. She could tell the property had been altered because all the cabinets, doors and closets were open.

***

• Holland called the sheriff's department and filed a criminal complaint for breaking and entering and informed them of the foreclosure. [...] She was told by the Richland County prosecutor's office the matter is civil, not criminal so pressing charges is out of the question.

For more, see Foreclosure: Auction company mistake causing homeowner woes.

Go here and go here for other posts on foreclosure screw ups involving improperly changed locks, removal of belongings, etc. ScrewUpsLockOutsInForeclosure

Utah Feds Bust 3 In Alleged Straw Buyer Mortgage Scam Leading To Slew Of Foreclosures; Case Is "Tip Of The Iceberg" Say Prosecutors

In Salt Lake County, Utah, KSL-TV Channel 5 reports:

• Three Utah men have been indicted in a mortgage fraud scam that netted millions of dollars and left a trail of foreclosures and falling home values in its wake. The scam allegedly involved a dozen homes in Utah, Davis and Salt Lake counties. According to the U.S. Attorney for Utah, the plan was to buy houses in distress, inflate the appraisals and sell them fast, but the economy took a downturn.

***

• A grand jury indictment handed down [Wednesday] alleges Ronald Haycock Sr., Lyle Smith and Jamis Johnson were in on a scam that recruited "straw buyers," or people with good credit willing to take out loans for homes they normally couldn't afford. "The defendants then would do one or all of the following: Falsify loan application information, inflate appraisals, [or] inflate straw buyers' income -- sometimes as much as 400 to 500 percent inflation," said U.S. Attorney Brett Tolman. The scammers would then siphon excess proceeds from the loans -- an amount investigators believe today totals $2.8 million. The U.S. Attorney's office says this is just the tip of the iceberg in a number or mortgage fraud cases in the state right now.(1)

For the story, see Grand jury indicts 3 Utahns in mortgage scam.

(1) According to the story, several lenders are listed as victims in the scheme, as are the straw buyers who were paid between $7,000 and $20,000 for their participation. However, Tolman doesn't believe they all fall into that category. "We have seen sophisticated straw buyers very aware of what they were doing," he said.

Florida AG Files Civil Charges Against Orlando-Area Loan Modification Firm; Accused Of Taking Upront Fees, Deceptive & Unfair Advertising Practices

From the Office of the Florida Attorney General:

• Attorney General Bill McCollum [Tuesday] announced that his office has filed a lawsuit against a Central Florida company for allegedly charging up-front fees for loan modification services to homeowners facing foreclosure. According to the lawsuit, Winberg, Lopez, & Rodriguez Company, also known as Wineberg, Lopez & Rodriguez, P.A., and its owners are in violation of Florida’s new Foreclosure Rescue Fraud Prevention law.(1) The company has offices in Orlando, Winter Garden and St Petersburg and advertises using numerous websites.

• An investigation conducted by the Attorney General’s Economic Crimes Division revealed that Winberg, Lopez, & Rodriguez allegedly charged as much as $1,995 up-front to homeowners seeking loan modification services related to foreclosures. The lawsuit also alleges other deceptive and unfair trade practices including issues relating to the company’s advertising practices.

For the Florida AG's press release, see Orlando Company Sued for Violations of Foreclosure Rescue Fraud Prevention Law.

For the Florida AG's lawsuit, see State of Florida v. Winberg, Lopez, & Rodriguez Company, et al.

(1) Other defendants named are Freddy W. Lopez, Sr., and William R. Rodriguez, Jr. They face civil charges of violating:

• Chapter 501, Part II, Florida Deceptive and Unfair Trade Practices Act, Fla. Statutes (2008),
• §501.1377(3)(b), Florida Statutes, (2008), Violations Involving Homeowners during the Course of Residential Foreclosure Proceedings; and
• §865.09(3), Florida Statutes (2008), Fictitious Name Act.

Scores Of Consumer Lawsuits Flowing Thru Court Systems Throughout Country

Inter Press Service reports:

• Many of the biggest mortgage lenders in the U.S. have engaged in widespread, systematic schemes that ripped off hundreds of thousands of families seeking to buy a home, refinance or foreclose, according to lawsuits filed on behalf of consumers. Scores of class-action lawsuits, from the 1990s and up to today, detail the illegal and questionable practices used by mortgage-lending companies that pushed millions into bad mortgages, then into bad refinancing loans and then into foreclosures with unfair fees. The lawsuits have been filed by private attorneys and state attorneys general, and on behalf of NGOs.

For more, see Homeowner Rip-Offs Spark Scores of Lawsuits.

Feds Caution Against "Fake" HUD Website

The Buffalo News reports:

• An Internet Web site that looks like a federal Housing and Urban Development operation providing financial help for homeowners facing foreclosure actually is a “phishing scam” seeking personal information, HUD officials said Friday. Stephen T. Banko III, HUD’s Buffalo field office director, said the site, http://bailout.hudgov.us, has no legitimate connection with HUD or a federal program known as “Home Affordable Modification Program.”

• “The scent of stimulus money is in the air, and the devious are circling like vultures,” Banko said. “People are going to have to be more vigilant than ever in separating the legitimate companies from the fly-by-nights.”

• Banko said the official looking site — which features a look-alike federal emblem and the American flag with a tiny word stating “advertisement” — illustrates the extraordinary measures scammers are willing to take to confuse the public.

For more, see Property owners warned about fake bailout.hud.gov Web site (if link expires, try here).

Unable To Sell, Some Condo Owners May Be Squeezed Into Foreclosure By Rental Restrictions In Association Rules

In Atlanta, Georgia, the Atlanta Journal Constitution reports on the story of a local resident who owns a condo apartment that she can't unloaded, and who is hamstrung in her attempts to rent out the place because of rent restrictions contained in the condo association's rules:

• [A]tlanta has a glut of condos and few are selling, so owners want to rent them but cannot because of limits designed to protect condo values. “A lot of these buildings have three- to four-year waiting lists” of prospective landlords, said Steve Cooper, a Midtown condo resident and co-founder of Cooper Brown Real Estate, which manages residential property.

• After trying to sell her condo, [Shawni] Mozaffari leased it and was fined $25 a day by the condo association for exceeding the 25 percent rental cap. Then the tenant left after the building’s staff prevented his business associates from entering the unit. Without a renter, Mozaffari said, she might lose the condo to foreclosure. She already has lost a lake home to foreclosure.

***

• Mozaffari sought an exemption to the limit but was not approved. Such requests pose a dilemma for condo associations. Allowing waivers will help homeowners weather the recession and might curb foreclosures. But lenders and mortgage buyers, such as Fannie Mae and Freddie Mac, worry too many rentals will hurt a community’s stability.

For more, see Would-be condo renters feel boxed in (Rules to limit tenants push some owners closer to foreclosure).

Squeezed Homeowners In South Florida "Country Club" Communities Fight Back

In Boca Raton, Florida, the South Florida Daily Business Review reports:

• Almost a decade after Howard Cohan moved into Devon Place, a neighborhood within Boca’s Woodfield Country Club, he was told he would be required to establish a social membership in the golf and tennis club and pay annual dues of more than $10,000 to continue living in the community.

• He also was told he would be required to spend a minimum of $2,500 per year in food and beverages at the club. That was in 2003, and despite his displeasure with the homeowners association, Cohan paid his dues each year.

• Finally, Cohan had enough and recently filed a lawsuit challenging the club’s mandatory membership. Cohan’s attorney, Andrew Bray, is seeking class action status for the suit against the Woodfield Country Club Homeowners’ Association.

• And Cohan isn’t the only homeowner fighting mandatory fees.(1)

For more, see Country club living putting squeeze on some homeowners.

For Mr. Cohan's lawsuit, see Cohan v. Woodfield Country Club Homeowners Association Inc.

For another similar lawsuit by a homeowner against a homeowner association offering "country club living," see:

• Nichols v. The Hamlet Residents Association, Inc.

(1) In another similar lawsuit, Palm Beach Circuit Judge David French late last year ruled the membership fee requirement was “unreasonable” and “unenforceable” for new buyers. The suit is before the 4th District Court of Appeal. The appeal claims French should not have ruled in the case because he lives in a country club community. Go here for Judge French's ruling.

State Officials Yank Tax Benefit Derived From Bogus Homestead Claim By Bronx Congressman On Maryland House

The New York Post reports:

• Maryland officials have yanked a tax credit from Bronx Rep. Eliot Engel, who has avoided thousands in taxes on his nearly $1 million home there by improperly claiming it as his primary residence. The officials told Engel he doesn't qualify for the homestead exemption, a tax credit only state residents can apply for, because he and his wife Patricia's primary residence is in The Bronx.

***

• State officials say Engel won't be required to pay back any savings accumulated over past years because the family's homestead exemption was approved - even if erroneously.

For more, see BX. POL GOT A SLICK 'RANGEL' TAX BREAK.

Maine Chief Justice: Task Force To Develop Foreclosure Diversion Program

The Maine Public Broadcasting Network reports:

• [C]hief Justice [Leigh] Saufley told a joint session of the House and Senate that that the court system will create a task force to develop what she calls a foreclosure diversion program "aimed at helping Maine people who are facing the loss of their homes. I'm pleased to report that the Justice Action Group and Maine banks and credit unions are working with us in this effort, giving us reason to hope for real effective solutions." The project will be led by Supreme Court Justice John Levy. Levy chairs the Justice Action Group, a coalition that includes the judicial branch, the bar association, the University of Maine Law School, and legal aid providers, including Pine Tree Legal Assistance.

For more, see State Supreme Court Backs Program to Reduce Foreclosures.

More On Forensic Loan Audits In Connection With Loan Modifications

A recent story in the San Francisco Chronicle contained the following excerpt describing how one company involved in the loan modification process operates:

• Nasim Pakmanesh, production manager at Help-U-Mod in Walnut Creek, said his company's business model is to provide "forensic loan audits" for $1,500, then to refer clients to affiliated attorneys who charge about $1,000 to pursue a loan modification. He said the audit looks through the original loan documents to discover errors made when the loan was originated.

• With the audit, "the attorney has more ammo to work with to negotiate for their clients," he said. "Instead of going in and saying, 'My clients can't afford the home and have a hardship,' they're saying, 'You guys approved a loan you shouldn't have - so what can you do for my clients?' Our audit will definitely increase the chances" of getting a loan modification.

For the story, see Desperate homeowners easy prey for scammers.

Postscript:

It may be a good idea for The State Bar of California (as well as state bar associations in other states) to issue an advisory that specifically addresses whether the marketing and performing of a forensic loan audit by a non-attorney directly to and for a consumer-homeowner constitutes the unauthorized practice of law.(1)

Currently, the Florida Attorney General has a civil lawsuit pending against a loan modification firm alleging, among other things, that this precise conduct constitutes the unauthorized practice of law under Florida law. See Florida AG lawsuit (paragraphs 27-28).

Likewise, the Tennessee Attorney General filed a civil suit in November against a loan modification firm in which he alleges, among other things, that the firm engaged in the unauthorized practice of law. See Tennessee AG lawsuit (paragraphs 78-81).(2)

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

(1) However, The State Bar's professional responsibility committee has recently issued an alert offering guidance to California lawyers thinking about signing up and working with loan modification firms.

(2) Last week, a Nevada couple filed a class action lawsuit against a loan modification firm in which they assert that the firm engaged in the unauthorized practice of law in violation of Section 7.285, Nevada Revised Statutes. See class action lawsuit (paragraph 23).

Chico Homeowner's Foreclosure Eviction Stopped; Files Suit Requesting Cancellation Of Alleged Predatory Loan

In Chico, California, the Chico Enterprise Record reports:

• To prevent a Chico woman from losing her home, several lawyers filed suit against three firms they accused of engaging in a "predatory lending scheme." "We're hoping this is going to help this woman out. She certainly deserves it after what she's been through," said Evanne O'Donnell, managing attorney of Legal Services of Northern California.

• Jan Poythress, 53, was within days of being evicted from her northeast Chico home last month when the attorneys intervened. The eviction was put on hold, and Poythress remains in the house while a new trial is scheduled to decide the legality of requiring her to move.

• In a separate case, the lawyers, on March 5, sued Instant Mortgage Lending Corp. of San Diego, ForeclosureLink of Fair Oaks and Expedia Home Loan of San Diego, demanding, among other things, that Poythress' loan and the foreclosure on her home be canceled. "When you read this complaint, you see how sinister this is," O'Donnell said in a phone interview.

***

• O'Donnell said she was grateful for the help of several attorneys — experts on foreclosures and evictions — who donated their time free of charge. They include Doug Jacobs of Chico, Wayne Silver of Sunnyvale and Maeve Elise Brown of Oakland.

For more, see Lawsuit filed to save disabled Chicoan's home.

For earlier Chico Enterprise Record articles on this story, see:

• Lawyers hope to halt woman's eviction.

For other posts on homeowners using state & federal law to try and undo bad mortgage loans, Go Here, Go Here, and Go Here. UndoMortgageLoans TILAdelta

Scammer Convicted Of Elder Expoitation Now Accused Of Swiping Mom's Home Equity, Resulting In Foreclosure; Other Victims Come Forward

In Great Falls, Montana, the Great Falls Tribune reports:

• When Tina Palagi was sentenced in court on charges of elder exploitation in December, she got a suspended sentence and a strong warning to stay out of trouble.(1) Now the Great Falls woman is accused of stealing from her own mother while her mother was ill, causing the elderly woman to lose her home to foreclosure just months before it should have been paid off.(2)

***

• According to charging documents, [a Great Falls Police] detective learned Palagi had been trusted to manage her mother's finances while her mother was seriously ill. The older woman bought her house in 1973 and should have made the last payment in 2003. Instead, she learned her home was in foreclosure when sheriff's deputies told her she was being evicted and had 30 minutes to vacate the house, according to court documents.

• The charges say Palagi took out a loan against the house in 2000 and failed to pay back the loan, causing the house to go into foreclosure. Palagi had been authorized to govern her mother's affairs, but her mother did not know about the loan, according to the charges. Palagi also is accused of stealing her mother's retirement benefits while her mother was sick.

For more, see Woman convicted of elder exploitation now charged with bilking mom.

For story update (April 3, 2009), see Parole violations land woman in state prison:

• A woman convicted of at least two financial scams and accused of many more will spend at least 10 years in Montana Women's Prison. [...] Judge Dirk Sandefur handed down the prison sentence Thursday after determining Palagi had violated the conditions of two previous suspended sentences.

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

(1) According to the story, Palagi was given an eight-year suspended sentence in December for borrowing $54,000 from a 78-year-old family friend and failing to repay the money. District Judge Dirk Sandefur said he only let Palagi stay out of prison so she could pay the woman back. "I want you to understand very, very clearly that this is the end of the line for you," Sandefur said at the time. Palagi also reportedly has a previous conviction for a scam involving phony money orders.

(2) Palagi, 42, made her initial appearance Monday in Cascade County District Court on the newest charge of elder exploitation. That charge comes on the heels of a host of other new charges filed last week, accusing Palagi of other counts of elder exploitation and felony theft, according to the story. DeedGammaTheft FinancialAbuseOfElderlyAlpha

Dozens Of Tennessee Mobile Home Owners Face The Boot As Landowner Faces Foreclosure

In Catoosa County, Tennessee, WTVC-TV Channel 9 reports:

• Dozens of people in Catoosa County are wondering if they will lose their homes after seeing a foreclosure notice this week. They live in the Pine Forest Mobile Home Park who's owners, David and Sandra Ott of California, are facing foreclosure. Right now it's a waiting game because on one hand the property is scheduled to be auctioned in less than a month from now.

***

• It's home to dozens of families, retirees and people with disabilities. Wednesday [resident Anthony] Lance saw in the Catoosa County local paper's foreclosure section a notice that the nearly 40.85-acre property is about to be foreclosed with a public auction scheduled for April 7 at the Catoosa County Courthouse.

***

• Many residents own their mobile home but pay $170 a month to rent property with water and trash services. Residents say it costs $2,500 to $4,000 to move their home to another park plus they have to get a $500 permit. "I'm retired and it would be impossible for me to move my trailer, I'd have to lose it and it's paid for," Jerry Doss said.

For more, see Dozens Unsure If They'll Keep Homes.

Massachusetts Loan Modification Firm Accused Of Scamming Homeowner Out Of $995

In Boston, Massachusetts, WCVB-TV Channel 5 reports:

• As the foreclosure crisis grows so does a cottage industry of loan modification companies that promise to work with lenders and lower monthly mortgage rates. But Team 5 Investigates found the practices of many of these companies are not only unethical, they are illegal.

• Donna Warren's back injury forced her to stop working. Before too long, she fell behind on her mortgage payments. She went online and found Oceanview Investments. "Oceanview did nothing. They took my money and did nothing," said Warren. Donna paid Oceanview $995 to work with her lender on her behalf. "They promised that I wouldn't have to deal with my mortgage company at all, and to ignore any calls I got from them," said Warren.

***

• The company's Web site says they are no longer accepting clients. Florida's attorney general has launched an investigation after getting 40 complaints in less than a year. [...] Glenn Russell is a mortgage attorney who has seen loan modification companies popping up more frequently. "They promise we'll cut your mortgage in half, or we'll knock that interest rate down," said Russell. "They are targeting people that are the most vulnerable."

For more, see Mortgage Predators Take Money and Run (Many Companies Charge Up-Front Fees Illegally).

In a related story, see The Associated Press: It's boom time for foreclosure scam artists (Only in a few states are attorneys general offices willing and able to seek criminal charges and jail time against foreclosure con artists) (If link expires, try here).

Florida Attorney General vs. Outreach Housing - A Different View

Regarding the pending lawsuit by the Florida Attorney General's Office against loan modification firm Outreach Housing, the company has one or more supporters who have started blogs in which they paint a picture that is much different than the one described in the AG's lawsuit.

For those blogs, go here and go here.

Locksmith Takes A Bullet From Renter While Changing Locks At A Foreclosed Home

In Phoenix, Arizona, KTVK-TV Channel 3 reports:

• The Valley foreclosure problem turns violent when police say a man shot a person who was sent by the bank to change the locks. The man living in the home was renting and authorities say the owner did not tell him the home was under foreclosure. Jeffrey Harrison, 40, was arrested on charges of aggravated assault.

For more, see Renter shoots locksmith changing locks on foreclosed home. DeputyEvictionTheta

Queens Widow Fights Off Lender's Attempt To Foreclose Predatory Loan With Help From ACORN "Home Defender" Campaign

Writer and producer Joseph Huff-Hannon reports:

• The community organization ACORN launched its nation-wide "Home Defender" Campaign on February 19 with a series of actions across the country. In New York the campaign was kicked-off with a rally at the house of Myrna Millington of Laurelton, Queens. Millington, a 74-year-old retiree and widow, currently faces eviction from her home of 38 years after falling victim to predatory lending. The property went into foreclosure in September 2008, but ACORN has thus far been able to stay the auction.

For more, including a video of the rally at Ms. Millington's home, see Home Defense 101: Home defenders save homes from foreclosure.

Loan Officer Wins Race To Prosecutor's Office In Equity Stripping Foreclosure Rescue Case; Cuts Deal w/ Feds, Will Sing Against Now-Former Associates

In Honolulu, Hawaii, the Honolulu Star Bulletin reports:

• A former loan officer with a local mortgage brokerage company is cooperating with the government in its prosecution of his former boss. Vance Yukio Inouye, 31, pleaded guilty yesterday in federal court to one count each of wire fraud and conspiring to make false statements on loan applications and commit wire and mail fraud.

***

• Inouye pleaded guilty as part of a plea deal with the government. The agreement requires him to pay restitution and testify for the prosecution against other defendants. In exchange, the government promises not to prosecute him for various other crimes and to recommend a sentence lighter than what he would qualify for. In U.S. District Court, in front of U.S. Magistrate Judge Barry Kurren, Inouye said, "John Dimitrion approached me with a foreclosure bailout deal I thought was legitimate."

• Dimitrion is the owner and principal broker of Mortgage Alliance. A federal grand jury returned an indictment last month charging him, his wife, Julie Ann Baldueza Dimitrion, and employees Rick Kealoha Pa Jr. and Benjamin Yoshito Thompson with mortgage fraud crimes involving three homes. Their trial is scheduled for next month.

For more, see Former mortgage officer pleads guilty, makes deal.

To view the indictment, see U.S. v. Dimitrion, et al.

Go here for other posts on this case.

Clipping Homeowners For Improper, Unexplained Fees A Common Practice For Some In Mortgage Servicing Industry

In St. Cloud, Minnesota, the St. Cloud Times reports:

• Charging improper or unexplained fees is a common practice for some mortgage servicing companies and is a larger part of the national foreclosure crisis than most people realize, experts say. Questionable property inspections, late fees when payments aren’t late, forcing homeowners to buy insurance even when they already have it — all occur nationwide and often go unchallenged by consumers, they say.

• “It’s really a major problem, and it’s been around for a long time,” said O. Max Gardner III, a North Carolina attorney who teaches bankruptcy boot camps for other lawyers.

• A mortgage servicer is responsible for collecting monthly loan payments and crediting the homeowner’s account. The servicer also handles escrow accounts for taxes and insurance. The servicing companies don’t actually own the loan, so they may not have a strong interest in providing good customer service. In fact, they may have an incentive to force a homeowner into foreclosure. “The more defaults they have, the more fees they collect, the more money they make,” said David P. Leibowitz, a Chicago-based foreclosure defense attorney.

For more, see Experts: Improper fees play part in crisis (Servicers may benefit from loans in default).

In a related story, see Couple blames fees in loss of home (Residents say dream of raising a family in their first home drowned in a flood of questionable mortgage charges).

For earlier posts on the alleged mortgage servicing practice of padding fees with phony charges, see:

• Countrywide Padded Legal, Other Fees When Servicing Mortgages, Says Suit; Class Action Status Sought,
• Wall Street Journal On Investigations Of Possible Phony Claims By Mortgage Servicers & Lenders In Homeowners' Bankruptcy Cases,
• Homeowners In Foreclosure Being Clipped For Illegally Inflated Legal & Appraisal Fees, Says Lawsuit.

Go here, go here, go here, and go here for posts on questionable mortgage servicing practices. QuestionableServicingTacticsSigma

Jacksonville Foreclosure Rescue Operator Dodges Another Bullet As Prosecutors Drop Criminal Charges

In Jacksonville, Florida, The Florida Times Union reports:

• Prosecutors have dropped mortgage fraud charges against a man accused of skimming home equity from distressed homeowners. The case against Thomas Cuomo could not stand in the wake of an e-mail and paper trail showing the mortgage company he was working with wasn't the victim of fraud - but instead the possible cause of it.

• Cuomo, who once was a housing counselor for the Jacksonville Urban League, bought homes from people in foreclosure. At one time, he was suspected of skimming out what equity had been built up and renting them back to the original owners, promising them a chance to buy the houses back.(1)

***

• April Charney, an attorney at Jacksonville Area Legal Aid and one of the nation's experts in foreclosure law, is defending one of the foreclosures on behalf of the tenant, Lester Thomas, who sold his house to Cuomo. Thomas still lives there because the bank has not been able to prove it has the right to foreclose on it.

For more, see Charges against man accused of fraud dismissed (He was suspected of skimming equity from distressed homeowners).

(1) Reportedly, he was first charged in 2007 with money laundering and mortgage fraud after state investigators found similar stories from nearly a dozen people in Duval and Clay counties. That case was dismissed on a technicality. In 2008, he was charged again, this time accused of taking out fraudulent loans.

Kansas AG Probes Firm's Activities For Possible Deception In Buying Up Redemption Rights From Foreclosed Homeowners

In Witchita, Kansas, The Witchita Eagle reports:

• The Kansas Attorney General's Office is investigating complaints alleging "unconscionable business practices" by a Wichita company that buys and sells homes in foreclosure. Attorney general spokeswoman Ashley Anstaett said she couldn't say more about the complaints against Liberty Asset Management. But Liberty's critics, including some of its competitors, accuse it of taking advantage of people in foreclosure.

• One instance they cite involves Liberty buying property rights for $10, allowing it to claim almost $20,000 in equity that would have gone to a deceased resident's heirs. The issue centers on Liberty's methods in getting people to sell so-called redemption rights to their property.

For more, see Kansas attorney general investigates home buyer-seller's foreclosure practices.

Washington State Officials Shut Down Adult Home; Accuse Owner Of Leaving Country While Facility Faced Foreclosure; Residents Left "In Imminent Danger"

In Kent, Washington, the Kent Reporter reports:

• The Washington State Department of Social and Health Services has announced the suspension of the license of a Kent Adult Family Home due to "numerous violations that jeopardized the safety and well-being of residents," according to paperwork from the state agency.

• The suspension means the home [...] must stop admitting residents and that the residents living at the home must be moved to other "settings," or care facilities. Those residents have been moved, according to dshs officials. The suspension went into effect March 5.

• According to a letter sent to home operator Stevan Bachici, a Feb. 18 inspection of the facility determined that "residents are in imminent danger." The Feb. 20 DSHS letter outlined three "serious deficiencies" as well as seven "significant deficiencies." At the top of the state's "serious deficiencies" was the ability of the facility to provide care and service. According to the letter, Bachici left the country while the home was in foreclosure, and the staff in charge did not have the "skills, ability or authority to ensure residents remained safe."

For more, see Safety violations: DSHS suspends license of Kent adult home.

Landlord's Financial Distress Causing Stress, Confusion For Tenants Around The Country

msnbc.com reports on Irvine, California-based landlord Bethany Holdings Group, which is reported to have abandoned a dozen apartment complex in the Phoenix, Arizona area as well as a number of buildings in other states after defaulting on hundreds of millions of dollars in loans.

Reportedly, Bethany complexes have been threatened with gas or electricity shut-offs due to non-payment of bills; and employees at many of the Phoenix area properties say they have been stiffed out of their paychecks for a month or more before courts began appointing receivers to assume control of the complexes. Tenants are also facing a loss of their security deposits.

Courts in Arizona, California, Colorado and Florida are said to have become involved in the appointment of receivers to maintain and preserve Bethany's holdings which serve as collateral for the delinquent loans.

For more on the story, see Corporate meltdown leaves renters in limbo (Large apartment complexes abandoned to receivership and unruly weeds).

For other media reports on Bethany Group complexes in foreclosure in other states, see:

• Virginia: Receiver named for Portsmouth apartment complexes,
• Georgia: Management Company Deliquent On Rent, Power,
• Arizona: Court-appointed receiver takes over Bethany communities.

Go here for other posts on Bethany Group buildings in foreclosure.