Wednesday, May 06, 2009

NYC Public Forum: Options When Facing Foreclosure

In New York City, the Brooklyn Daily Eagle reports:
  • Thurs. May 7, Public Forum: Options When Facing Foreclosure, 6 p.m.-8 p.m. Speaker: Lynn Armentrout, director, Lawyers Foreclosure Intervention Network, City Bar Justice Center. Held at the New York City Bar Association, 42 West 44th St., Manhattan. Free and open to the public. For information or to register, contact the City Bar: www.nycbar.org.

Source: Upcoming Events in the Legal Community - May 6, 2009.

Feds Award Colorado Firm Linked To Risky Subprime Mortgages With $798M Jackpot; State Congressional Staffers Refuse Comment

In Douglas County, Colorado, The Denver Post reports:
  • The U.S. Treasury has pledged $798 million in incentives to Aurora Loan Services LLC of Douglas County for help in refinancing homeowner mortgages, according to The Associated Press. The company, a subsidiary of bankrupt Lehman Brothers, is the 10th Colorado financial institution this year to receive federal funds intended to boost the economy.

***

  • The firm's risky lending practices, including allowing low down payments and requiring no income documentation, were part of a widespread Lehman strategy involving mortgage-backed securities that led to Lehman's bankruptcy.

  • Officials for Aurora Loan Services were not available for comment or could not be reached Tuesday. Staffers with three Colorado congressional offices would not comment Tuesday because they had not seen documentation of the award to Aurora.

For more, see Aurora loan firm hits jackpot (Aurora Loan Services, which engaged in risky lending, has been pledged incentives to help refinance mortgages).

Northern Virginia Loan Modification Firm The Target Of Media Scrutiny, Customer Protests

In Vienna, Virginia, The Huffington Post reports:
  • [T]he FTC said several [loan modification] operations, which guarantee they can get lenders to reduce monthly payments and prevent foreclosure in return for an upfront fee, advertised their services under names designed to suggest government affiliation -- names like Federal Loan Modification Law Center and Bailout.hud-gov.us.

  • One company that has not hidden behind such a title is The Shmuckler Group. Days before the Federal Trade Commission announced its crackdown, dozens of Shmuckler clients protested outside the company headquarters in Vienna, Va., saying the firm never came through on promises to modify loans after collecting thousands in upfront fees.

  • "I think it's a scam," said Kristi Cahoon, director of a foreclosure assistance program at Legal Services of Northern Virginia, a non-profit law firm that provides legal help to low-income Northern Virginia residents. "Based on what I've seen it doesn't appear that they've done anything for the clients" after taking their money.

For more, see Shmuckler Group: Another Mortgage Rescue Firm Accused Of Scam.

See also:

(1) According to the story, Kristi Cahoon told the Huffington Post she has over 20 cases with Shmuckler clients and that she has filed complaints with the Virginia Bureau of Financial Institutions over Shmuckler's licensing. In March the Washington Post reported that Maryland Department of Labor, Licensing and Regulation is investigating the Shmuckler Group and that Shmuckler is up for disbarment in D.C. Shmuckler wrote in his letter that on March 30 the government raided his office, taking computers and files.

Standing-Lacking Rhode Island Mortgage Lenders Now Under Attack By "Produce The Note" Strategy

In Providence, Rhode Island, NBC Nightly News reports on Rhode Island attorney George E. Babcock, who reportedly has used the "produce the note" strategy in his effort to help 100% of his foreclosure clients slam the brakes on the loss of their homes through foreclosure. Florida foreclosure defense attorney April Charney makes a cameo appearance in the story.

For more (video only, approx. 2:16), see Lawyer Practices "Foreclosure Stoppage."

For posts that reference the failure of mortgage lenders and their attorneys to file the proper paperwork when bringing foreclosure actions, Go Here, Go Here, Go Here, Go Here, Go Here, Go Here, and Go Here. EpsilonMissingDocsMtg

Feds, Florida Foreclosure Rescue Operators Settle Civil Charges Of TILA, HOEPA Violations

The Federal Trade Commission recently announced:
  • Two individuals who lured homeowners into high-cost, short-term loans secured by an additional mortgage on their homes have settled FTC charges that they violated federal law – and a previous court order against them. Thomas C. Little, an attorney, also settled contempt charges based on his role in facilitating the scam. The Commission sued them and seven other defendants in February 2008 as part of an ongoing effort to crack down on businesses that prey upon homeowners facing foreclosure.

***

  • The settlements with Christopher Tomasulo and Bonnie Werner (formerly Bonnie A. Harris) resolve these charges and impose judgments of $2,791,040.40 each, which will be suspended based on their inability to pay. The full judgments against them will become due immediately if they are found to have misrepresented their financial condition.(2)

For the entire press release, see Mortgage Foreclosure ‘Rescue’ Defendants Settle FTC Charges for Deceiving Homeowners.

For links to copies of the initial lawsuits, the settlements, and the related press releases, see:

(1) The defendants allegedly violated the Home Ownership and Equity Protection Act (HOEPA) by extending credit based on the value of consumers’ collateral without regard to their repayment ability, by requiring balloon payments after only six months, by providing negatively amortized loans that cause consumers to owe more at the end of the loan than at the beginning, and by failing to make required disclosures. The defendants also allegedly engaged in a number of violations of the Truth in Lending Act (TILA).

(2) Other defendants in these cases are: Silverstone Lending, LLC, a Florida limited liability company; Silverstone Financial LLC, a Florida limited liability company; Keystone Financial, LLC, a Nevada limited liability company; Southeast Advertising, Inc., a Florida corporation; MT25 LLC, a Nevada limited liability company; and Peter J. Porcelli, II, individually and as officer, partner, or member of Silverstone Lending, LLC, Silverstone Financial LLC, and Safe Harbour Foundation of Florida, Inc..

Desperate South Florida Developers Turn To Lease To Own Programs To Fill Up Unsold Inventory

In Miami, Florida, The Miami Herald reports:
  • [W]ith some of the region's swankiest projects honeycombed with empty units, developers are increasingly using lease-to-own programs as a way of attracting wary buyers and eager renters. Some are offering terms unheard of in normal markets.

***

  • The proliferation of lease-to-own options represents the latest survival strategy for developers whose projects came to market just as prices crashed and credit markets dried up, making it nearly impossible for potential condo buyers to obtain financing. Developers currently hold about 10,000 new units in the greater downtown Miami area alone, not to mention the thousands of new condos and condo conversions built throughout the rest of Miami-Dade and Broward counties.

For more, see Lease-to-own condo deals attracting buyers (South Florida condo developers are using lease-to-own options to attract renters and fill unsold units. Would-be buyers are responding because condo loans are hard to get).

California Man Charged With Selling House Out From Under Vacationing Homeowners

From the Office of the Santa Cruz County, California District Attorney:
  • Santa Cruz County District Attorney Bob Lee announced [last week] that Raymond Tate was arrested today in connection with a deed dispute involving property in Ben Lomond owned by Tom Decker and his wife Maria McArthur.

  • The case began when the couple came back from vacation to find someone living in their house. The occupant, Daniel Judd had a grant deed from the seller, California Housing Association LLC, signed by Raymon Tate, the owner of the California LLC. The only problem was that Tate's California Housing Association LLC, didn't own the property. In 2007 Tom Decker and Maria McArthur had formed a Nevada LLC with the name California Housing Association, and they were the true owners of the property. An investigation by the District Attorney's office revealed the names of the true owners and the deed scam.

  • District Attorney Bob Lee commented, "To come home and find someone living in your house is bad enough, but to then to prove to law enforcement that you really own the house, just adds insult to injury." Tate formed his California LLC on 3/26/09 and then sold the Decker's property on 4/2/09 to Daniel Judd.

Go here for the April 28, 2009 press release.

Go here, 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. DeedZetaTheft

Tuesday, May 05, 2009

South Carolina High Court Slams Brakes On Thousands Of In-State Fannie, Freddie Foreclosures

In Columbia, South Carolina, The Associated Press reports:

  • South Carolina's highest court has temporarily stopped thousands of pending foreclosure sales so homeowners can take advantage of a new federal program to refinance mortgages. The state Supreme Court on Tuesday issued a restraining order preventing South Carolina judges from finalizing foreclosure sales on properties with mortgages backed by Fannie Mae or Freddie Mac.

  • The order also applies to any mortgage lender who has signed on to a federal assistance program.

***

  • The ruling was in response to a request from a Columbia attorney representing Fannie Mae, who had argued that it was necessary to keep homeowners who might be eligible for federal assistance from being shut out of the process.

  • "Absent the injunction, mortgagors eligible for relief under the HMP program could be denied their right to participate because their property was sold at the foreclosure sale," Ronald Scott wrote in his three-page motion. "This qualifies as irreparable injury for which the court should provide redress in the form of a temporary injunction."

For more, see SC court halts thousands of home foreclosure sales.

Ohio AG Wins $300K+ Judgment In Loan Modification Foreclosure Rescue Scam; Fires Warning Shots Against 10 Others With Subpoenas, C&D Orders

From the Office of the Ohio Attorney General:
  • Ohio Attorney General Richard Cordray [Monday] announced that a foreclosure rescue scam company operating out of Cincinnati has been shut down and now owes more than $300,000 in damages and civil penalties. The default judgment issued out of Hamilton County Common Pleas Court demands that Foreclosure Solutions and owner Timothy Buckley pay $225,000 in civil penalties and $79,565 in restitution for scamming Ohioans facing foreclosure.(1)

***

  • Also, in an unprecedented move, Cordray [Monday] issued 10 cease and desist demands with accompanying subpoenas to businesses suspected of operating rescue scams in Ohio. The cease and desists demand that the companies halt all predatory practices, and the subpoenas require information to substantiate current practices. The sweep is the first in a widespread investigation into rescue operations targeting Ohio. “This is a strong, preventative measure to keep foreclosure rescue scammers out of Ohio,” said Cordray. “It is a warning shot announcing that we have no tolerance for these predatory practices in our state.”

For the entire press release, see Cordray Puts Heat on Foreclosure Rescue Operations (Attorney General pursues more than $300,000 in restitution and penalties; Launches multi-state cease and desist sweep).

For the Ohio AG lawsuit, see State of Ohio v. Foreclosure Solutions L.L.C.

Go here for other posts and lawsuits against Foreclosure Solutions.

(1) According to the press release, from January 2003 through May 2008, Foreclosure Solutions solicited Ohioans who were going through foreclosure via direct mail and offered services to save their homes. The company then arranged in-person meetings and entered into written agreements with the promise to act as an agent to stop the foreclosure. After charging amounts ranging from $750 - $1,300 the company never provided the services promised and some Ohioans lost their homes.

3 Accused With Stealing $4M In Escrow Funds; Title Insurer Takes $3M+ Hit; Used Photoshop Software To Create Altered Bank Statements, Say C. Fla. Cops

In Orange County, Florida, WDBO Radio reports:
  • Orange County Sheriff's Economic Crime Unit arrested Michelle Worley [...] on grand theft charges. Deputies allege that between December 2004 and July 2006, Worley and the partners of Preferred Alliance Title, Patrick Torre and John Callaghan, misappropriated approximately $4 million in escrow funds. Investigators say the escrow funds were used to operate other businesses such as a real estate company, a restaurant and a magazine publishing company.

  • The suspects, investigators say, were able to hide their fraud from Stewart Title Guaranty, by conducing fraudulent monthly bank reconciliation with altered bank statements. Stewart Title insured a number of real estate transactions which were closed at Preferred Alliance Title. After satisfying all of the lien holders and various other entities, Stewart suffered an approximately $3.1 million dollar loss.

Source: Three accused of multi million dollar fraud.

See also, Orlando Sentinel: Third suspect arrested in $4 million escrow-fraud case:

  • [T]hey hid their activities from Stewart Title Guaranty, referred to as the "victim," by creating altered bank statements with Photoshop software, the Sheriff's Office's economic-crime unit said. EscrowRipOffAlpha

Title Agency Owner Cops Plea To Pocketing $3.4M In Escrow Funds From Real Estate Closings Intended To Pay Off Existing Lien Holders

From the Office of the U.S. Attorney (Maryland):
  • Deborah Williams, age 56, of Pasadena, Maryland, the owner of a Severna Park title company, pleaded guilty [last Friday] to mail fraud related to a scheme to divert settlement funds to her own benefit, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

***

  • According to her plea agreement, [...] Deborah Williams used for her own benefit settlement funds from real estate closings that were deposited in Day Title’s escrow account and were intended to pay off the lien holders on those properties. [...] Williams attempted to conceal her illegal transactions by falsely representing on the settlement documents that her company had paid off lien holders, then sent the falsified settlement documents to the lender by commercial carrier. In fact, Williams either initiated stop payments of payoff checks that had been disbursed or intentionally failed to mail the payoff checks to the lien holder.

  • Day Title’s failure to make the pay offs to the lien holders was not detected until sellers began receiving delinquency notices from their mortgage companies. The time delay between the settlement and the date when Day Title made the pay offs to the lien holders allowed Williams to replenish the escrow account with proceeds from new unrelated real estate settlements.

  • A title insurance company that had issued policies through Day Title, began to receive claims from lien holders who had not been paid off and conducted an audit of Day Title. The title insurance company found over 16 properties where Williams had not paid off the lien holder. The company paid out a total of $3.443 million to these entities, as required under the title insurance policies that guaranteed that the buyer was receiving a title free of prior liens. As part of her plea agreement, Williams must forfeit $3.4 million, the amount she admits that she failed to pay to the lenders.
For the entire press release, see Pasadena Title Company Owner Pleads Guilty to Defrauding Lenders of over $3.4 Million (Diverted Real Estate Proceeds to Personal Use and Created False Settlement Documents). EscrowRipOffAlpha

Suspected Memphis-Area Straw Buyer, Rent Skimming Scam Leaves Tenants Facing Eviction & Investors Holding The Bag

In Memphis, Tennessee, WREG-TV Channel 3 reports:
  • You've seen homes across Memphis foreclosed and boarded up. But there's a deeper problem uncovered by News Channel 3; one that points to a housing hustle and one Memphis couple. Our investigation revealed a troubling pattern that has one attorney and the state promising a thorough investigation.

  • Larry and Marilyn Conway, an elusive couple who by all accounts love cash and live large, won't return calls, but they can't run from their own past. One tenant, on the verge of being evicted, is so afraid she wants us to call her "Denise". Her attorney, Webb Brewer with Memphis Area Legal Services, says the Conways make their money off the poor and off uninformed investors.

  • "All of these mortgages that these investors were left with were sub-prime loans with high interest-rates and bad terms," says Brewer. "I'm fortunate I found out when I did," says Denise who says the Conways tried to get her to buy her rental home, until she learned the Conways didn't own it.

  • Brewer says the Conways find investors to buy rental homes. The Conways collect the rent and they pay the investor's mortgage. Then they stop paying, but keep collecting rent. The homes fall into foreclosure, the investors are left with the loan, and the renters have to move. Meantime, the Conways rake in thousands.

For the story, see Housing Hustle?

In a related story, see Investigation: Renters Victims Of Housing Hustle. RentSigmaSkimming

Countrywide's Mozilo Attempt To Move Florida AG Suit To Federal Court Thwarted As District Judge Boots Case Back To State Court

From the Office of the Florida Attorney General:
  • Attorney General Bill McCollum [last week] announced that his office has obtained a federal court order remanding the Attorney General’s lawsuit against former Countrywide CEO and Chairman of the Board Angelo R. Mozilo back to Broward County Circuit Court. The lawsuit, filed last June, addresses deceptive trade practices relating to Countrywide’s alleged practice of placing consumers in loans they could not afford or with rates which were false or misleading. Mozilo was named as a defendant.

***

  • When the civil complaint was originally filed in Broward County Circuit Court by the Attorney General’s Economic Crimes Division, Countrywide and Mozilo sought to remove the action to Federal Court in Florida and the case was subsequently consolidated in the Southern District of California. Attorney General McCollum argued the case should be remanded to state court so Mozilo would be tried in Florida under Florida’s Deceptive and Unfair Trade Practices Act. Earlier [last] week, the Federal Court agreed with the Attorney General’s request and sent the case back to state court in Broward County.(1)

For the entire press release, see McCollum: Former Countrywide CEO, Board Chairman Must Stand Trial in Florida.

For the federal court order remanding the case back to state court, see State of Florida v. Countrywide Financial Corporation, et al.

(1) For more on erroneous removals of lawsuits filed in state court to federal court, see:

Monday, May 04, 2009

Media Report Shines Light On Use Of Multiple Corporate Hat-Wearing Dummy "Vice Presidents" By Lenders To Sign Court Documents In Foreclosure Actions

In Central Florida, an investigative report by the St. Petersburg Times shines light on, what appears to be, a bogus arrangement being utilized by foreclosing mortgage lenders in which they authorize employees of a local firm to sign as "vice president'' in assigning loans from one company to another in an attempt to expedite foreclosure actions (and, presumably, with the hope that judges hearing the actions won't catch on to what they are doing).
  • Despite the turmoil in the lending industry, Bryan Bly seems to have no trouble finding a job. On Aug. 3, 2007, Bly signed a document as vice president of Option One Mortgage. On Feb. 13, 2009, Bly signed a document as vice president of Deutsche Bank. And on Feb. 18, 2009, Bly initialed dozens of documents — this time as vice president of Citi Residential Lending.

  • In fact, Bly never worked for any of those. His real employer is Nationwide Title Clearing, a Pinellas County company that helps lenders clean up problems that can complicate efforts to foreclose.

  • Bly, who lives in a Clearwater trailer park, is one of several Nationwide employees authorized by lenders to sign as "vice president'' in assigning loans from one company to another. Assignments are key in determining who actually owns the loan, an issue that has become all-important as banks foreclose on millions of loans that were bundled into securities and sold to investors.

***

  • Critics, though, say that Bryan Bly and "vice presidents'' like him at similar companies are part of an assembly-line process designed to resolve a big problem: In the rush to "flip'' loans as fast as possible in order to make more money, the new loan holders often failed to get the proper paperwork showing they owned the loan and had the right to foreclose.

***

  • To expedite transactions, Nationwide gets resolutions from lenders that authorize Bly, [...] and other employees of "proven reliability'' to sign as their vice presidents, said [Jeremy] Pomerantz, the Nationwide spokesman. On a big project like the Citi-to-Deutsche loan assignments, "they may sit there all day for a week and sign.''

***

  • But it is exactly that assembly-line process that makes critics wonder if "vice presidents'' can be certain that what they are signing is accurate and legal.(1) "Papering over a hole doesn't make the hole disappear,'' [Tampa attorney Chris] Hoyer said. "Using this device to present an air of legitimacy is an affront to the judicial system and a stain on society.''

For more, see Tampa Bay companies help lenders transfer home loans, foreclose.

For other posts on lenders using multiple corporate hat-wearing vice presidents to sign off on court documents in foreclosure actions, see:

(1) The St. Pete Times' story highlights two examples where judges refused to roll over and permit these slick and sloppy lender tactics.

In one example in New York, Brooklyn Supreme Court Justice Arthur M. Schack dismissed Deutsche Bank's motion to foreclose on a $408,000 loan last year because it had started foreclosure proceedings while the loan was still owned by IndyMac Bank. The judge said he wouldn't reconsider the case unless Deutsche explained why one woman — Erica Johnson-Seck — had signed as vice president of two different companies. The justice also said he was "perplexed'' as to why both Deutsche and IndyMac had the same address, and why an affidavit by Johnson-Seck, who supposedly worked in California, was notarized in Texas (see Deutsche Bank National Trust Company v. Harris, 2008 NYSlipOp 30308(U), February 5, 2008).

(In other cases where Justice Schack had problems with the same Erica Johnson-Seck with respect to her apparent wearing of multiple corporate hats when signing court documents for a number of lenders in different foreclosure actions, see Deutsche Bank Natl. Trust Co. v Maraj, 2008 NY Slip Op 50176(U) [18 Misc 3d 1123(A)], Decided on January 31, 2008; and IndyMac Bank, FSB v Bethley, 2009 NY Slip Op 50186(U) [22 Misc 3d 1119(A)], Decided on February 6, 2009.)

In a second example in a New Jersey case, another foreclosure case was reportedly thrown out after the "vice president'' for Deutsche Bank acknowledged she was only an assistant secretary. "She said she was told to fill out the paperwork however it needed to be done in order to make the document look valid,'' a New Jersey mortgage expert said. EpsilonMissingDocsMtg

More On Lenders, Mortgage Servicers Using Short Sale Contracts, Promissory Notes To Squeeze Homeowners Looking To Unload "Underwater" Homes

The Wall Street Journal reports:
  • Financially troubled borrowers may think that foreclosure or a short sale of their home means their mortgage woes are over. Not necessarily.

  • Some homeowners are finding that when they sell their homes for less than the outstanding mortgages -- a so-called short sale -- their mortgage companies are going after them for some or all of the difference. Mortgage companies are also sometimes taking legal action to recover unpaid amounts after a foreclosure is completed.

  • In a growing number of cases, holders of mortgages or home-equity loans are requiring borrowers in short sales to sign a promissory note, which is a written promise to pay back a loan or debt. Real-estate agents and attorneys say they have seen an increase in requests for promissory notes as mortgage companies look to short sales as an alternative to foreclosure.(1)

For more, see A Short Sale May Not Mean You're Home Free.

(1) According to the story, the number of short-sale agreements that are made with strings attached is increasing. In the past month and a half, "every short sale I have has had a promissory note or gives the lender the right to collect a deficiency," says Pamela Simmons, an attorney in Soquel, Calif., who represents financially troubled homeowners. Often, the terms are buried in the sale contract, she says. Regina Rivard, a real-estate consultant in Apollo Beach, Fla., has completed 22 short sales in the past six months. In half of them, the holder of the first or second mortgage required that the borrower sign a promissory note or retained the right to pursue the deficiency. The amounts borrowers were obliged to pay ranged from a few thousand dollars to as much as $100,000, she says.

Woman Cops Guilty Plea In California Loan Modification Fraud That Scammed 100+ People

From the Office of the California Attorney General:
  • Continuing his crackdown on mortgage fraud, Attorney General Edmund G. Brown Jr. late Thursday won a guilty plea from 22-year old Anna Santos, who conned thousands of dollars from homeowners in a "cruel and sophisticated" loan scam. Santos will be formally sentenced on May 20 in Los Angeles Superior Court. She is expected to receive 2 years in prison. "Santos conned thousands of dollars from homeowners trying to save their homes through a cruel and sophisticated scam," Brown said. "She held out hope, but in reality did not provide an ounce of loan modification, leaving her victims unprotected and in far worse straits." Santos was arrested on March 12, 2009 after she used forged documents to convince victims to hand over thousands of dollars for non-existent loan modification services.(1)

For the entire press release, see Brown Obtains Guilty Plea from Woman Who Operated Sophisticated Loan Scam.

For more from the California AG on its criminal action against Santos, see:

(1) According to AG Brown, Santos obtained a fictitious business permit through the City of Los Angeles for "Payment Processing Department." She opened several bank accounts and two post office boxes under that name. She mailed flyers to vulnerable homeowners that appeared to be from victims' lenders or a government agency. The flyer used a large, bold header that read "Final Notice" and advised homeowners that they qualified for a special program to save their home from foreclosure. After signing up for "loan modification services," homeowners then received what appeared to be "confirmation" that their lender had been notified. Many victims also received loan modification documents that appeared to be from their lender. These documents were all forgeries. The victims were informed they had been placed in a "probationary" program and their mortgage payments should be submitted to "Payment Processing Department" and sent to a given post office box address. None of the payments were credited to the victims' home loans.

Massachusetts Community Organizer Uses "Sword & Shield" Approach To Stop Foreclosure Evictions

In Jamaica Plain, Massachusetts, PBS' Bill Moyers Journal reports:
  • [C]ommunity organizer Steve Meacham of City Life/Vida Urbana is fighting on the frontlines of the foreclosure crisis. Meacham and his colleagues at City Life employ a community organizing strategy they call the ["sword & shield".]

  • The "shield" is a strategy of legal defense: teaching City Life members about their rights under the law, plus providing access to volunteer legal assistance. The "sword" is a public relations strategy, where City Life organizes protests in front of banks, and eviction blockades in front of people's homes.

  • For these protests, City Life tries to attract as much media attention as possible, trying to draw public scrutiny towards what they argue are unfair banking and eviction practices in their community. "We find that the two [strategies] work extremely well in combination," says Meacham. He says that a strong legal defense often isn't enough to avoid eviction. "A legal defense is not enough because in Massachusetts the banks can evict you for no reason. And so for many people the strongest legal defense will simply slow the bank down. Slowing the bank down, however, can be very, very important because it gives us a chance to use the public protest to good benefit. If the bank is facing the prospect of a long, drawn-out legal procedure, even one that they might ultimately win.. and at the same time they're going through that, they're being regularly protested by City Life.. that is a public relations battle the bank loses every time. So faced with that combination of long, drawn-out legal defense and public protest, the banks are very often choosing to negotiate and settle with us." According to City Life, they've been able to prevent evictions for 95% of the people who've come to their door by employing the "sword and shield" strategy.

For more, see Steve Meacham: Fighting Foreclosure.

Go here for the accompanying video of the Bill Moyers' Journal program (approx. 23 minutes).

Sunday, May 03, 2009

Arizona Feds Being Flooded With Thousands Of Complaints On Loan Modification Scams

In Phoenix, Arizona, KNXV-TV Channel 15 reports:
  • At a time when families are losing their homes to foreclosure, others are seeing a way to prey on their desperation. And right now the FBI is inundated with loan modification fraud schemes.

***

  • "I've never seen these levels of fraud in the 12 years I've been in Arizona," said Julie Hafferty, Special Agent in charge of Arizona's mortgage and fraud division with the FBI. Hafferty says they're getting thousands of complaints to investigate. Homeowners have paid out $500 to $5,000 dollars hoping to save their homes with more affordable payments, but in return were robbed.

For more, see Valley FBI office swamped with loan modification scams.

Another Prospective Tenant Falls Victim To Phony Landlord Scam

In Dale City, Virginia, Newschannel 8 reports:
  • A local family who thought they had found the perfect home ended up losing more than $1,000 to an accused scam artist. The five-bedroom house on a quiet Dale City street was everything Patricia Keith had always wanted. "Well, it was a dream," she said. But despite putting down more than $1,000 in a security deposit and first month's rent, Keith never had the chance the call the house home.

  • Sources say 24-year-old Armeca Wright is now facing fraud charges for trying to rent a house that didn't belong to her. "It took us awhile to actually scrape our money together," said Keith. "We've been homeless since 2007." [...] This is yet another negative by-product of the foreclosure crisis. Con artists break into and try to pawn off vacant and abandoned homes to unsuspecting people.

For the story, see Virginia Woman Scammed While Trying to Rent Home.

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

More On Property Owners Being Tricked Or Deceived By Scammers Into Signing Documents

The following California cases appear to support the proposition that criminal prosecutions for forgery can be properly brought against those (ie. equity stripping, foreclosure rescue operators and others) who trick or deceive financially strapped homeowners into unwittingly signing over interests in their homes through grant and trust deeds (cases available online courtesy of Findlaw.com; fre registration may be required):

People v. Martinez, (2008) 161 Cal. App. 4th 754; 74 Cal. Rptr. 3d 409:
  • Nevertheless, a forgery conviction can be based on a document with a genuine signature. "[F]orgery is committed when a defendant, by fraud or trickery, causes another to execute a . . . document where the signer is unaware, by reason of such trickery, that he is executing a document of that nature." (People v. Parker (1967) 255 Cal.App.2d 664, 672.)

  • Defendant argues that this rule applies only where the "fraud or trickery" consists of an affirmative misrepresentation regarding the nature of the document. He concedes that Michiel may have "signed the . . . trust deed without understanding what she was signing," but he argues that he "did not make any material affirmative misrepresentations to her."

  • Preliminarily, even assuming defendant is correct about the law, there was sufficient evidence that he did, in fact, affirmatively misrepresent the nature of the trust deed. Michiel testified that defendant "provided [her] with a number of documents to sign to try and help [her] with [her] financial problems . . . ." (Italics added.)

***

  • In sum, there was evidence that defendant presented Michiel with a stack of documents to be signed and that he affirmatively misrepresented to her that their purpose was to help her with her financial problems and/or help her file a bankruptcy.

  • Separately and alternatively, however, even assuming there was no evidence that defendant affirmatively misrepresented the nature of the trust deed, he could still be found guilty of forgery. People v. Parker, supra, 255 Cal.App.2d 664 involved strikingly similar facts. There, the defendants (Parker and Ex) sold aluminum siding to a number of homeowners. They gave each purchaser a stack of papers, including a trust deed, and they indicated where the purchaser should sign. Occasionally, they affirmatively misrepresented the nature of the trust deed; for example, they told two couples that the papers consisted of a "purchase order," plus several "copies" thereof. (Id. at p. 668 [Edwards and Helland transactions].) Most of the time, however, they simply failed to disclose that the papers included a trust deed. (Id. at pp. 667 [Kinsfather transaction], 668-669 [Buss transaction], 669 [Dick transaction], 669-670 [Longoria transaction], 670 [Kincaid transaction].) The appellate court held that there was sufficient evidence of forgery in connection with each and every sale (see id. at pp. 665-666): "The crime of forgery is committed when a defendant, by fraud or trickery, causes another to execute a deed of trust or other document where the signer is unaware, by reason of such trickery, that he is executing a document of that nature." (Id. at p. 672.) "Clearly, from the evidence in this case appellants are guilty of the forgeries as charged . . . . [Citations.]" (Ibid.)
People v. Parker, (1967) 255 Cal.App. 2d 664:
  • The crime of forgery is committed when a defendant, by fraud or trickery, causes another to execute a deed of trust or other document where the signer is unaware, by reason of such trickery, that he is executing a document of that nature. In Buck v. Superior Court, supra, (an aluminum siding case) 232 Cal.App.2d 153, it is stated at page 162: "Where a person who has no intention of selling or encumbering his property is induced by some trick or device to sign a paper having such effect, believing that paper to be a substantially different instrument, the paper so signed is just as much a forgery as it would have been had the signature been forged. [Citations.] ... The crime of forgery is complete when one makes or passes an incorrectly named instrument with intent to defraud, prejudice, or damage, and proof of loss or detriment is immaterial. [Citations.] Whether the instrument forged has independent value is unimportant; the crime is complete when the act is done with the requisite intent." (See also Buck v. Superior Court, supra, 245 Cal.App.2d 431, 436-437 [54 Cal.Rptr. 282]; People v. Carson, 240 Cal.App.2d 477, 480 [49 Cal.Rptr. 653].)

  • Clearly, from the evidence in this case appellants are guilty of the forgeries as charged and of the grand theft as charged. (See Buck v. Superior Court, supra; People v. Bresin, 245 Cal.App.2d 232, 237-238 [53 Cal.Rptr. 687]; Buck v. Superior Court, supra, 232 Cal.App.2d 153, 162.) [255 Cal.App.2d 673].

Buck v. Superior Court, (1966) 245 Cal.App.2d 431, 436-437; 54 Cal.Rptr. 282:

  • That the crime of forgery is committed when a defendant, by fraud or trickery, causes another to execute a deed of trust or other document, where the signer is unaware, by reason of such trickery, that he is executing a document of that nature, is now settled by Buck v. Superior Court, supra, (1965) 232 Cal.App.2d 153.

People v. Carson, (1966) 240 Cal.App.2d 477, 480; 49 Cal.Rptr. 653:

  • The issue is settled in Buck v. Superior Court, supra, 232 Cal.App.2d 153, 161- 162, where the court said: "Where a person who has no intention of selling or encumbering his property is induced by some trick or device to sign a paper having such effect, believing that paper to be a substantially different instrument, the paper so signed is just as much a forgery as it would have been had the signature been forged. [Citations.] An encumbrance may be the subject of forgery. [Citation.] The crime of forgery is complete when one makes or passes an incorrectly named instrument with intent to defraud, prejudice, or damage, and proof of loss or detriment is immaterial. [Citations.] Whether the instrument forged has independent value is unimportant; the crime is complete when the act is done with the requisite intent."

Buck v. Superior Court, (1965) 232 Cal.App.2d 153:

  • Where a person who has no intention of selling or encumbering his property is induced by some trick or device to sign a paper having such effect, believing that paper to be a substantially different instrument, the paper so signed is just as much a forgery as it would have been had the signature been forged. (Conklin v. Benson, 159 Cal. 785, 791 [116 P. 34, 36 L.R.A. N.S. 537]; Wright v. Rogers, 172 Cal.App.2d 349, 362 [342 P.2d 447].) An encumbrance may be the subject of forgery. (Conklin v. Benson, supra, page 792.) The crime of forgery is complete when one makes or passes an incorrectly named instrument with intent to defraud, prejudice, or damage, and proof of loss or detriment is immaterial. (People v. McAffery, 182 Cal.App.2d 486, 493 [6 Cal.Rptr. 333]; People v. Morgan, 140 Cal.App.2d 796, 800 [296 P.2d 75].) Whether the instrument forged has independent value is unimportant; the crime is complete when the act is done with the requisite intent."

People v. McAffery, (1960) 182 Cal.App.2d 486, 493, 6 Cal.Rptr. 333:

  • The crime of forgery (Counts I, II and III) is committed when one makes or passes a false instrument with intent to defraud, the element of loss or detriment being immaterial (People v. Morgan, 140 Cal.App.2d 796, 800; 296 P.2d 75).

Wright v. Rogers, (1959) 172 Cal.App.2d 349, 342 P.2d 447:

  • "Where a person who has no intention of selling his property is induced by some trick or device to sign a paper having such effect, believing that paper to be a substantially different instrument, the paper so signed is a forgery." (People v. Nesseth, 127 Cal.App.2d 712, 718-720, 274 P.2d 479.

People v. Morgan, (1956) 140 Cal.App.2d 796, 800; 296 P.2d 75:

  • That crime is committed when one makes or passes a false instrument with intent to defraud. "The crime of forgery consists either in the false making or alteration of a document without authority or the uttering (making use) of such a document with the intent to defraud. (Pen. Code, § 470.) Whether the forged instrument is one of a particular [140 Cal.App.2d 801] name or character or, if genuine, would create legal liability, is immaterial; the test is whether upon its face it will have the effect of defrauding one who acts upon it as genuine." (People v. McKenna, 11 Cal.2d 327, 332 [79 P.2d 1065].) "In the case of a forgery of an instrument it is not necessary that the forged writing create a valid and legally enforcible obligation in order to constitute the making of it a forgery. It is sufficient that it may possibly deceive another and was prepared with intent to deceive and defraud another. Where the writing alleged to have been forged shows on its face that it might be the means of fraud, no averments of extrinsic facts to show how this could be are necessary." (People v. Brown, 101 Cal.App.2d 740, 742 [226 P.2d 647].) Failure to consummate the intended fraud is not of the essence. (People v. Horowitz, 70 Cal.App.2d 675, 688 [161 P.2d 833].)

People v. Nesseth, (1954) 127 Cal.App.2d 712, 718-720; 274 P.2d 479:

  • Mr. Justice Fox' statement in People v. Frankfort, 114 Cal.App.2d 680, 700; 251 P.2d 401, is here appropriate: "... The fact that the documents were read would not make it inherently improbable that other, different and additional representations were made by the salesmen.

  • "Defendants insist these contracts insulate them from this prosecution because they contain the statement that they constitute the entire agreement between the parties, that the Spa Corporation is not bound by any representations outside the contract, that no salesman is authorized to make any additional or contrary representations, and that the club member has read and understands what he is signing. The simple answer to this argument is that 'The People prosecuting for a crime committed in relation to a contract are not parties to the contract and are not bound by it. They are at liberty in such a prosecution to show the true nature of the transaction.' ... The practical wisdom of the rule is illustrated in this case. Upon at least three occasions prospective purchasers complained to defendant Nudelman that the written agreement did not seem to conform to what they had been told, whereupon he assured each party, in effect, that everything would be taken care of and he need not worry."

***

  • That the foregoing facts constitute forgery is evident. Section 470 of the Penal Code provides in part as follows: "Every person who, with intent to defraud, ... falsely makes, alters, forges, or counterfeits, any ... writing obligatory, ... contract ... is guilty of forgery."

  • That the correct rule is that the procuring of a genuine signature to an instrument by fraudulent representations constitutes forgery is supported by these well reasoned authorities: State v. Shurtliff, 18 Me. 368; Commission v. Foster, 114 Mass. 311 [19 Am.Rep. 353]; Gregory v. State, 26 Ohio St. 510 [20 Am.Rep. 774]; State v. Farrell, 82 Iowa 553 [48 N.W. 940]; Williams v. State, 213 Ala. 1 [104 So. 40]; Williams v. State, 20 Ala.App. 337 [104 So. 38]; Horvath v. National Mortg. Co., 238 Mich. 354 [213 N.W. 202, 56 A.L.R. 578]; Turner v. Nicholson, 115 Okla. 56 [241 P. 750]; Julia Oil & Gas Co. v. Cobb, 128 Okla. 260 [262 P. 650].

  • This rule appears to be supported by Conklin v. Benson, 159 Cal. 785, where the court says, at page 791 [116 P. 34, 36 L.R.A.N.S. 537]: "There is no foundation in the facts above set forth for the conclusion that the papers signed by plaintiff were forgeries, and absolutely ineffectual even to serve as a basis for the application of the doctrine of estoppel. The theory of the learned judge of the trial court appears to have been that all of these papers, including the deeds of the Monache lands to the United States, were in effect forgeries and absolutely void. The idea underlying this apparently was that plaintiff was so deceived in the matter of executing these instruments as to bring her within the doctrine of certain cases which substantially hold that where a person who has no intention of selling or encumbering his property is induced by some trick or device to sign a paper having such effect, believing that paper to be a substantially different instrument, the paper so signed is just as much a forgery as it would have been had the signature been forced. These decisions are not such as to sustain plaintiff's claim in this regard. The distinguishing feature between all such cases and the case at bar is that here plaintiff fully understood and believed that she was signing papers which, when delivered, would convey all her interest in the Monache lands. She intended to execute papers having this effect. The difference between the papers she thought she was signing, according to the evidence, and the papers she actually signed, was merely one of detail and in no degree material, one set of papers having precisely the ultimate effect of the other, the conveyance of her interest in this land. Her real and only complaint upon her own testimony was her failure to personally receive full payment for her land claimed to have been occasioned by reason of the failure of her agent to place the papers in escrow, to be taken up as payments were made, and the delivery thereof to Benson without payment first having been made. ..."

People v. Frankfort, (1952) 114 Cal.App.2d 680, 700; 251 P.2d 401:

  • The fact that the documents were read would not make it inherently improbable that other, different and additional representations were made by the salesmen. Defendants insist these contracts insulate them from this prosecution because they contain the statement that they constitute the entire agreement between the parties, that the Spa Corporation is not bound by any representations outside the contract, that no salesman is authorized to make any additional or contrary representations, and that the club member has read and understands what he is signing. The simple answer to this argument is that "The People prosecuting for a crime committed in relation to a contract are not parties to the contract and are not bound by it. They are at liberty in such a prosecution to show the true nature of the transaction." (People v. Chait, 69 Cal.App.2d 503, 519 [159 P.2d 445]; People v. McEntyre, 32 Cal.App.2d Supp. 752, 760 [84 P.2d 560]; People v. Jones, 61 Cal.App.2d 608, 620 [143 P.2d 726]; People v. Pierce, supra, p. 605.) The practical wisdom of the rule is illustrated in this case. Upon at least three occasions prospective purchasers complained to defendant Nudelman that the written agreement did not seem to conform to what they had been told, whereupon he assured each party, in effect, that everything would be taken care of and he need not worry.

People v. Brown, (1951) 101 Cal.App.2d 740, 742; 226 P.2d 647:

  • In the case of a forgery of an instrument it is not necessary that the forged writing create a valid and legally enforcible obligation in order to constitute the making of it a forgery. It is sufficient that it may possibly deceive another and was prepared with intent to deceive and defraud another. Where the writing alleged to have been forged shows on its face that it might be the means of fraud, no averments of extrinsic facts to show how this could be are necessary.

People v. McKenna, (1936) 11 Cal.2d 327, 332; 79 P.2d 1065:

  • The crime of forgery consists either in the false making or alteration of a document without authority or the uttering (making use) of such a document with the intent to defraud. (Sec. 470, Pen. Code.) Whether the forged instrument is one of a particular name or character or, if genuine, would create legal liability, is immaterial; the test is whether upon its face it will have the effect of defrauding one who acts upon it as genuine. (People v. Gayle, 202 Cal. [11 Cal.2d 333] 159 [259 P. 750]; People v. Thorn, 138 Cal.App. 714 [33 PaCal.2d 5]; People v. Munroe, 100 Cal. 664 [35 P. 326, 38 Am.St.Rep. 323, 24 L.R.A. 33].) A deed which conveys no title may be the subject of forgery. (People v. Baender, 68 Cal.App. 49 [228 P. 536].)

Go here for other posts on forgery & forged documents involving genuine signatures. ForgeryGenuineSignatureKappa

84 Year Old New Jersey Woman Among Those Targeted In Alleged Equity Stripping, Sale Leaseback Scam

In Bayonne, New Jersey, The Jersey Journal reports:
  • An 84-year-old Bayonne woman is among the victims of two Union City companies that promised to help homeowners facing foreclosure save their homes, officials say. But instead of saving people's homes, the companies purchased the houses at deep discounts, saddled the owners-turned-tenants with even bigger monthly payments, and in a number of cases, including that of the Bayonne woman, evicted the previous owners, officials say.(1)

  • "The unifying thread among these cases is that the defendants not only stole people's money, they stole their hope," said state Attorney General Ann Milgram last week in announcing the lawsuit, filed in Hudson County Superior Court, that details at least four cases.

For more, see STATE A.G. SAYS LOAN CREEPS STOLE HOMES (Lawsuit targets alleged mortgage swindle).

For the lawsuit, see Milgram v. Property Solutions of NJ Inc., et al.

(1) According to the lawsuit, the defendants offered to help save the victim's home by paying the balance of the homeowner's delinquent mortgage and then entering into a sale leaseback agreement with the victim, officials said. But the monthly lease payments were often far higher than the mortgage payments the homeowner couldn't make in the first place and they were typically required to buy the home back within 90 days at a far higher price than the defendants' paid, officials said. Named as defendants in the lawsuit are Property Solutions of N.J, Inc. and PSRE Holding Company, LLC, both of Union City. Also named are individual defendants Edward Toledo, the president of Property Solutions and a member of PSRE, Leon Toledo, the vice-president of Property Solutions, and Raymond Vega, the company treasurer and a member of PSRE. foreclosure rescue

Undercover Cops Bag Arizona Man Facing Foreclosure In Alleged Attempt To Strip Home Of Fixtures, Appliances & Unload Them Using Craigslist Ad

In Maricopa County, Arizona, The Arizona Republic reports:
  • A Maricopa County grand jury indicted Kailash Bhatt, a local real estate agent, in connection with stealing various housing fixtures from a foreclosed house and reselling them. He was charged April 21 with theft and defrauding secured creditors.

  • According to the legal report, Bhatt took fixtures — including kitchen cabinets, a granite counter top, a double oven, microwave and dishwasher — from a foreclosed Anthem home that he owns and attempted to sell them on Craigslist.

  • Bhatt was arrested after accepting $2,000 of a deal totaling $9,000 from an undercover FBI Mortgage Task Force agent posing as a buyer, the report said. He intended to sell the fixtures from his home, violating a contract he signed with the mortgage company in control of the foreclosed property.

Another report on this story points out that the indictment represents the first of its kind involving a crime that local real estate professionals say is rampant. Disgruntled homeowners forced into foreclosure strip their properties before vacating them.

For more, see Real estate agent accused of stealing, selling home fixtures.

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

Saturday, May 02, 2009

Foreclosure Mediation Program To Begin In Washington County

In Washington County, Pennsylvania, the Observer Reporter reports:
  • In an attempt to reduce the number of people who lose their homes because of mortgage foreclosure, Washington County President Judge Debbie O'Dell Seneca this week set up a program to avert what she called a "crisis." The judge calls her plan the Mortgage Foreclosure Diversion Program. It's up to creditors to notify those whose mortgage payments are in arrears of the new program.

For more, see County judge offers program to prevent foreclosure 'crisis.'

California Police Chief To Slap Cuffs On Negligent Bank Officials Over Blighted Foreclosed Homes?

In Indio, California, The Wall Street Journal reports:
  • Officials at a Citigroup Inc. office in St. Louis placed a call to this desert town recently. The bank had caught word that Indio was coming after the lending giant with fines and threats of criminal charges. The offense: an algae-infested swimming pool at 79760 Eagle Bend Court.

  • Citigroup wound up in charge of the foreclosed home, one of thousands of such properties it was managing across the country. But last year, Indio passed a law that allowed it to charge banks with a criminal misdemeanor if they allowed a home to fall into disrepair.

  • "If I need to do it, I'll say, 'Mr. Bank President, if you don't come and take care of your property, we're going to come arrest you and take you to court in California,'" says Brad Ramos, Indio's long-serving police chief.(1) The hard-line approach is part of this town's attempt to gain leverage over some of the nation's largest lenders.

***

  • Mr. Ramos has organized his department to focus on this new type of crime. Uniformed officers make weekly sweeps through subdivisions, casting about for infractions like dead landscaping.

For more, see Banker: 'What'd I Do Wrong, Officer?' Cop: 'You've Got Algae in the Pool, Sir' (Fearing Blight, a California Town Makes It a Crime to Neglect Foreclosed Homes).

(1) According to the story, the City of Indio clipped Citigroup for a $3,450 fine. The bank also promptly sent a cleaning crew to remove the algae and otherwise clean the pool. BetaVacantForeclosure

Evictions, Foreclosure, Consumer Debt To Be Addressed By NYC Legal Outreach Pro Bono Effort

In New York City, The New York Law Journal reports:
  • With foreclosures and evictions on the rise and consumers increasingly saddled with debt, New York City officials are enlisting attorneys to volunteer their time for a new pro bono effort. Approximately 40 representatives from pro bono organizations, the court system, several bar associations and city law schools gathered [last week] at City Hall to kick off "NYC Legal Outreach."

  • "This bottom line . . . is to figure out a way to harness pro bono legal help to those who really need it," Corporation Counsel Michael A. Cardozo told the group. [...] The city does not want to "reinvent the wheel" but rather "galvanize" more volunteers and add the "mayor's bully pulpit" to existing efforts, Mr. Cardozo said.

***

  • Specifically, NYC Legal Outreach will focus on four "key" service areas: evictions, foreclosures, consumer debt and immigration, all areas that have mushroomed as a result of the financial crisis.

For more, see City Launches Program to Boost the Ranks of Pro Bono Attorneys.

Framingham Legal Services Group Scores $20K For Post-Foreclosure Eviction Defense Project

In Boston, Massachusetts, the Boston Business Journal reports:
  • The Boston Bar Foundation has awarded $185,000 in grants to eight nonprofits that all work to prevent homelessness, the organization said Tuesday. Organizations that received grants include the [...] Metrowest Legal Services’ Post-foreclosure Eviction Defense Project, which received $20,000, [...].

Source: Boston Bar Foundation awards $185k.

Florida Statewide Volunteer Legal Program To Help Homeowners Avoid Foreclosure Nearing 1,000 Attorneys

In Tallahassee, Florida, the Miami Daily Business Review reports on the Florida Attorneys Saving Homes ("FASH") program, a pro bono effort to help financially strapped Florida homeowners nearing, but not yet in, foreclosure avoid the loss of their homes.
  • [F]ASH has expanded to about 1,000 volunteer lawyers statewide and organized a roundtable discussion [last] week in Tampa with lending representatives. [...] “The demand has been so overwhelming that we’re in need of more lawyers,” said Adele Stone, a partner with Atkinson Diner Stone Mankuta & Ploucha in Fort Lauderdale who is on the FASH steering committee. One stated goal of the roundtable was to get more lawyers familiar with the principals of foreclosure defense.

***

  • A lot of pro bono attorneys are using this time to gain familiarity with a new area of law. That way they can expand their practice” in the recession, said Jennifer Newton, the program’s director and a staff attorney with Florida Legal Services. The program operates out of Florida Legal Services in Tallahassee and is funded through The Florida Bar Foundation.

***

  • Not everyone in mortgage distress is eligible for the program. A home already in foreclosure isn’t eligible, and homes must be homestead property to be eligible. [...] FASH is one of many foreclosure public service programs involving lawyers across the state.

For more, see Mortgage Crisis: Program helps keep owners from losing homes.

Mother Nature Forces Family From Home Of 30+ Years As Slow-Moving Landslide Victimizes Over A Dozen Others; Lender Left Holding Worthless Mortgage

In North Salt Lake, Utah, KSL-TV Channel 5 reports:
  • A slow-moving landslide has been described as a nightmare that has lasted more than 10 years, and it is finally forcing a North Salt Lake family to move from their longtime home. The floor and the walls are cracking, paint is bubbling and beams are breaking in Dauneen Abel's house. She and her family have watched their home, their investment, fall apart piece by piece.

  • "It's like the house is being squeezed together, because everything is coming up in the middle," Abel said. Her home on Springhill Drive and more than a dozen others in North Salt Lake are victims of a slow-moving landslide. After battles with the city and the state, there was nothing more Abel could do but go into foreclosure.

  • "I don't mind leaving the house. I'm going to have a hard time leaving my friends," she said. She's lived in the home for more than 30 years and raised all four children there, but activity in the past few months has made her realize it's time to go. [...] State geologists estimate the ground in this area is now moving at a rate of 2 inches a week, almost 9 feet a year.

For more, see Landslide forces couple to give up on home.

Obtaining Mortgage Loan On Condo Unit May Depend On Neighbors' Financial Stability

The Washington Post reports:
  • Benjamin Chiang nearly lost the chance to refinance his condominium when his lender discovered that many other people in the building were behind on their condo dues. "It made me a little peeved that my loan depended on the credentials and behavior of my neighbors," said Chiang, who bought his Arlington home eight years ago.

  • Condo owners share more than roofs and lobbies these days. They also share one another's financial burdens. New mortgage industry policies are forcing lenders to look more closely at the makeup of entire complexes before extending loans to prospective buyers or to people who want to refinance.

For more, see New Condo Loan Rules Put More Scrutiny on Neighbors.

Friday, May 01, 2009

Maryland Lawmaker Accused Of Scamming Homeowner In Foreclosure Dodges Bullet As Unfavorable Jury Verdict Limits Liability To $11K

In Anne Arundel County, Maryland, The Baltimore Sun reports:
  • An Anne Arundel County jury ruled Thursday that a state delegate will have to pay $11,000 to a woman who signed her home over to him, but that he did not intentionally defraud her. Del. Tony McConkey, a Severna Park Republican, said that the ruling was "a complete vindication." "It couldn't have turned out any better," he said.

  • In September, Anne Arundel Circuit Judge D. William Simpson found that McConkey, a real estate agent, violated a state law intended to protect homeowners in foreclosure in his dealings with Theresa Milligan over her Pasadena condominium. The jury found that McConkey should pay Milligan $28,000 for the loss of her home and $6,000 in other damages. But they also ruled that Milligan should pay $23,000 to McConkey for breaking her contract with him. Milligan's attorneys, Peter A. Holland and Michael Morin, had asked the jury to grant her as much as $1.5 million for the loss of the home and emotional distress. The single mother of three, who has been staying with her brother since losing the condominium, is "devastated" by the ruling, Morin said.(1)

Source: $11,000 awarded in McConkey case.

See also, WBAL-TV Channel 11: Jury Decides Against Delegate In Mortgage Case.

(1) According to this story, the case remains open as the homeowner's attorneys said they plan to ask the court to make McConkey pay their attorney fees. Attorney Michael Morin said they also plan to argue Milligan should not have to pay McConkey back the $23,200 because it was part of an illegal contract.

Bankruptcy Cramdown Legislation To Force Home Mortgage Modifications Fails In Senate

The Wall Street Journal reports:
  • A measure to allow bankruptcy judges to rework mortgages of strapped homeowners failed in the U.S. Senate Thursday, clouding its chances of becoming law. The defeat is a setback for the Obama administration, which had championed the measure as a central plank of its plan to right the housing market.

***

  • The measure would allow bankruptcy judges to reduce the principal amount of mortgage loans for struggling borrowers - a process dubbed "cramdown." Currently, mortgages on vacation properties, but not primary residences, can be reworked by bankruptcy judges.

For more, see Bill To Let Judges Rework Mortgages Fails In US Senate (subscription required; if no subscription, go here, then click link for story).

Foreclosure Rescue Operator Gets 60 Days In Jail Amid Ongoing SC AG Suit Alleging UTP Act Violation & Criminal Probe Into Unauthorized Practice Of Law

In Horry County, South Carolina, The Horry Independent reports:
  • A Lexington, N.C., man, who is listed as a defendant in more than 40 mortgage foreclosures in Horry County court, was sent to jail recently on contempt of court charges. Horry County jail logs show Robert Steve Jolly, 59, was still in jail [Wednesday] morning, two weeks into his 60-day sentence. Jolly was in Horry County court for a hearing recently that covered several topics.

  • The S.C. Attorney General’s Office has filed a civil suit against Jolly,(1) asking a circuit judge to stop him from preying on people who have fallen behind on their mortgage payments. Also, according to Horry County court documents, Circuit Judge Michael Baxley summoned Jolly to court at the same time on a Notice of Hearing and Rule to Show Cause. According to the document, the purpose of that hearing was to take testimony and hear argument on whether Jolly or anyone acting on behalf of Robert Jolly & Associates should be dismissed from all presently pending cases before the court as a result of allegations of the unauthorized practice of law and/or taking of action to undermine the administration and interest of justice.

***

  • Mark Plowden, spokesperson for the Attorney General’s Office, said the investigation began on the civil side, not the criminal side. “Now this office has a two-pronged attack against Jolly. There are these civil proceedings that you see before you, but there’s also a parallel criminal investigation ... The criminal investigation will be into unauthorized practice of law,” Plowden said, adding that the criminal investigation is not as far along as the civil one.

For more, see State Attorney General mounts fight for distressed borrowers.

Go here and Go here for other posts on issues relating to foreclosure rescue activities and the unlicensed/unauthorized practice of law.

(1) The story reports that the Attorney General’s Office claims Jolly has violated the South Carolina Unfair Trade Practices Act, and that, according to the lawsuit, Jolly began seeking out financially distressed South Carolina homeowners and titleholders to real property in March of 2007, offering to help them avoid foreclosure of their homes. Jolly encouraged homeowners to give his company a quitclaim deed, or a similar document, giving him rights to their property, according to the lawsuit. In exchange, he promised to pay off their mortgages and, in turn, they agreed to make monthly payments to Jolly & Associates to pay down their debt, according to the lawsuit. The idea was to keep homeowners from facing foreclosure. The lawsuit claims that Jolly is neither a real estate agent nor a lawyer licensed in the state of South Carolina; and that Jolly received payments from the homeowners, but didn’t pay their rightful mortgage companies, which actually put the homeowners farther behind in their payments than they already were.

In a case with a similar fact pattern (see Ohio Man Guilty Of 26 Counts In Foreclosure Rescue, Rent Skimming Scam; Allegedly Conned 14 Homeowners Into Belief He Would Renegotiate Home Loans), Licking County, Ohio prosecutors obtained guilty verdicts last November against a foreclosure rescue operator who allegedly deceived homeowners into signing over deeds to their homes on the premise that he would negotiate with their mortgage companies to avoid defaulting on their home debts while collecting rent thereon. He allegedly failed to make the mortgage payments while pocketing the collected rent, allowing homes to go into foreclosure. He was reportedly convicted of nine counts of grand theft, 13 counts of securing writings by deception and four counts of theft. UnauthPractOfLawTheta

Ohio AG Targets Loan Modification Firm Accused Of Pocketing Upfront Fees In Exchange For Empty Promises

In Conneaut, Ohio, WKYC-TV Channel 3 reports:
  • The companies promise to rescue you from losing your home. Instead, they take your money and do nothing. Just ask Carol Jenkins of Conneaut. She and and her late son, Robert Curtis, trusted James Van Putten and his local company, Please Save My Home, to rescue them from foreclosure. "He was in town here, so I trusted him," Jenkins said. But she and her son soon discovered Van Putten's promises were empty ones. "I never got any phone calls back from him whatsoever,'' Jenkins told Channel 3 News. "By this time, we had already paid him the $650 (fee), so we didn't have any money to send to our mortgage company."

***

  • [Ohio Attorney General] Richard Cordray has filed suit against Van Putten and his Conneaut company on behalf of dozens of customers in nine counties who say they were swindled.

For more, see Foreclosure rescue scams target most vulnerable.

For the Ohio Attorney General press release on this case, the accompanying lawsuit, and copies of the correspondence and contract used by the foreclosure rescue operator (Exhibits A thru D), see Mortgage Rescue Company Sued for Consumer Fraud.

Sleazy Tactics Alleged By Washington State AG In Civil Suit Against Debt Collector

From the Office of the Washington State Attorney General:
  • The Attorney General’s Office is suing an Everett-based collection agency accused of harassing, threatening and cussing at consumers. Representatives of Topco Financial Services, Inc., allegedly called debtors names such as “loser,” scum,” “plight on society,” “no good,” “lowlife,” “deadbeat,” “worthless,” or “terrible parents,” as well as profane names not suitable for print. That kind of language isn’t just abusive – it’s illegal. It’s also the type of unfair business practice that can make it harder for legitimate collectors who play by the rules to do their job.

***

  • The state’s complaint(1) submitted [...] to Snohomish County Superior Court accuses the company, president Tracey Austell, of Mill Creek, and secretary/treasurer Harry Packer, of Desert Hot Springs, Calif., of violating the state’s Consumer Protection Act.

For the entire press release, see Debt collector to consumer: “&#$%*!” (Attorney General sues Everett collection agency for harassment, threats).

For the lawsuit, see State of Washington v. Topco Financial Services, Inc., et al.

In a related post, see Tough Economy Triggers Sleazy Collection Practices As Threatening, Humiliating MySpace Messages, Profanity Alleged In Civil Suits.

(1) The complaint states, among other things, that while attempting to collect on debt, Topco or its representatives frequently have used harassing, threatening, intimidating, embarrassing and offensive language, including (see Complaint - paragraph 7.2(a) thru (e)):

  • Disparaged debtors with comments including, “You got yourself into this [profanity] situation,” and “What kind of mother is she to raise a daughter like you?
  • Threatening to “bi*ch slap” a debtor.
  • After having been informed by a debtor that she was undergoing tests for possible cancer, representatives allegedly replied, “Aren’t you dead yet? I’m going to collect the money from you dead or alive,” and “Why don’t you just die from cancer because you are a low-life deadbeat?
  • Using offensive language by calling debtors names, including, but not limited to: "worthless f**king loser, "piece of sh*t," "bi*ch," and "dumb a**."

Denver Man With Unaffordable Mortgage Strips House, Sells Fixtures On Craigslist, Walks Away, Then Apologizes After Bank Obtains Restraining Order

In Denver, Colorado, KUSA-TV Channel 9 reports:
  • The man 9Wants to Know caught stripping fixtures in his home ahead of foreclosure and then yelled at our team from his front doorway, now says he's sorry. "Our intentions were never to strip the house, but after the treatment of the bank towards us it was a decision made out of hurt, anger and stress not knowing it was an illegal act," wrote Jesse Adams in an e-mail to 9Wants to Know.

  • Adams and his wife, Heidi Hayes, put an ad on Craigslist offering the kitchen sink, countertops, cabinets and toilets for sale. Hayes is the registered owner of the home. The two say they were married earlier this month after leaving the house and moving to the Las Vegas area.

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  • Oklahoma based MidFirst Bank, which loaned Hayes the money for the home, got a judge to issue a restraining order keeping Adams and Hayes out of the house after 9Wants to Know told MidFirst Bank of our investigation. MidFirst Bank says it is considering its legal options.

For more, see Man who stripped home's fixtures apologizes,

See also, Everything must go: Sales cost taxpayers thousands:

  • It is not your typical "everything must go" garage sale. A new trend called pre-foreclosure or foreclosure sales offer deals for some, but often costs taxpayers thousands of dollars, according to mortgage experts and real estate agents interviewed by 9Wants to Know. The sales offer everything from the kitchen sink to countertops, cabinets, toilets, the hot water heater and the furnace from a home. Homeowners hold the sales ahead of foreclosure in an attempt to make money before they leave the house.

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

Thursday, April 30, 2009

Free Foreclosure Self-Defense Seminar For Financially Strapped Homeowners Upcoming In Miami

In Miami, Florida, the South Florida Caribbean News reports:

  • Miami-Dade County Commissioner Audrey M. Edmonson understands the housing crisis our country, state, and county is going through. Therefore, she is co-sponsoring along with the Miami-Dade Housing Finance Authority and Miami-Dade Affordable Housing Foundation Inc a FREE foreclosure legal assistance seminar to help those homeowners who are in any stage of foreclosure. Attendees will learn about their rights and legal defenses available. The event will be held Saturday, May 2 at the American Legion Post, located at 6445 N.E. 7th Ave, from 9 a.m. to 1 p.m. [...] Attorneys who specialize in foreclosure cases will answer questions and meet with homeowners one-on-one FREE of charge.

For more, see Miami-Dade County Commissioner co-sponsors a free foreclosure legal assistance seminar.

Maryland Lawmaker Accused In Equity Stripping Foreclosure Rescue Scam Tells Jury He Was "Doing The Lord's Work"

In Anne Arundel County, Maryland, The Baltimore Sun reports:
  • A state delegate from Anne Arundel County, who is being sued for damages by a Pasadena woman who claims he tricked her into signing over her home, told a jury Wednesday that he was "doing the Lord's work." In his closing arguments, Del. Tony McConkey, a Severna Park Republican and real estate agent who is a law school graduate and represented himself in court, said that he was trying to help the woman save her home from foreclosure and that he never "knowingly and willfully broke the law."

  • Attorneys for Teresa Milligan asked the jury to award her $1.5 million for damages for the loss of her condominium and pain and suffering. "This is the American Dream we're talking about," Peter A. Holland said in his closing arguments. "She is always going to feel the humility, the indignity and the shame of this."

  • Holland is representing Milligan with Michael Morin. Milligan, a mother of three, has been living with a brother since losing her home, according to court testimony. Anne Arundel County Circuit Judge D. William Simpson ruled in September that McConkey had acted wrongly in transfering ownership of the condominium to himself.(1) The jury began deliberations Wednesday evening and is expected to reach a verdict Thursday morning.

Source: Delegate denies tricking woman out of home (McConkey says home transfer was 'doing the Lord's work').

See also, WBAL-TV Channel 11: Delegate Defends Self In Mortgage Trial (McConkey Accused In Foreclosure Rescue Scheme).

(1) Another recent Baltimore Sun story reports that Milligan's civil suit against McConkey alleges "foreclosure rescue fraud," a violation of a homeowner protection law that he voted for in 2005. In January 2006, Milligan said, McConkey offered to help her save her condo from foreclosure and to help her obtain a loan to make payments, according to court testimony. Milligan signed ownership of her condominium over to McConkey, but then called him within the allotted three days to say that she had changed her mind, according to her testimony in Anne Arundel County Circuit Judge D. William Simpson's courtroom Tuesday. Eight months later, McConkey filed the original contract that Milligan had signed and began the paperwork to have her removed from the home, according to court documents.

Oregon To Sponsor Day-Long Event For Homeowners Facing Foreclosure

In Portland, Oregon, The Register Guard reports:
  • [D]ozens of nonprofit housing counselors, state consumer affairs specialists and lender representatives will gather Saturday at the Portland Memorial Coliseum to help Oregonians in danger of foreclosure. The state-sponsored, daylong event is designed to ease considerable confusion about mortgage rescue plans and to simplify the lives of about 10,000 Oregon borrowers who are in danger of losing their houses. [...] Admission to Saturday’s Home Ownership Preservation Event is free. Hours are 10 a.m. to 7 p.m. [...] For information, check www.dfcs.oregon.gov/HOPE.html or call (866) 814-9710.

For the story, see State to sponsor housing help event Counselors and workshops will offer advice for Oregon residents facing foreclosure.