South Philly Mortgage Broker Gets 12+ Years In Mortgage Fraud Scam Involving Borrowed, Stolen IDs, 180 Properties In Or Near Foreclosure

In Philadelphia, Pennsylvania, The Philadelphia Inquirer reports:

• A South Philadelphia mortgage broker charged with a murder-for-hire plot was sentenced yesterday to more than 12 years in federal prison for a separate mortgage-fraud scheme. Mahn Huu "Bruce" Doan, 40, was sentenced [...] to 151 months in prison and was ordered to pay more than $5 million in restitution.

• Doan oversaw 195 fraudulent real estate transactions involving about 180 properties, financed with government-insured loans he obtained by using borrowed or fictitious identities, prosecutors wrote in a sentencing memorandum. "On almost every single property, the mortgage loan is in or about to be in foreclosure," prosecutors wrote. "Net losses - to the government on government-insured loans, and to various banks, on the conventional loans - could total more than $6 million."

For more, see Mahn Huu Doan sentenced to 151 months for fraud.

L.A. Feds Charge Man With Filing Fraudulent Bankruptcy Petitions As Part Of Foreclosure Rescue Scam Targeting Financially Strapped Homeowners

From the Office of the U.S. Attorney (Los Angeles):

• A Los Angeles man was taken into federal custody last [week] on charges that he has been defrauding homeowners by falsely promising them that he could prevent foreclosures and evictions from their property. Gilfert Welton Jackson, 64, [...] was indicted on June 4, and charged with six counts of making false representations and filing documents in bankruptcy proceedings in furtherance of a scheme to defraud. According to the indictment, which was unsealed after his arrest, Jackson’s scheme was designed to bilk distressed homeowners, as well as banks and other creditors by fraudulently obstructing lawful foreclosure and eviction actions.

The indictment alleges that Jackson falsely passed himself off as an attorney, collecting money from property owners and tenants in exchange for promises that he could prevent foreclosure and eviction actions. Jackson is also alleged to have filed bankruptcy petitions, identfying himself as the attorney for the debtors, in order to obtain “automatic stays” to stall foreclosures and evictions. He is also alleged to have collected rent from those living in the the homes during the period of time that the legal actions were stalled, based on the false representation that he was the rightful landlord of the properties.

For the entire press release, see Los Angeles Man Arrested On Charges Of Abusing Bankruptcy System To Defraud Those In Foreclosure.

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

DeKalb District Attorney's White Collar Unit Takes Aggressive Approach When Prosecuting Elder Exploitation Cases

In DeKalb County, Georgia, the Atlanta Journal Constitution reports on how the county district attorney's white collar crime unit head Jeanne Canavan deals with the problem of the inability of elder exploitation victims(1) to testify (ie. due to death or infirmity) at the criminal trial of the alleged perpetrator:

• Once a defendant is indicted, Canavan moves quickly to secure the elderly victims’ testimony out of concern they may be unable to testify by the time the case goes to trial. She takes a novel approach, filing court motions that cite a 2004 U.S. Supreme Court precedent(2) that requires pre-trial testimony to be admitted only if the witness had previously been subject to cross-examination.

• Canavan obtains a judge’s approval for a hastily called hearing, where the victim testifies before a prosecutor, the defendant and the defense attorney, who is allowed to cross examine the witness. The testimony, if needed, can be used later at trial.

• Canavan said she will not forget her first elderly exploitation case in 2004 involving 89-year-old widower Leonard Stewart. Stewart was dining alone at a DeKalb restaurant when he was approached by Nicholas Marks. Marks befriended the elderly man, falsely identifying himself as a lawyer. Over time, Marks got Stewart to sign over possession of his car and his home. He also charged more than $22,000 on Stewart’s credit cards.

• By the time of trial, Leonard was dead. But because he testified at a pre-trial bond hearing —- during which he was subject to cross-examination — Leonard’s testimony was admitted into evidence. Marks was convicted and sentenced to five years in prison.

For the story, see Elderly victims find help to fight fraud (Many targeted by very people claiming to care. DeKalb creates task force to combat rise in crime against seniors).

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

(1) Canavan commented: “We are seeing elderly victims with their life savings wiped out, their homes taken away. They take everything they have. We’ve seen this happen over and over and over.”

(2) See Crawford v. Washington, 541 U.S. 36; 124 S. Ct. 1354; 158 L. Ed. 2d 177 (2004). In addressing a criminal defendant's federal constitutional right to be confronted with the witnesses against him, the court stated:

• According to our description of that right in Ohio v. Roberts, 448 U.S. 56, 65 L. Ed. 2d 597, 100 S. Ct. 2531 (1980), it does not bar admission of an unavailable witness's statement against a criminal defendant if the statement bears "adequate 'indicia of reliability.'" Id., at 66, 65 L. Ed. 2d 597, 100 S. Ct. 2531. To meet that test, evidence must either fall within a "firmly rooted hearsay exception" or bear "particularized guarantees of trustworthiness." Ibid. FinancialAbuseOfElderlyAlpha

Minnesota Woman Charged With Pocketing $1.1M+ In Real Estate Sale Proceeds Belonging To Her 89-Year Old Dementia-Suffering Mom, Leaving Her Destitute

From the Office of the Minnesota Attorney General:

• The Office of Minnesota Attorney General Lori Swanson [...] filed a criminal complaint in Rice County District Court charging a Dakota County woman, Connie Ruth Rott, with nine felony counts of theft by swindle and five felony counts of financial exploitation of a vulnerable adult for diverting over $1.1 million held in trust for the benefit of Rott’s elderly mother, D.S. Because of Rott’s depletion of D.S.’s assets, the State’s taxpayer-funded Medical Assistance program is now paying for the 89-year-old D.S.’s nursing home and medical bills, at a monthly cost of $4,200.

• “The sad thing about this case is that, unlike many senior citizens, the 89-year-old victim started out with plenty of money to pay for her nursing home and medical care. Because of the daughter’s exploitive self-dealing, the mother’s assets have been substantially depleted, and the taxpayer-financed Medical Assistance program is now paying for her care,” said Attorney General Lori Swanson.

• In 2000, D.S. placed real estate she owned in Northfield, Minnesota that she originally farmed with her late husband into a revocable trust to be used for her care, comfort, support, and maintenance, naming her daughter Rott as Trustee. D.S. also signed a durable power of attorney that year naming Rott as her attorney-in-fact, and in 2003, Rott was named D.S.’s legal guardian. In 2004, D.S. was admitted to the dementia unit of the Three Links Care Center, a Northfield nursing home. D.S. requires total assistance with activities of daily living. Rott agreed to make timely payments to Three Links using D.S.’s income and assets.

• The complaint alleges that, between 2004 and 2007, Rott sold three pieces of the real estate D.S. placed into trust, for a net amount of over $1.3 million, and then diverted over $1.1 million in proceeds from the sale of the real estate to her own benefit or for the benefit of persons other than D.S.

For the entire press release, see Attorney General Charges Woman With Felony Theft and Financial Exploitation for Depleting $1.1 Million In Assets Held In Trust For Elderly Mother (Taxpayer-Funded Medical Assistance Is Now Paying for 89 Year Old’s Nursing Home Care).

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

Utah AG Prosecution Of Foreclosure Rescue Operator Accused In Dubious Equity Stripping, Sale Leaseback Deals Hits Another Delay

In Farmington, Utah, the Standard Examiner reports:

• One of the oldest foreclosure-rescue fraud cases in the state against a Morgan businessman has hit another road block. The Attorney General’s Office charged Jeffery Q. Wangsgard, 57, with three counts of communications fraud and two counts of exploitation. The charges were filed in February of 2008 and stem from dealings Wangsgard’s Layton company, Residential Resolve, had with three Top of Utah families who wanted to save their homes from foreclosure. Wangsgard was ruled indigent and Dee Smith was appointed as his defense attorney. However, Smith recently was appointed as a Deputy Weber County Attorney. The case is now under defense attorney Rich Gallegos. [...] Gallegos said the earliest he could proceed with a trial will be in six months.

For more, see Fraud case hits another roadblock.

See also, How A Utah Couple Was Kicked Out Of Their Home By Mortgage "Helper."

Go here for earlier posts on this story.

Two Miami Men Face Charges Of "Hijacking" Vacant, Foreclosed Homes & Renting Them Out; Used Craigslist To Reel In Unsupecting Tenants, Say Cops

In Miami, Florida, WFOR-TV Channel 4 reports:

• Miami-Dade Police have arrested two men who they say scoured neighborhoods for vacant and foreclosed homes, broke in to them, removed and changed the locks and then used a popular website to rent them to unsuspecting tenants. [...] Police said 34-year-old Benjamin Sandora not only confessed to the crimes, but he also added, "Times are rough and I took advantage." Sandora, who's from Fort Lauderdale, and 38-year-old Melchised Martinez, face felony charges including organized scheme to defraud, burglary of an unoccupied dwelling, grand theft and uttering a forged instrument or lease. [...] Detectives say the men broke into three homes and then advertised them on Craigslist and provided tenants with fraudulent leases.

For more, see Police Arrest 2 Men In Foreclosed Home Scam.

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

Federal Trial Of Texas Woman Charged in Alleged Upfront Fee Foreclosure Rescue Scam Begins

In San Antonio, Texas, the San Antonio Express News reports:

• Jacquelyn Guerrero and her husband handed over their $3,000 tax refund to try to stop the impending foreclosure. Guadalupe Dominguez handed over her monthly $1,400 Social Security income and more money she borrowed. They testified Monday that they still lost their homes because of the misrepresentations of Rosario Castro Divins [aka Rosie Divins], who sent dozens of direct-mailed advertisements claiming she could stop foreclosures.

• Divins, 54, went on trial Monday before U.S. District Judge Fred Biery on seven counts of criminal contempt for allegedly disobeying four bankruptcy court orders since 2000 that barred her from claiming she could stop foreclosures. She's also charged with seven counts of mail fraud, which stem from the mailers that advertised her business, R.D. Investments, and guaranteed results. Seven families claim that rather than help save them, Divins took almost $50,000 from them, and put them deeper in the hole. All are expected to testify at the three-day trial.

For more, see Anti-foreclosure help called a scam.

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

Go here for earlier posts on this alleged foreclosure rescue scam. Loan Modification

Indictments Handed Down, Arrest Warrants Gone Out In San Diego "Land Patent" Foreclosure Rescue Scam; Add'l 12 Suspects Charged

In San Diego, California, XETV-TV Channel 6 reports:

• An indictment was unsealed Monday charging 18 people in a scam in which homeowners were falsely told that "land patents" would protect their properties from foreclosure.
  
  Six of the defendants -- Larry Smith, Maria Candida Capa, Margarita Gaviola, Jessica Refuerzo, Julita Whittingham and Edgardo Orcino -- were already charged in a criminal complaint with conspiracy to commit grand theft, grand theft and conspiracy to do a deceitful practice while acting as a mortgage foreclosure consultant.
  
  The defendants are also charged with allegation that the amount of money lost in the mortgage foreclosure scam exceeded $200,000. Smith, Capa, Gaviola, Refuerzo, Whittingham and Orcino pleaded not guilty today at their Superior Court arraignment. They will be back in court July 20 for a status conference.
  
  Arrest warrants have gone out for the remaining 12 defendants named in the indictment, said Deputy District Attorney Marlene Coyne. They face similar charges to the original six defendants, Coyne said.
  
  More than 20 alleged victims have come forward saying they lost tens of thousands of dollars in the real estate scam in 2007 and 2008. Prosecutors allege the defendants sold the bogus "land patents" to homeowners, claiming the victims could pay only 10 percent of their mortgage payment each month and could force lenders to "re-contract" the loan amounts.

Source: 18 People Charged with Scamming Foreclosure Victims.

Go here for earlier posts on this story.

Detroit Man Accused Of Using Forged Title Documents In Attempt To Steal Church

In Detroit, Michigan, the Detroit Free Press reports:

• Forget going to jail for deed fraud, what Tracy Carmichael is accused of doing could lead to an unpleasant afterlife. Carmichael, 46, of Detroit was charged Friday with trying to sell a Detroit church building that he never owned.

• Wayne County Prosecutor Kym Worthy said Carmichael used a scheme to obtain a $120,000 mortgage on the Temple of God Deliverance building in the 11000 block of Mt. Elliott. He tried to sell the property to a woman as an investment property, falsifying documents to obtain a mortgage, Worthy said. The building has been razed. Carmichael did not have authority to sell the property and forged signatures of the owner on fake title documents, Worthy said. [...] The case was investigated by the Wayne County Deed Fraud Task Force, which includes the Sheriff's Department and register of deeds.

Source: Man accused of trying to illegally sell church.

Go here, 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. TheftOfDeedMeta

Homeowners Current On Their Mortgage Payments Now The Target Of Some Loan Modification Peddlers

The competition among the peddlers of loan modification services has apparently become so fierce that some outfits aren't even waiting for the legal notices indicating mortgage loan default to be filed in the public records to identify and contact potential targets - they are simply contacting anybody with a mortgage, as reflected in this Florida story in TC Palm:

• [S]eacoast National Bank executives became concerned when some of their mortgage customers received a letter from an Ohio attorney a few weeks ago claiming they were more than 90 days behind in their payments. The letter went on to say, “If you do not act immediately Seacoast National Bank may file a lawsuit to take your home.” The borrowers who contacted Seacoast after receiving the letter knew they were not delinquent in their payments.(1)

• A Seacoast spokeswoman said the attorney and the company that sent the letter offering to help those who got it probably obtained a list of the bank’s borrowers from public records and sent out a mass mailing. They were hoping to ensnare some of the bank’s delinquent borrowers before other competitors, who normally wait for foreclosures to be publicly filed, could reach them.

***

• W.D. “Chic” Acosta, executive vice president of Seacoast’s Mortgage Lending Division, said he was concerned by the use of scare tactics to make borrowers believe they may be in jeopardy of losing their home.

The story also reports that one homeowner current on her house payments actually received a phone call with a recorded message from someone saying they had been informed she was more than 90 days behind in her mortgage payments.

For more, see Treasure Coast homeowners warned against home rescue fraud.

(1) Reportedly, the letter goes on to exclaim in bold letters: “Beware of mortgage rescue scams! Only licensed attorneys can represent you!” The Ohio attorney is not licensed to practice in Florida, according to the story, and a Florida Bar spokeswoman reportedly confirmed an investigation of the attorney is ongoing. The Seacoast spokeswoman said the attorney and the company were reported to local, state and federal law enforcement authorities.

Private Mortgage Insurance A Source Of Help For Financially Strapped Homeowners?

The Wall Street Journal reports:

• Homeowners in trouble may find help from an unlikely source: their private mortgage insurance company. [...] Homeowners who've tried unsuccessfully to get help, may have one more opportunity to get back on their feet by turning to their private mortgage insurer. Private mortgage insurance (not to be confused with homeowners insurance) is required of anyone who buys a home with less than a 20% down payment. These policies protect the lender in the event of a default, covering anywhere between 12% and 35% of their losses on the property, says Keith Gumbinger, vice president at mortgage information firm HSH Associates.

For more, see Mortgage Insurers to the Rescue?

Florida Supreme Court Mortgage Foreclosure Task Force Seeks Public Input

In Tallahassee, Florida, The Miami Herald reports:

• A Florida Supreme Court task force wants to know what borrowers, mortgage holders and lawyers have to say about their experiences in the foreclosure process. They can comment on the State Courts System Web site, court officials said Friday. Chief Justice Peggy Quince created the Task Force on Residential Mortgage Foreclosure to recommend changes and improve the legal process in response to Florida's foreclosure crisis. It has swamped the courts with such cases. The panel's final report is due by Aug. 15.

Source: Fla. Supreme Court seeking foreclosure comments.

Please click on the appropriate link below to take a survey regarding your experience.

• Please click here to take the Mortgage Foreclosure Survey for Florida Borrowers,
• Please click here to take the Mortgage Foreclosure Survey for Mortgage Holders/Lenders,
• Please click here to take the Mortgage Foreclosure Survey for attorneys,
• Presione el enlace para contestar la Encuesta de Ejecuciones Hipotecarias para Prestatarios Hispanos/Mortgage Foreclosure Survey for Hispanic Borrowers in Florida,
• Klike silvouplè sou liy anba a ki souliye pou ka pran enkèt la pou moun yo k’ap prete: Mortgage Foreclosure Survey for Haitian Creole Borrowers in Florida.

Go here for a Summary of Current Administrative Court Orders regarding residential mortgage foreclosure mediation in the various Florida trial courts throughout the state.

Philadelphia Residential Mortgage Foreclosure Diversion Pilot Program Celebrates One-Year Anniversary

In Philadelphia, Pennsylvania, the Philadelphia Business Journal reports:

• State Rep. Michael McGeehan watched in amazement last Thursday as a group of lawyers, housing counselors, homeowners and court personnel whirred around City Hall Courtroom 676 as part of the city’s foreclosure conciliation conference program. “It’s like organized chaos,” said McGeehan, a Philadelphia Democrat who is sponsoring legislation to make foreclosure prevention programs like the one he was witnessing mandatory in all 67 Pennsylvania counties. “It’s amazing how this room virtually cleared out after the big crowd they started with this morning,” he said.

• Philadelphia Common Pleas Judge Annette M. Rizzo would like to think the foreclosure prevention program she runs has become more organized and produced less chaos as it celebrates its one-year anniversary today. According to the city’s Office of Housing and Community Development, roughly 1,200 homes have been saved from sheriff sale through the program out of 3,380 homeowners who have accessed it. The pilot program serves as a model for other jurisdictions around the country. Rizzo just led a delegation to New York, where they met with Mayor Michael Bloomberg to brief him on the program’s particulars.

For more, see Tally: 1 year old, 1,200 homes saved.

California 90-Day Foreclosure "Moratorium" Begins Today

The Sacramento Bee reports:

• Lots of questions this morning on the real meaning of California's new 90-day foreclosure moratorium beginning today - which got plenty of attention on national TV yesterday. Here is a link to the California Department of Corporations site and on the official regulations that spell out the program in detail. A Bee story Saturday explaining the moratorium is here. What's most important to remember: this does NOT stop foreclosures effective today. It begins a process in which lenders must apply to the state for an exemption from the 90-day moratorium. Lenders must show the state they have an aggressive loan modification program in place to receive the exemption.

For more, see Today's start to California's 90-day foreclosure moratorium.

Nevada AG Announces Indictment Of Two Charged With Theft In Connection With Alleged Loan Modification Scam

From the Office of the Nevada Attorney General:

• Nevada Attorney General Catherine Cortez Masto announced [Friday] the indictments of William Vargas and Michael Sinclair, on one (1) felony count of Theft of a Person 60 Years or Older and four (4) felony counts of Theft by Material Misrepresentation, for allegedly operating a foreclosure rescue scam in Las Vegas under the business name of Federal Housing Aid.

***

• The indictment alleges that Vargas and Sinclair operated Federal Housing Aid since February 2007 offering loan modification services to assist victims in avoiding foreclosure on their homes. The Defendants allegedly charged the victims between $899 to $1500 in upfront fees and offered a 100% money back guaranty, claiming their company would refund the money if the foreclosure could not be stopped. [...] After paying for services, it is alleged that the Defendants failed to provide the services paid for and failed to provide refunds as promised in their advertisements.

***

• Collection of fees upfront for services promised for loan modification is in violation of Nevada Revised Statute 645D.400, which makes it unlawful for a mortgage consultant to collect or receive any compensation until after the consultant has fully performed the consulting services that was contracted to perform or represented that would be performed.

For thr entire press release, see Attorney General Announces Indictments In Foreclosure Rescue Scam Case.

Massachusetts AG Obtains Temporary Restraining Orders Against Two Firms For Allegedly Soliciting Illegal Upfront Fees For Loan Modification Services

In Boston, Massachusetts, Legal Newsline reports:

• Attorney General Martha Coakley has obtained temporary restraining orders against a Wyoming and Florida company, and a Florida man for soliciting unlawful fees from homeowners facing foreclosure.The defendants, H.O.P.E. Alliance, Inc., (H.O.P.E. Alliance) Law & Associates, LLC and Thomas E. Law, II, allegedly solicited unlawful advance fees for foreclosure-related services, and unnecessarily delayed negotiations regarding loan modifications.

• The complaint also alleges that H.O.P.E. Alliance, with the help of the co-defendants sent letters that directed them to a toll-free number and to the Web site www.helpnowalliance.org, which fraudulently claimed that the company was a non-profit and H.O.P.E. Alliance deceptively used a similar name to the government-sponsored non-profit organization, HOPE NOW Alliance.(1)

For more, see Coakley gets temporary restraining orders over fraudulent foreclosure-related services.

For the Massachusetts Attorney General's press release, see AG Obtains Temporary Restraining Order Against WY and FL Companies and FL Man for Soliciting Unlawful Fees From Homeowners Facing Foreclosure.

For a follow-up press release from the Massachusetts AG, see AG Obtains Preliminary Injunction Against Wyoming and Florida Companies and Florida man for Soliciting Unlawful Fees From Homeowners Facing Foreclosure.

(1) According to the Massachusetts Attorney General, the website also states that H.O.P.E. Alliance is a 501(c)(3) non-profit organization. H.O.P.E. Alliance is not registered with the IRS or the Attorney General’s Office as a non-profit.

Minnesota Couple Sentenced In Mortgage Scam Involving Recording Phony Lien Satisfaction Before Selling Home, Pocketing Entire Sale Proceeds

From the Office of the U.S. Attorney (Minnesota):

• An Oak Grove couple was sentenced yesterday in federal court in connection with a scheme to defraud several mortgage lending companies and to obtain money from them by means of false and fraudulent pretenses. [...] According to their respective plea agreements, both [Robert G.] Bock [10 months of confinement in a half-way house and three years of supervised release] and [Michelle M.] Niska [36 months in prison and three years of supervised release] admitted that they devised a scheme to defraud certain mortgage lenders.

The allegations are as follows:

1. On Sept. 21, 2005, the couple borrowed $593,740 from Bravo Credit Corp., and granted Bravo a mortgage on their jointly-owned Oak Grove home.
2. On April 7, 2006, Niska filed a document with the Anoka County Recorder’s Office purporting to be a satisfaction of the mortgage the defendants had granted to Bravo, even though the defendants had not paid off the loan and even though most of the principal balance was still due.
3. On May 5, 2006, the couple sold the home to a third party for $675,000, $540,000 of which was financed by Equifirst Corp.
4. Bock and Niska each admitted that they knew the title company that closed the home’s sale should have used the third-party buyer’s loan proceeds to pay off the Bravo loan, but instead allowed the title company to believe that the Bravo loan had been repaid, as reflected by the false mortgage satisfaction document.

The press release continues:

• As a result of the scheme, the defendants pocketed proceeds from the sale in the amount of $510,000, all of which should have been paid to Bravo. Bock and Niska each admitted that the scheme was executed, in part, by sending certain items by commercial carrier, specifically a $35,000 lulling payment sent to Bravo on May 8, 2006, for the specific purpose of forestalling foreclosure efforts by Bravo and for the general purpose of executing the scheme to defraud.

For the press release, see Oak Grove couple sentenced for mail fraud. TheftOfDeedMeta

ATIF Refuses To Issue Title Insurance On Controversial Short Sale Deals Involving Simultaneous Investor "Flips"

In Tampa, Florida, The Tampa Tribune reports:

• It may now be a bit tougher for investors to flip short sales for big profits. Attorneys' Title Insurance Fund(1) notified its 6,000 member attorneys [last] week that it will not insure deals made with a popular – but controversial – method for closing flips of short sales.

***

• In a letter to attorneys, the fund said it has become aware of short sale programs advertised on the Internet that promise to make investors lots of money with little or no work. The programs, the letter says, involve investors entering into option contracts with homeowners for "the exclusive right to purchase their property for a period of time."

• The investor negotiates a short sale with the lender by convincing the lender that the price it is offering is the market value of the property. The investor then finds a buyer for a much higher price. The sales happen simultaneously, and the investor pockets the difference.

• The problem is that "the original lender is not told that the buyer is flipping the property on the same day for thousands more than the lender has been told is the market value of the property," the letter states. [...] Critics say lenders are misled and don't realize they could be selling the home for more money. [...] Some attorneys have raised concerns that sellers could have to pay the difference later.(2)

For more, see Title insurance group's move could stymie short sale flips (Attorneys' Title Insurance Fund notified its 6,000 member attorneys this week that it will not insure deals made with a popular – but controversial – method for closing flips of short sales).

(1) The Orlando-based fund is a major underwriter for attorneys who write title insurance in Florida.

(2) If the simultaneous transactions are consummated as part of one closing (as opposed to two separate closings occurring back-to-back, using different closing agents - usually carried out in two separate conference rooms at the same location), the closing agent, as a fiduciary for the lender agreeing to the short sale (as well as to all other parties to the transaction), could also find itself having to pay the difference if the lender can establish that:

• it was defrauded in this type of transaction and,
• the closing agent either knew or should have known what was going on. title insurance legal issues

South Carolina Motel Not Immune From Foreclosure Stripping As $95K In Equipment Found Missing

In Sumpter, South Carolina, WIS-TV Channel 10 reports:

• A foreclosed motel in Sumter County was stripped of $95,000 worth of big-ticket items. The investigation is now going to attorneys. Over a month's time, authorities say someone stole 50 air conditioner units, 94 televisions, a commercial washing machine and a satellite system from the America's Inn in the 7400 block of Myrtle Beach Highway. Sumter County deputies say it's a civil matter because the inn is in foreclosure.

Source: $95k in furniture stolen from Sumter inn.

Go here for other posts on foreclosure stripping. foreclosure fixture stripping apple

Brooklyn Daily Eagle On Local Trial Judge

In Brooklyn, New York, the Brooklyn Daily Eagle recently ran a profile on trial judge Arthur M. Schack of the Kings County Supreme Court, who has been noted for his stiff stance on lenders and their lawyers using sloppy paperwork when attempting to make their cases in foreclosure actions. For the story, see Fighting in the Courthouse Trenches, Justice Schack Presides With Humor and Poise.

Go here for other posts referencing Justice Arthur M. Schack.

Massachusetts Closing Attorney To Pay $115K In Restitution, Penalties For Participating In Alleged Equity Stripping & Mortgage Fraud Schemes

From the Office of the Massachusetts Attorney General:

• Attorney General Martha Coakley’s Office has entered into a judgment with Brockton attorney Valerie Hanserd resolving allegations over her role as a closing attorney in two companion lawsuits that both allege unfair practices with respect to mortgage brokering services. [...] Under the terms of the Consent Judgment, [...] Hanserd must refrain from acting as a real estate closing attorney or title agent for seven years retroactive to April 27, 2007. In addition, Hanserd must pay $80,000 in restitution to victims of foreclosure rescue schemes or to address the negative impact of mortgage foreclosures in the Commonwealth, as well as $35,000 in fees and penalties to the Commonwealth.

***

• [One lawsuit] alleges that Hanserd and 18 other defendants participated in a foreclosure rescue scheme targeted at distressed homeowners facing foreclosure. Each of the defendants allegedly conspired through their respective roles as mortgage brokers, real estate brokers, closing attorneys and straw buyers to deceive homeowners into selling their homes under the false promise of avoiding foreclosure and maintaining their homes and their homes’ equity.

• The defendants not only obtained title to the homeowners’ residences but also stripped most of the homes’ equity by distributing sale proceeds to pay for unearned brokers’ fees and other fictitious services, and drafted and submitted to lenders HUD Settlement Statements that did not accurately reflect the disbursements made in the transactions. In certain cases, the defendants resold the homes in multiple transactions amongst themselves, thereby stripping the homes of all their equity.

For the entire press release, see Attorney General Martha Coakley Obtains Judgment Against Brockton Attorney for Her Alleged Role in Mortgage Fraud and a Foreclosure Rescue Scheme.

San Bernardino DA Convicts Two Accused Of Using Stolen IDs To Fraudulently Pocket Loan Proceeds Secured By Unwitting Victims' Real Estate

In San Bernardino, California, the Office of the San Bernardino County District Attorney recently announced that John Foster and Howard Edwards were found guilty after a jury trial of 56 counts ranging from forgery, grand theft, filing of false instruments, identity theft, conspiracy, and money laundering in a scam where they allegedly swiped personal information from unwitting victims and used to obtain loans on luxury cars and real estate in Fontana. The two defendants pocketed the loan proceeds while leaving the victims liable for these loans.

As part of the scam operation, the defendants falsified several real estate deeds and forged the signatures and stamps of several notary publics, and subsequently recorded in the county records office. In one case, the defendants sold a house out from under the rightful owners, pocketing $560,000. The rightful owners had been living at the residence since 1971, free and clear of any liens, and only found out about the scam when a lending institution attempted to foreclose on the property.

For the San Bernardino Conty DA's press release, see Guilty Verdicts in Real Estate Fraud Case.

Go here, 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. TheftOfDeedMeta

Five Big City Mayors Urge States To Pass Philadelphia-Based Mediation Model To Stem Foreclosures

Reuters reports:

• Mayors from five U.S. cities called on Thursday for states to pass laws that would require mortgage lenders to negotiate with borrowers who are threatened with foreclosure. The mayors of New York City, Los Angeles, Miami, St. Louis and Oakland, California, said mandatory mediation offers the best hope of stemming a national foreclosure crisis that led to an 18 percent surge in foreclosure filings in May compared with a year earlier.

• The mayors aim to follow up on a year-old program in Philadelphia that brings lenders and borrowers together under court supervision, and has allowed more than 70 percent of participating homeowners to remain in their homes.

For more, see US mayors urge states to require mortgage mediation.

In a related story, WNYC 93.9 FM reports that New York City Mayor Mike Bloomberg offered this gem as a way to accelerate the number of successful loan modifications between lenders and homeowners facing foreclosure:

• "Maybe you lock them in a room with a big pot of coffee and no bathroom and that will get them to pretty quickly come to an agreement. That's the only way you're going to get people to agree."

Source: Mayor Backs Foreclosure Mediation Bill.

Ohio Loan Review Specialist Uncovers Florida Straw Buyer Mortgage Fraud; Nine Charged

In Alachua County, Florida, The Gainseville Sun reports:

• A loan review specialist in Ohio uncovered a $2.4 million Florida mortgage fraud conspiracy allegedly led by a Marion County man with ties to Alachua County and four other Florida counties.(1) Nine people have been charged and each faces up to 60 years in prison if convicted. The Florida Department of Law Enforcement ["FDLE"] and Office of Statewide Prosecution announced the arrests on Tuesday afternoon.

• Investigators said 17 homes in Marion County are still standing empty as a result of a complex scheme controlled by alleged ringleader William H. King, 52, of Silver Springs, and his ex-wife, Beverly Ann King, 52, of Jacksonville. The Kings and seven others were each charged with criminal racketeering and conspiracy to commit racketeering, also known as RICO.(2)

For more, see Nine charged with being part of $2.4 million mortgage fraud ring (The group was charged in connection with 17 mortgage loans).

(1) According to the story, the situation was uncovered in February 2007 when the loan review specialist in Ohio recognized red flags in paperwork that crossed his desk. For example, the man noted that one couple obtained five mortgages from five different lenders in four days. The man alerted FDLE and an investigation was launched into the Kings' transactions between 2004 and 2006.

(2) According to an FDLE assistant special agent, like any organization, a mortgage fraud ring requires "a lot of people to get the job done - mortgage brokers, notary publics, people working in a title company, people who are appraisers. It takes all of these people to get a loan through. And what these people did was work together to deceive the mortgage lenders."

County Clerk, Legal Services Firm Join To Provide Worksops To Help Foreclosure Scam Victims

In Atlantic County, New Jersey, WMGM-TV Channel 40 reports:

• With the current recession climate, as more homeowners fall prey to the foreclosure crisis, scam artists are working even harder to find new victims. But in Atlantic County, the clerk's office is doing its part to fight foreclosure scams and help its victims. Atlantic County Clerk, Ed McGettigan, announced today his office will be teaming up with South Jersey Legal Services Inc. in sponsoring community workshops that will give prospective scam victims direct, personal attention and information.(1) The first workshop is open to the public and is scheduled for June 17th in Mays Landing. For more information and to register, you can contact the Atlantic County Clerk's Office at (609) 625-4011 ext. 5390.

Source: Atl. Co. Clerk's Office Helping foreclosure Scam Victims.

(1) According to McGettigan, his office has already been sending out information to borrowers who are facing possible foreclosure action to protect them from scammers. "As soon as a lender files a lis pendens against a borrower's property indicating loan default we notify the homeowner and send current information about how to get help and what to do."

Foreclosed Homeowner Accused Of Booby-Trapping Former House Skips Arraignment, Heads For Parts Unknown; Bond Revoked

In Riverside, California, The Desert Sun reports:

• A Riverside man accused of planting fake explosive devices around a property he owned but lost in foreclosure(1) failed to make a scheduled court appearance today, prompting a judge to issue an arrest warrant. Daniel Gherman, 41, faces one felony count each of assembling a booby trap, planting a facsimile bomb and burglary for allegedly hiding dangerous-looking devices outside a [his former] home [...]. Gherman was slated to appear for arraignment [Wednesday] afternoon [...]. However, the defendant was a no-show, prompting [the judge] to revoke Gherman's current bail bond and issue a bench warrant for his arrest, a court clerk said. [...] Gherman was [originally] arrested the night of May 12. He was freed on $42,000 bail the following day, according to jail records.

For the story, see Man accused of planting booby trap in foreclosed home a court no-show.

(1) According to the story, a real estate agent working for the foreclosing bank was checking the property when he spotted what appeared to be bombs and immediately contacted police, authorities said. Members of the Riverside Police Department's Hazardous Devices Team cordoned off the area, evacuating nearby homes, while technicians determined whether the devices posed a threat. Technicians used a remote-controlled, armor-plated robot to disable several suspicious objects and detonated others. The operation ran well into the night and resumed the following day, until authorities were satisfied the property was safe. An FBI agent joined the investigation, but no federal charges have been filed. DeputyEvictionTheta

Arizona Crackdown On Foreclosure Stripping Continues As Homeowner Indicted On Charges Of Defrauding A Secure Creditor, Criminal Damage

In Surprise, Arizona, The Arizona Republic reports:

• A Surprise resident suspected of stripping his foreclosed home of fixtures and other equipment was arrested Tuesday for a common crime that has been ignored too long, Surprise officials said. In late February, a neighbor called police to report that Roberto Javier Garcia, 34, was removing fixtures from his home [...] said Sgt. Mark Ortega, a Surprise police spokesman. [...] Due to the complicated nature of foreclosure-related crimes, police were unable to [immediately] arrest him, Ortega said.

***

• In the months before the arrest, detectives tracked the status of the home in the hopes they could pursue criminal charges against Garcia. Investigators later submitted the case to the Maricopa County Attorney's Office. A grand jury indicted Garcia on charges of criminal damage and defrauding a secure creditor, giving police probable cause to arrest the former Surprise resident [...] on Tuesday.(1)

For the story, see Police: Surprise man stripped his foreclosed home.

Go here for other posts on foreclosure fixture stripping.

(1) According to the story, Surprise city manager Randy Oliver noted that the arrest was an attempt to deter those who believe stripping a foreclosed home is a civil offense. "We made the decision to pursue this because we want people to stop," Surprise Police Chief Dan Hughes said. "Too many people think that this (type of offense) is civil. It's not. It's a crime." foreclosure fixture stripping apple

Foreclosed Homes Easy Targets For Owners, Others For Fixture Stripping, Sabotage

In Naperville, Illinois, the Naperville Sun reports:

• [F]rom missing air conditioning units to kitchen cabinets denuded of their hardware, from bannisters coated with fecal matter to that huge hole in the living room wall where the fireplace used to be, legions of homeowners are venting their anger on financial institutions and potential buyers by stripping their foreclosed properties of anything and everything of value.

***

• And it isn't just the foreclosed-upon who are doing the pillaging. Unscrupulous builders, contractors and citizens who learn the locations of foreclosed properties sometimes make their way inside to steal doors, lighting fixtures, cabinets and anything else that might remain there.

***

• [Inspection service company Ron] Ewald said his employees also have seen cases of sabotage instigated by disgruntled homeowners who have done everything from shutting off natural gas and water valves to "just gently loosening the fitting under a toilet or an upstairs sink."(1) Potential homebuyers "almost need three or four people to be on their toes in different parts of the house" when testing the plumbing, for example, Ewald said. That has become necessary to ensure water does not flood a room or open area because of tampering by the previous owners.

For the story, see Looks can be deceiving ...

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

(1) In another story of foreclosed homeowner sabotage, see Foreclosed home apparently booby-trapped (Bomb disposal experts are at a foreclosed home in Riverside, California that was apparently booby-trapped. Several suspicious devices were also located on the property). foreclosure fixture stripping apple

City Of Minneapolis Boards Up Foreclosed House With Ex-Homeowner Still Inside

In Minneapolis, Minnesota, the Star Tribune reports:

• On May 12, the day the city inspector came to board up his house, Ted Poetsch was eating lunch. After living all of his 53 years at 823 Penn Av. N., Poetsch had an hour left to pack his stuff and get out. Cane in hand, he lurched around, throwing a few things in bags, putting Kitty in the carrier. He heard the contractor outside starting to drill into the door frame.

• Poetsch made his way down his narrow stairway, resigned to the end he had resisted for three years, through personal financial missteps, the false promise of a foreclosure "rescue" and a court victory that gave him short-lived hope.

• He came to the door and realized that he was too late. A truck had driven away from the house, prompting those outside to think the tenants were gone. Poetsch had been boarded up inside his house.

For the rest of the story, see Minneapolis man accidentally boarded in his house (In many ways, Ted Poetsch's experience is emblematic of the forces that have fastened plywood over so much of the North Side and urban neighborhoods across America).

Go here for other posts on foreclosure & eviction screw ups. ForeclosureLockOuts

"Secret Lien" On Farm Purchase Ruins Buyers' Retirement Plans

In Dixie County, Florida, The Gainseville Sun reports the story of how the purchase of a 70-acre farm that, unbeknownst to the buyer, contained a "secret lien"(1) that was owed by the seller and that was missed by the company doing the title search, screwed up the retirement plans of the unwitting purchasers. The secret lien, coupled with the buyers' lack of understanding that their title insurance policy obtained when they bought the property requires the insurance company to defend the title against such a claim, and foot the legal bills associated with the defense, led to a 3-year ordeal that left them with lawyer expenses "way up in the six digits" incurred in defending the title to the land and a missed opportunity to develop the property during the real estate boom of a couple of years ago.(2)

For the story, see Couple's legal battle over farm finally settled (The three-year ordeal has left the Old Town couple saddled with legal fees).

For the associated Florida appellate court ruling referenced in the story, see Orix Fin. Servs. v. MacLeod, 977 So. 2d 658 (1st DCA 2008) (which ruled that the buyers' remedy for the screw up, if any, will lie against the title insurer or abstractor or against the clerk of the circuit court itself).

Go here for other posts involving legal issues related to title insurance.

(1) According to the story, the "secret lien" arose as a result of a judgment creditor’s proper recordation of a lien followed by a screw up in the county recorder's office whereby the clerk failed to properly index (ie. alphabetize) the lien on its records, which explained why the title company missed it when searching the public records for liens and other encumbrances on the property. The Dixie County Clerk of the Court ultimately agreed to pay the judgment creditor $200,000, the state's cap on suits against a government entity, on account of the screw up (although the clerk's attorney was quoted as saying that the settlement was not an admission of liability, but was in the best interests of all parties), the story reports.

(2) Unexplained in this story is why the buyers hired an attorney to defend the title to the property through litigation (and who ran up considerable fees throughout the legal process), and why the attorney failed to inform his clients at the outset that they should simply file a claim with their title insurance company. Under the standard title insurance policy in Florida and other states, the insurance company is required not only to indemnify a property owner for losses resulting from claims against title (up to the dollar amount of the policy), but to supply and pay for the legal defense against adverse title claims when they manifest themselves. title insurance legal issues

Virginia Couple Plead Guilty In Foreclosure Rescue Ponzi Scheme

In Richmond, Virginia, the Richmond Times Dispatch reports:

• A Chesterfield County couple who defrauded fellow church members and others in a Ponzi scheme pleaded guilty yesterday and agreed to repay victims more than $9.7 million. Darrell Underwood, 42, faces up to 10 years in prison and Cynthia Underwood, 41, five years when sentenced on Sept. 17. Each was found guilty of conspiracy to commit mail fraud. Darrell Underwood also pleaded guilty to engaging in unlawful transactions.

• The two owned Walkwood Properties in Midlothian, which specialized in helping homeowners about to lose their homes to foreclosure. They attracted many investors from their church, the Mount Gilead Full Gospel International Ministries.

***

• The government alleges that of the $18.4 million the Underwoods took in from April 2007 through Dec. 13, 2007, promising to invest in distressed properties, about $13.4 million was used to pay back investors while about $2 million was used in real estate deals. Some of the money was used by the Underwoods to help pay their own mortgage and to make payments on expensive cars.

For more, see Chesterfield couple plead guilty in Ponzi scheme.

Disbarred Rhode Island Attorney Cops Plea To Stealing $2.5M+ In Clients' Sale/Refinancing Proceeds Intended To Satisfy Existing Liens

In Providence, Rhode Island, ABC6 reports:

• A disbarred Cranston attorney has pleaded guilty to stealing more than $2.5 million from clients who were refinancing or buying new homes. Pasquale Scavitti III, who handled real estate transactions, pleaded guilty Tuesday to wire fraud. He admitted using for personal expenses client money that was supposed to pay off existing mortgage loans. Prosecutors say he committed 13 fraudulent transactions between 2003 and 2008, resulting in total losses of more than $2.5 million. [...] He was disbarred by the Rhode Island Supreme Court in August.

Source: Cranston Man Pleads Guilty for $2.5M Worth of Real Estate Fraud.

For the U.S. Attorney press release, see Defendant pleads guilty to Wire Fraud relating to Mortgage Fraud Scheme.

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

(1) If it hasn't already, the Rhode Island Bar Association Lawyer's Fund For Client Reimbursement may be footing the bill for some of the losses in this case. For those clients screwed out of their money and property by reason of the dishonest conduct of their attorneys and seek some reimbursement in other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map. EscrowRipOffKappa

Foreclosing Lender Dodges Major Headache; Unloads 141 Repossessed Luxury Units For $24M Cash Before Recent Discovery Of Chinese Drywall In Building

In West Palm Beach, Florida, WPBF-TV Channel 25 reports on The Whitney, a newly-constructed luxury condominium that opened in 2007, but was facing foreclosure by the lender by the end of 2008, and the health problems being complained about by a couple of the condominium residents (no word on the headaches now being felt by the foreign company who plunked down big bucks in February for the remaining unsold units). In a recent letter,(1) the management company has recently informed all the residents of the likely presence of Chinese drywall in the building.

• The Whitney's property manager, Paul Wilkis, told WPBF News 25's investigative reporter Terri Parker that he was not authorized to talk about the drywall problem, but in the letter he sent to residents, he said the board is hiring an engineer to determine the presence and extent of defective Chinese drywall and whether or not it poses hazards to the property.

***

• The Whitney opened in 2007, but was facing foreclosure by the lender by the end of 2008. A Scandinavian investment firm, ABG Sundal Collier, paid $24 million in cash for 141 units in February. Many of the units were offered for rent.

For the story, see Downtown West Palm Beach Condo Has Chinese Drywall (The Whitney Sends Letter To Residents).

In a related story, see South Florida Business Journal: Whitney units sold in bulk for $24M (A Scandinavian investment company has paid $24 million in cash for 141 units of the Whitney condominium in West Palm Beach).

Go here for other posts on Chinese drywall.

(1) According to the story, the letter to all residents said an air-conditioning leak sparked an investigation that led to the discovery of "the likely presence of Chinese drywall."

Four South Florida Residents Charged With Illegally Dodging $100K+ In Real Estate Taxes Using Tax Breaks Granted To Dead Relatives

In Miami, Florida, The Miami Herald reports:

• For 18 years, Julian Grande received a special tax break for disabled homeowners from the Miami-Dade property appraiser. But Grande was more than disabled. He's been dead since 1990. Grande's daughter, Maria, is one of four people now facing criminal charges for allegedly exploiting property-tax breaks meant for relatives long dead. According to investigators with Miami-Dade's inspector general and the state attorney's office, the four people continued to file property-tax records indicating their disabled relatives were alive -- forging signatures, in some cases. Along with Maria Grande, those arrested were: Dane Taylor, 60, of Palmetto Bay; Philip Espinosa, 50, of Miami; and Telenia Piedra, 59, of Miami.

***

• Each of the four charged had relatives who legitimately qualified for the tax exemption, sparing them from paying any property taxes on their homes. But the new owners were obliged to inform the county when they died, prosecutors say. In all, the four defendants avoided more than $100,000 in taxes, Inspector General Chris Mazzella said.

For more, see 4 accused of cheating on Miami-Dade property taxes (Four people are accused of using tax breaks for their dead relatives to avoid paying property taxes on their homes).

California Lawmakers Seek To Crackdown On Foreclosing Banks Forcing Buyers Of Repossessed Homes To Use Title & Escrow Firms Picked By Lender

The underreported (and unprosecuted) scam currently being perpetrated by lenders looking to unload foreclosed homes whereby they force the buyers of those homes to use their (the lender's) title insurance and escrow companies(1) is now drawing attention from the California state legislature, as evidenced by this excerpt in a recent story reported by the Merced Sun Star:

• A bill to help California's smaller title companies compete in the foreclosure resale market has cleared the Assembly and is now in the Senate. [...] The bill's passage would be a boost to title companies that have been hard-up for business as the market has shifted from real estate agents selling new homes for developers to unloading foreclosed ones for banks. The bill, AB 957 [the Buyer’s Choice Act, go here to check bill status], would establish penalties for banks that force buyers to use a particular title and escrow company.

***

• The practice of forcing buyers to use certain title insurance companies is illegal under the federal government's Real Estate Settlement Procedures Act, though there's been little enforcement. State leaders are looking to crack down by allowing buyers to seek a fine against banks that forced them to use a particular title company.

***

• Banks would be forced to pay the buyer three times what was spent on the title and escrow services. Locally, title transaction fees can run about $1,000, though agents have seen bills double or triple that from other firms. In such instances, banks could be paying thousands back to the home buyer. [...] So far, there hasn't been any opposition to the bill. It passed the Assembly with a 77-0 vote. No title companies or lobbyists have come out against it.

For the story, see Galgiani's title bill on its way to state Senate.

Go here for other posts involving legal issues related to title insurance.

(1) Lenders holding foreclosed homes with potentially defective titles as a result of errors, irregularities, and other sloppiness in the foreclosure process (ie. lenders lacking standing to foreclose, failure to physically possess the mortgage note when foreclosing, failure to satisfy all "notice" requirements in the legal process, etc.), and who are using "friendly" title & escrow companies over whom they can possibly exert control in the title-clearing & sale-closing process (for the possible purpose of "slipping something past" an unwitting home buyer), appear to be among those that could be affected by this proposed law. title insurance legal issues

Alleged Scammer Leaves Friends Homeless; Becomes Fugitive, Forcing Federal Judge To Order Forfeiture Of Real Estate Posted To Secure Bail Bond

In Brooklyn, New York, the New York Post reports:

• A former Credit Suisse broker who became a fugitive to escape trial for fraud now has two more victims -- the friends who put their homes on the line to back his $3 million bail. Brooklyn Federal Judge Jack Weinstein angrily ordered prosecutors to seize $3 million in assets that were posted as bail for Julian Tzolov, 36, including a friend's Manhattan apartment and a Miami Beach home belonging to his girlfriend's brother. The feds launched a massive manhunt for Tzolov on May 9 after he vanished from his posh Fifth Avenue condo, where he'd been under house arrest for eight months, complete with an electronic monitoring device around his ankle.

***

• "Everything should be forfeited," Weinstein said [Monday] in reference to the friends who signed Tzolov's bail bond. "They're going to lose everything."

For more, see BROKER FUGITIVE TZOLOV LEAVES FRIENDS HOMELESS.

FTC Targets Loan Modification Outfit With Civil Contempt Action; Accuses Firm Of Ripping Off Homeowners Facing Foreclosure With Upfront Fees

From the Federal Trade Commission:

• The Federal Trade Commission has filed a civil contempt action charging a deceptive mortgage foreclosure rescue and loan modification operation with violating a 2001 court order.(1) Many homeowners paid the defendants up to $5,500 in advance and ultimately lost their homes to foreclosure. The FTC has asked the court to halt the unlawful practices, freeze the defendants’ assets, and seek compensation for victims.

• According to papers the FTC filed with the court, the defendants told consumers that they would stop foreclosures. They claimed they were “100% successful and had never lost a customer’s home to foreclosure” and advised consumers to pay them instead of making mortgage payments. They also claimed that they would negotiate modified mortgages with lower interest rates, monthly payments, and principal balances. The FTC charged that, in fact, they obtained few, if any, loan modifications for customers.

• The defendants also claimed that their selectivity in choosing customers helped them succeed, but they took on nearly every consumer willing to pay, according to the FTC. In addition, the defendants falsely claimed that they would provide experienced real estate attorneys who would represent customers nationwide, and would review consumers’ loan documents to look for fraud and other lending violations.

For the entire press release, see FTC Charges Foreclosure Prevention and Loan Modification Marketers with Contempt.

Go here for the FTC's Temporary Restraining Order With Asset Freeze, Appointment of a Temporary Receiver and Other Equitable Relief.

Go here for links to other court documents available in connection with this case.

(1) According to the FTC, Bryan D’Antonio and three companies he controls, The Rodis Law Group Inc., America’s Law Group Inc., and The Financial Group Inc., doing business as Tax Relief ASAP, violated a 2001 order that banned D’Antonio from telemarketing and misrepresenting material facts about goods or services. The FTC obtained the order against D’Antonio and his former company, Data Medical Capital Inc., for operating a work-at-home medical billing opportunity scheme. D’Antonio pleaded guilty to mail fraud for his involvement in the scam and served almost three years in prison.

Nevada Lawsuit Alleges Lender Used Deceptive & Unfair Practices, Lacked Good Faith When Making Unsustainable Home Loans; Seeks Class Action Status

In Las Vegas, Nevada, KLAS-TV Channel 8 reports:

• The foreclosure crisis is far from over in southern Nevada. Now a group of homeowners are fighting back against one lender. They've filed a class action lawsuit to stop foreclosures and to get restitution for those who've already lost their homes. They are going after California's Indymac, one of the first banks to fail during the meltdown.

• The lawsuit claims the lender did not deal in good faith with their borrowers and used deceptive and unfair practices. "They focused in on minority groups and attempted to sell them on loans that they knew that those borrowers could never ever satisfy," said attorney Matthew Callister.(1) Callister is representing the lawsuit against Indymac, who was taken over by OneWest Bank. He says tens of thousands of valley homeowners have loans through the company and he wants to stop more from becoming victims of bad lending practices.

For more, see Las Vegas Attorney Files Class Action Against Home Lender.

For other posts on homeowners using state & federal consumer protection laws to stave off foreclosures, Go Here, Go Here, and Go Here.

(1) Last year, the Massachusetts Supreme Judicial Court ruled that the making of subprime loans that lenders either knew or should have known were unsustainable constituted unfair and deceptive business practices in violation of the applicable state consumer protection statute (M.G.L. c. 93A, §2). See:

• The National Law Journal: Mass. High Court Upholds Order Restricting Subprime Lender From Foreclosing,
• Court ruling: Commonwealth of Massachusetts v. Fremont Investment & Loan, 452 Mass. 733; 897 N.E.2d 548; 2008 Mass. LEXIS 797 (Ma. 2008) (for a possibly easier to read version, try here). UndoMortgageLoans TILAdelta

California Woman Loses Home To Foreclosure After Miscommunication Involving One Payment On Loan Modification Agreement

In Simi Valley, California, the Ventura County Star reports on a local homeowner who lost her home to foreclosure after a screw-up in the handling of one payment made on a loan modification agreement:

• [F]or [Josie] Lowe, the [foreclosure] sale came as an unexpected blow after more than a year of trying to work out a loan modification with her bank. At one point, she was given a payment plan to help her catch up with payments she had missed during a tough period while her mother was ill. She made payments regularly, feeling that she was upholding her end of the bargain.

***

• In all, she paid the bank, then IndyMac, more than $21,500 from April 2008 to February. She has the MoneyGram receipts to prove it in a packet full of documents from the whole ordeal. But when she called on May 11 about a returned payment, she was told her home was being foreclosed and going up for auction the next day. Lowe couldn’t believe it. “I don’t know what I’m going to do, because I thought I was doing all the right things,” she said.

For more, see Simi Valley woman says she's shocked to learn of foreclosure, auction, buyer (Caught in the cracks). ForeclosureLockOuts

Bridgeport Resident Faces Loss Of Home Due To Loan Servicer Screw Up In Failing To Remit Real Estate Taxes To City

In Bridgeport, Connecticut, the Connecticut Post reports:

• Ever since he came to this country from Haiti, Jean Castro just wanted to live the American dream. He worked as a mechanic in Stamford before finally saving enough money to buy a house here for himself, his wife and three children. Now, three years later, the city is foreclosing on the single-family home [...] because Castro owes $51.69 in back taxes.

• "It's unbelievable," said the 49-year-old Castro as he stood beneath the large grape arbor alongside his home. "I pay my mortgage every month, I do everything I'm supposed to do and now you tell me the city is taking my home. I'm shocked."

• Last week, a Superior Court judge granted the city's foreclosure action and ordered the home to be sold in December to satisfy the back taxes as well as the $2,705 in attorneys' fees and foreclosure costs. [...] Castro maintains he didn't know his house was in foreclosure. He said he received a letter from the city stating he had back taxes and he turned the letter over to his mortgage company, which pays his taxes. "The bank said it was going to take care of the back taxes and that's the last I knew of it," he said. In fact, court records show that nearly $3,000 in back taxes were paid on the house, leaving a balance of $51.69.

For more, see Family to lose home over $50 tax bill (A Bridgeport homeowner gets served foreclosure papers because he owes).

For story follow-up, see Bridgeport claims man facing foreclosure not innocent victim. ForeclosureLockOuts