Friday, November 13, 2009

Colorado Homeowner Obtains Temporary Restraining Order Halting Foreclosure; Alleges Loan Servicers Failed To Respond To HAMP Loan Mod Applications

In Brighton, Colorado, The Denver Post reports:
  • Traci Willms turned to the federal Home Affordable Modification Program to save the childhood home in Brighton she bought from her mother and shares with her two children. But after two separate loan-modification applications with two different servicers in the past six months, she never received an answer.

  • Last week, she sued to stop the foreclosure sale of the home, arguing that the HAMP program prevented such an action. "All we want them to do is run the paperwork and do their job," Willms said. An Adams County judge issued a temporary restraining order to prevent a sale, in what could be an early test case of the new loan-modification program. "We are arguing that this foreclosure is illegal and should be stopped," said Sarah Parady, a consumer attorney with Colorado Legal Services in Denver. Mortgage servicers participating in the HAMP program agree to suspend foreclosure proceedings for borrowers whose applications are under review or who are in a trial modification period, Parady said.

  • Complicating Willms' case, GMAC Mortgage, which participates in HAMP, transferred servicing rights to her loan to MGC Mortgage of Plano, Texas, which does not, in July. Within days, the owner of the loan, LNV Corp., initiated a foreclosure. To prevent lenders from giving loans the hot-potato treatment, HAMP requires anyone accepting a loan under review for modification to treat it as if it were still under the program, Parady said.

***

  • Shannon Peer, director of housing counseling with Brothers Redevelopment, said many lenders keep the foreclosure clock ticking even as they review a modification application. Some servicers will deny a modification request right before the deadline for a foreclosure sale, he said. But in Willm's case, she never got an answer.

For the story, see Brighton homeowner in fight to stop foreclosure (Cites loan-modification delays).

California State Bar Task Force Hammers Five More Attorneys In Continuing Probe Into Alleged Loan Modification Misconduct

In San Francisco, California, The National Law Journal reports:
  • The State Bar of California's crackdown on attorneys for alleged loan modification misconduct has claimed five more lawyers in Southern California, three of whom have resigned.

***

  • On Nov. 2, Timothy Thurman of Trinity Law Group in Los Angeles resigned with charges pending after the FBI arrested him in October. He was charged with forging the signature of a federal judge on a fake court order that he gave to his clients so that they could avoid eviction. His law firm, launched earlier this year, provided litigation and loan modification services. [...] On Nov. 4, two other lawyers resigned with unspecified charges pending: Gary Davidson of Costa Mesa, Calif., and Eric Douglas Johnson of Culver City, Calif. Davidson did not return a call for comment, and a phone number to Johnson's law office is no longer in service.

  • Also on Nov. 4, Paul Lucas of Lucas Law Center in Aliso Viejo, Calif., was put on involuntary inactive status for allegedly becoming a threat to the public. Among the accusations are that he lied about his firm's refund policy and its relationship with Future Financial Services, which he has described as the marketing arm of his law office.

***

  • On [Nov. 6], Sean Rutledge of United Law Group in Irvine, Calif., was placed on inactive status for taking money from his clients, not performing services and failing to refund fees in 14 client matters.

For more, see Calif. Bar Crackdown on Loan Modification Misconduct Claims 5 More Attorneys.

See also, The State Bar of California news release: State Bar Loan Modification Task Force Shuts Down Practices Of More Lawyers.

Financial Turmoil, Uncertainty Hovering Over Arizona Senior Independent Living & Retirement Community Forces Elderly To Flee Homes

In Green Valley, Arizona, the Green Valley News & Sun reports:
  • The beautiful but nearly empty Retreat at Santa Rita Springs retirement village is facing financial hard times and it is up to the mortgage holder as to whether it continues operating. [...] Meanwhile, many of the dozen elderly residents still there are making arrangements to move after hearing of financial turmoil and seeing their beloved staff fired last Friday on two hours’ notice.

***

  • The turmoil has been devastating for residents and former staff. “It’s all very confusing, isn’t it?” said Georgia Ryder, who has lived in Green Valley on and off since 1980. “Since Friday we didn’t know anything. I cried for two days. I’m going to miss all my friends like crazy. I’ve been here (in Green Valley) 30 years.” Ryder has found a place to live in Tucson and other residents are doing the same because they cannot take the uncertainty. "Watermark [the former management company] left the food here that they bought, so we have food until Friday,” Ryder said, underscoring the worries residents have. [Former executive director Debbie] Engen said, “It’s hard, it really is. Between staff and residents, you get very close. It’s like a family. We brought stuff from home and did whatever we could to make a go of it with no funds.”

For the story, see Retirement apartments in financial bind.

Elderly Couple Accuse Grandson Of Pocketing Mortgage Proceeds On Family Home After Duping Them Into Unwittingly Signing Over Title; Now Face F'closure

In St. Paul, Minnesota, Fox News TV Channel 9 reports:
  • [Stella] Hernandez is not embarrassed to admit she’s 81 years old. Her husband Joseph is 91. He is a decorated WWII veteran, and she was a real life “Rosie the Riveter” working on B-24 bombers at St. Paul’s Holman field. For the past 40 years they’ve lived on Dayton Avenue in the shadows of the St. Paul Cathedral. But now a family dispute means they may face foreclosure.

  • Six years ago, the Hernandez’s claim they were tricked into signing a qui[t] claim deed on the house giving ownership to their grandson. Afterwards they claim he allegedly took out loans on the home’s equity and didn’t repay them. What he did with the money they don’t know because they haven’t been able to talk to him. “I don’t know,” said Mrs. Hernandez. "I don’t know anything about his whereabouts or anything.”

***

For the story, see Elderly Couple Fighting Foreclosure in St. Paul. FinancialAbuseOfElderlyAlpha DeedContraTheft

Georgia Man Accused Of Getting His Dementia-Stricken Grandmother To Sign Over Title To Property

In Moultrie, Georgia, The Moultrie Observer reports:
  • A Moultrie man was apprehended Monday after he allegedly took advantage of his grandmother’s illness. Daniel Lee Baker, 25, [...] was charged with two counts of crimes against the elderly and probation violation. Colquitt County Sheriff’s Investigator Sgt. Jason Thompson said Baker allegedly had his grandmother’s property signed over to him. In addition to the property, his grandmother, who suffers from dementia, allegedly also gave Baker the power of attorney over her affairs. Additional changes against Baker were pending additional information into the allegations, Thompson said.

Source: Man accused of crimes against grandmother. FinancialAbuseOfElderlyAlpha DeedContraTheft

Thursday, November 12, 2009

NYC Man Accused Of Using Forged Documents In Attempt To Swipe $128K From Foreclosed Homeowner In Alleged "Surplus Scam"

From the Office of the Queens County District Attorney:
  • Queens District Attorney Richard A. Brown [...] announced that a Flushing man has been charged with second-degree attempted grand larceny, second-degree criminal possession of a forged instrument and other charges for allegedly forging the signature of a man whose home had been foreclosed on in an effort to collect the surplus that resulted from a sale of the house.(1) District Attorney Brown said, “The defendant is accused of trying to steal a large amount of money owed to the victim in this case – and then challenging the victim in court when the scheme was uncovered. [...].”

***

  • District Attorney Brown said that, according to the charges, the complainant, Leonard Lum, was the owner of a property [...] in Corona, Queens, which was foreclosed upon on March 21, 2003. As a result of the foreclosure, there was a surplus of $128,044 owed to him as proceeds from the sale of his property through foreclosure action. The District Attorney said that, on December 17, 2008, the complainant filed an action [...] to collect the surplus.(2)

  • On February 9, 2009, however, the defendant Harry Coumnas, of H.C. Sonic, Inc., allegedly filed a petition with the court in opposition of the complainant’s action, claiming that the complainant had assigned rights to the defendant to collect the $128,044 surplus in exchange for a payment of $25,000. The District Attorney further said that the defendant allegedly hired an attorney to file papers in an effort to collect the surplus, which included filing documents bearing the forged signatures of Leonard Lum and his wife, Betty Lum, purportedly assigning the surplus of $128,044 to the defendant in exchange for $25,000. According to the criminal complaint, the complainant never assigned the right to the surplus to the defendant and did not receive the sum of $25,000 from the defendant.

For the entire Queens DA press release, see Flushing Man Charged With Filing Fraudulent Court Papers To Collect Foreclosure Surplus (Allegedly Forged Victim’s Signature In Bid To Collect $128,000).

(1) The District Attorney identified the defendant as Harry Coumnas, 50, of 25-25 126th Street in Flushing. The defendant is charged with second-degree attempted grand larceny, second-degree criminal possession of a forged instrument, first-degree falsifying business records and first-degree offering a false instrument for filing.

(2) Assuming the absence of typographical errors in the DA's press release, it appears that the $128K foreclosure surplus was sitting in the court registry for well over five years before the foreclosed homeowner "woke up" and attempted to retrieve his funds (March 21, 2003 to December 17, 2008). For all anyone knows, he (like most people who lose their homes to foreclosure) may not have been aware that he's entitled to money from the foreclosure sale of his home to the extent the sale price exceeds the debt owed to the foreclosing lender (subject to the claims of any intervening lienholders), and may only have become aware of his right to the cash after having his suspicions aroused by one of the many "foreclosure surplus chasers" who make their living ripping off foreclosed homeowners unaware of their rights to the sale overage.

Texas AG Moves To Recover Upfront Fees From Alleged Foreclosure Rescue Racket That Targeted Financially Strapped Homeowners

From the Office of the Texas Attorney General:
  • Texas Attorney General Greg Abbott [...] took legal action to obtain restitution for a fraudulent “mortgage rescue” firm’s victims. Dallas County 134th District Judge James M. Stanton granted an agreed temporary injunction barring Markus and Tyrone Bailey from deceptively operating the unlicensed businesses, Behind on Mortgage and Behind on Mortgages USA [...] in Dallas. The agreement requires the defendants to either reimburse all customers from whom it collected unlawful fees, or place these monies in a trust pending final judgment.

***

  • The defendants visited homeowners facing foreclosure and pitched a way for them to obtain new loans, renewals, extensions of time to pay and modifications of existing mortgage loans. In return, the defendants required at least $1,000 in advance from homeowners and demanded they have no contact with – or make future payments to – their original mortgage servicers.The defendants retained homeowners’ fees for services and provided no measurable foreclosure relief, nor did they negotiate with mortgage servicers. Thus, many homeowners who dealt with the defendants ultimately lost their homes to foreclosure action.

For the entire Texas AG press release, see Attorney General Abbott Takes Enforcement Action Against Dallas-area ‘Mortgage Rescue’ Operation (‘Behind on Mortgage’ defendants bilked unwitting homeowners).

Go here for the Texas AG's temporary injunction against Behind on Mortgages.

Lender Admits Screw-Up In Foreclosure Sale Where Homeowner Completed Trial Modification & Was Led To Believe Permanent Workout Was Forthcoming

In Phoenix, Arizona, KPHO-TV Channel 5 reports:
  • Despite being up-to-date on their modified mortgage payments, an Arizona couple found that their bank was foreclosing on their home, KPHO-TV reported. "You work so hard. Put a lot of money down on your house. You pay your taxes. You pay your mortgage, and it's all stolen from you," said Jeff Zerner, the homeowner. He and his wife, Yanthy, found out about the foreclosure when the new owner posted a notice on their door Nov. 4.

***

  • Just days before, the Zerners thought their home was safe. They had finished their trial modification with Chase and were led to believe they would qualify for a permanent modification. "We paid Chase several hundred dollars, which they accepted in good faith," said Zerner. "I feel extremely ripped off."

  • Chase officials admit they made an error by selling the house. They told KPHO-TV in a statement, "We apologize for the confusion over the modification actions and the parallel foreclosure steps Chase takes as a precaution. We have reached out to Ms. Zerner to discuss where we go from here." Loan modifications and foreclosures are parallel processes. In the Zerners' case, the sides failed to communicate with each other to halt the foreclosure until it was too late.

For the story, see Bank Accidentally Sells Couple's Home (Bank Cites 'Confusion' For Error). ForeclosureLockOuts

Loan Servicer Agrees To Modify Mortgage On Texas Widow's Home In Foreclosure After Story Hits TV

In The Colony, Texas, WFAA-TV Channel 8 reports:
  • After losing her husband of 47 years, Virginia Fraser was on the verge of losing her home in the foreclosure crisis. But thanks to kindly intervention, her story has changed. Last spring, Fraser was $7,000 behind in house payments and facing foreclosure. Her deceased Vietnam veteran husband had handled the family's finances.

***

  • Her fortune began to change when attorney Richard Anderson got a call for help from a priest at Holy Cross Church. "I stopped the foreclosure in December," Anderson said. "It was set again for January and February; I got it stopped again." The mortgage holder, Wells Fargo, had just received a $25 billion bailout. Anderson said once the story got on television last spring, they agreed to help Fraser. [...] Attorney Anderson was able to deliver the news to Fraser that her house payments will go from $1,500 a month to $423.

For the story, see Widow's home saved from foreclosure in The Colony.

See also, The Colony Courier-Leader: Knights ride to rescue veteran’s widow.

Wife Of Alleged Sale Leaseback, Foreclosure Rescue Scammer Cops Plea To Clipping IRS Out Of $900K+ In Unpaid Taxes

In Minneapolis, Minnesota, the Star Tribune reports:
  • A 38-year-old Chaska woman admitted [...] to preventing the IRS from collecting more than $900,000 in employment taxes from her ex-husband's mortgage brokerage company. In pleading guilty in federal court in St. Paul, Shelley Lee Milless acknowledged that she schemed with her then-husband, Timothy Lynn Beliveau, 41, of Mound, to shield from the IRS $901,985.94 in income tax, Federal Insurance Contributions Act tax and Medicare tax collected from employees of American Alliance Mortgage Group.

***

  • Beliveau, her former husband, was indicted last month on 12 counts, including mail fraud and willful failure to account for and pay taxes. The indictment says Beliveau raised more than $1 million from real-estate investors that he then used to pay personal expenses. The government says Beliveau preyed on people facing foreclosure by promising to sell their home to investors who would let them remain in the house and repurchase it on a contract for deed while they worked to restore their credit.

For the story, see Guilty plea in $900,000 scam to cheat the IRS.

Wednesday, November 11, 2009

NYC Legal Aid Files Class Action Alleging Servicer Spuriously Denied Access To HAMP; Feds Named For Failure To Provide Appeals Process For Rejections

The Legal Aid Society in New York City announced:
  • Four homeowners from Queens and Brooklyn, who are at risk of losing their homes to foreclosure, [...] filed a federal class action lawsuit, charging that Aurora Loan Services, their mortgage servicer, has denied them access to the Obama Administration’s Home Affordable Modification Program (HAMP) for spurious reasons, and has failed to provide them with notice so they may contest such denials.(1)

  • The lawsuit, Edwards et al v. Aurora Loan Services, LLC et al filed in the United States District Court for the District of Columbia, is one of the first lawsuits to challenge a mortgage servicer for breach of contract by failing to review mortgage loans of eligible homeowners for HAMP and to provide a procedure to contest denial. As the economic crisis places record numbers of homeowners at risk of losing their homes, the lawsuit contends that the named plaintiffs have been denied their rights under the program.

***

  • The lawsuit, [...] seeks class action status and requests a preliminary and permanent injunction, preventing Aurora from engaging in all unjust and unreasonable practices. It also requests that the Court order Aurora to provide a meaningful notice of HAMP denial, the specific grounds for denial and a process to challenge such denials.(2)

For the entire press release, see Civil Practice Files Law Suit to Help Homeowners At Risk of Losing Homes to Foreclosure.

(1) The lawsuit also names federal officials including The United States Treasury and the Federal National Mortgage Association because of their failure to ensure that homeowners are afforded their full due process rights. The four homeowners are represented by The Legal Aid Society in New York City. Lawyers handling the case include Oda Friedheim, Scott Rosenberg and Judith Goldiner.

(2) A lawsuit filed in July [see Williams, et al. v. Geithner, et al.] by the Foreclosure Relief Law Project, a program of the Housing Preservation Project, alleging a failure to create an appeals process when loan servicers deny access to HAMP loan modifications was recently dismissed by a Minnesota Federal Court. See:

For an earlier post on the Minnesota suit, see Minnesota Suit Seeks To Slam Brakes On Foreclosures Until Feds Implement Better Procedures In Program Borrowers Claim Violates Due Process Rights.

Minnesota Federal Judge Dismisses Suit Seeking To Block Foreclosures Alleging Due Process Violations In HAMP Program

In Minneapolis, Minnesota, The Wall Street Journal reports:
  • Borrowers don’t have a legal entitlement to loan modifications. That was the conclusion of a federal judge who this week dismissed a lawsuit filed by Minnesota homeowners seeking to block foreclosures.(1) The decision was a setback to struggling borrowers who have turned to the courts in an effort to get help under the Obama administration’s housing rescue plan.

***

  • The lawsuit, which was filed in U.S. District Court in Minnesota and sought class action status, alleged that the Obama administration’s foreclosure prevention plan violated borrowers’ constitutional rights because homeowners who were denied help under the program weren’t given a written denial and an opportunity to appeal. The action sought to halt foreclosures on homeowners eligible for the Obama plan until the government put in place certain procedural safeguards, such as creating a formal appeals process. In a decision Monday, U.S. District Court Judge Ann Montgomery said that Congress did not make loan modifications an entitlement. In addition, the Treasury Department gave mortgage companies some discretion in evaluating borrowers for help, the decision said.(2)

For more, see Minnesota Judge Delivers Setback to Struggling Homeowners.

(1) See Williams, et al. v. Geithner, et al.: Order denying Plaintiffs' Motion for Preliminary Injunction. For more information on the Minnesota lawsuit or to read the filed documents, click here.

(2) According to the story, Mr. Ireland, an attorney with the Housing Preservation Project, said that the administration has taken several steps to improve the process since the lawsuit was filed. In October, for instance, the Treasury Department issued guidelines that require mortgage companies to provide borrowers a written notice of denial within 10 days. Earlier this month, it required that mortgage companies stop foreclosures when a borrower challenges the denial and provides specific denial information, including some of the data used to evaluate the borrower for help.

Homeowners Furious After Another Maintenance Fee Hike By Financially Struggling HOA; 50%+ Of Units Either Delinquent Or In Foreclosure

In Orange County, Florida, WOFL-TV Channel 35 reports:
  • When Tom Beard learned that the Tivoli Village homeowners association wanted to increase his fees for the second time in as many years, he organized a petition signed by residents who refused to pay the increase. "It really angers me. I'm very frustrated. I'm in the same financial situation as a lot of other people in this subdivision and my wife and I have sucked it up. We don't drive nice cars, we don't go on vacation," Beard said.
    Residents here currently pay nearly $2,500 dollars a year in homeowners fees. The increase would add another $375.

  • HOA members say they are $250,000 in the hole and can't pay their bills. Fifty percent of the units are delinquent in their fees, and another 20 percent are in foreclosure. "The reality of it is, in order for the association to support itself, the dues would have to go up, whether we still own lots in the community or not," said HOA president and developer Kyle Sanders. [...] At Tivoli Village, the developer still acts as the head of the homeowners association. He plans to approve the 15 percent increase and will place a lien on homeowner who don't pay, but residents like Beard say they're ready to fight for their rights.

For the story, see Homeowners furious over fee increase.

Protection From F'closure Eviction No Help For Renters Getting Immediate Boot From Condemned Home Repo'd By Bank; Timing Of Bldg Inspection Questioned

In Enfield, Connecticut, The Hartford Courant reports:
  • George Lombardo of Thompsonville left for work as usual Monday morning only to find a notice posted on the porch of the house he rents on Lincoln Street. The house had been condemned as "unfit for occupancy." It was condemned Thursday, Nov. 5, according to the sign posted at the entrance to both sides of the duplex and signed by housing inspector Richard Metcalf. "I don't have a home now, and I just found out this morning on my way to work," Lombardo, 49, said Monday.

***

  • He called his landlord and found out that the property had been foreclosed about two weeks ago and is now owned by the bank, leading Lombardo to question the timing of a building inspection that determined his home to be uninhabitable. But Peter Bryanton, director of community development, said that the foreclosure and the inspection are unrelated. [...] "There was enough there to say, 'This is a dangerous situation,'" Bryanton said. "If we find it's a danger, a hazard, like we did, then we've got to get [the tenants] out." He said there is no formal process for letting residents know their residence is condemned besides posting the sign. After the signs are posted, tenants are to leave immediately, negating the [...] period a resident would typically have to leave after a foreclosure.

***

  • "[The home's] been in the same shape for eight years," Lombardo said. "There were no vermin, no leaks, no structural damage. There's a tarp on the roof, but that has been there for years."

For the story, see Enfield Tenants Have To Find New Homes After Duplex Is Condemned.

Wave Of Chinese Drywall-Related Homeowners' Insurance Cancellations Begins Hitting Louisiana; Homeowner Could Face Threat Of Foreclosure, Job Loss

In New Orleans, Louisiana, The Times Picayune reports:
  • In August, Tamara Thomas filed a claim with her homeowners insurance company after discovering that her air conditioning and other appliances had failed because her three-year-old home was filled with defective drywall made in China. But before the Hanover Insurance Group even denied the claim, as most insurers have been doing with claims for Chinese drywall damage, it canceled her policy, effective Nov. 19. The Massachusetts company said there had been a "substantial change in risk" because the home was no longer occupied since Thomas and her family had begun staying in the guest room at her parents' house out of concerns over how the drywall was affecting their health.

***

  • So far, most insurance policy cancellations have been taking place in Florida. In Louisiana, insurers were universally denying claims, but it was believed that a state law making it difficult for insurers to drop coverage for homeowners who have been customers for at least three years would largely keep policies in place. But advocates for Chinese drywall victims have reported that in the past few weeks, a wave of cancellations has begun to unfold in Louisiana, even with people like Thomas, who had insurance on her home with Hanover for just over three years.(1)

  • "I'm hearing it every day now," said state Sen. Julie Quinn, R-Metairie, who has been holding town hall meetings about Chinese drywall issues. In canceling policies, insurers often cite the failure to maintain the home in insurable condition, or vacancies, Quinn said.

For more, see Insurers have begun cancelling policies on Louisiana homes with tainted drywall.

(1) Reportedly, while investigations into Chinese-manufactured drywall continue, Thomas now finds herself in a string of no-win situations. Although Thomas' skin problems, her husband's nosebleeds and her daughters' respiratory ailments have improved since they began staying at her parents' house, the insurance cancellation has caused a new set of nightmares, the story states.

When she got the cancellation letter, Thomas immediately called her mortgage lender to tell the company about the situation. Her lender suggested that she contact the bank's force-placement insurance company to get coverage so that she would remain in compliance with the terms of her loan. But the force-placement company said that it couldn't bind coverage since she has an active problem at the house and has made a claim. She has since contacted Louisiana Citizens Property Insurance Corp., the state's insurer of last resort, but an agent with Citizens has advised her that it may not be able to write a policy for the same reason.

Failure to get new coverage in place by Nov. 19 will potentially put her in violation of the terms of her mortgage and at risk of foreclosure. If her loan goes into default, Thomas also risks losing her job, because, as a financial consultant, she is required by her employer to maintain perfect credit. "I have a $270,000 home that's worth zero dollars," Thomas said. "No one's going to insure me. My house could be foreclosed upon. I'm still paying my mortgage on a house I can't live in."

Tuesday, November 10, 2009

Florida AG Says Alleged Forclosure Rescue Racket Divides Upfront Fee Into Five Payments, Each Check Associated To A Specific Step In Loan Mod Process

From the Office of the Florida Attorney General:
  • Attorney General Bill McCollum [...] announced that his office has filed a lawsuit against two Central Florida companies and their owner over allegations they charged up-front fees for foreclosure rescue-related services. National Payment Modification Company and The Bostonian Group, LLC, which conducts business under the name People’s First, allegedly charge up to $2,500 in up-front fees to homeowners trying to rescue their homes from foreclosure.(1)

***

  • An investigation conducted by members of the Attorney General’s Economic Crimes Division, working as part of the Attorney General’s Mortgage Fraud Task Force, determined that both companies charge the up-front fee and divide it into five equal payments secured by post dated checks. Each check, according to the lawsuit, is associated with a separate “sub-contract” or step in the loan modification process. Consumers complained that both companies cash the post-dated checks even though the companies have not begun negotiations or even contacted the consumers’ lenders.

For the entire press release, see McCollum Files Lawsuit Against Central Florida Companies for Loan Modification Scams.

(1) Also named in the lawsuit is William Rodriguez, the owner of both companies, who was a founding owner of Wineberg, Lopez, & Rodriguez Company. The Attorney General’s Office sued Wineberg, Lopez, & Rodriguez Company in March and obtained an emergency injunction barring the company from charging homeowners any fee in advance for providing foreclosure-related rescue services. That case is still pending in Orange County Circuit Court.

Federal Appeals Court Reinstates Homebuyers' Class Action Suit Alleging PMI Kickback Racket Between Countrywide & Reinsurance Company

A Federal appellate court recently reinstated a homebuyers' class action lawsuit against Countrywide Home Loans, Inc. and Balboa Reinsurance Company alleging violations of the Real Estate Settlement Procedures Act ("RESPA"). The court described the plaintiffs allegations as follows:
  • Plaintiffs alleged that their private mortgage insurance premiums were channeled into an unlawful “captive reinsurance arrangement”—essentially, a kickback scheme—operated by their mortgage lender, Countrywide Home Loans (“Countrywide”), and its affiliated reinsurer, Balboa Reinsurance Co. (“Balboa”), in violation of RESPA section 8(a) and section 8(b), 12 U.S.C. § 2607(a)-(b). The thrust of their complaint was that, in enacting and amending section 8, Congress bestowed upon the consumer the right to a real estate settlement free from unlawful kickbacks and unearned fees, and Countrywide’s invasion of that statutory right, even without a resultant overcharge, was an injury-in-fact for purposes of Article III standing.

A lower court disagreed and dismissed the complaint without prejudice for lack of jurisdiction. The 3rd Circuit Court of Appeals concluded differently, reversed the lower court, and reinstated the lawsuit.(1)

For the ruling, see Alston v. Countrywide Financial Corporation, et al., No. 08-4334, 2009 U.S. App. LEXIS 23822 (3rd Cir., October 28, 2009).

Thanks to nationally recognized mortgage servicing fraud watchdog Mike Dillon at GetDShirtz.com for the heads-up on the court ruling.

Go here for Mr. Dillon's commentary on a variety of mortgage servicing fraud issues.

(1) The U.S. Department of Justice - Civil Division intervened in this matter, siding with the homebuyers' position.

Struggling Florida Condo Associations Continue Requesting Court Orders For Blanket Receiverships In Effort To Stay Financially Afloat

In Palm Beach County, Florida, the Palm Beach Post reports:
  • With 50 percent of its owners owing a total of more than half-a-million dollars in overdue maintenance fees, a suburban West Palm Beach condo association wants to seize control of delinquent units, bypass owners when it comes to rent collection and possibly even rent units through a third party. The move by the Palm Beach Grande Condominium Association(1) is a desperation measure as coffers dwindle to amounts unable to support the association through the end of the year, according to a petition filed in Palm Beach County Circuit Court.

***

  • Since 2007, nearly 160 of Palm Beach Grande's 304 units have faced a foreclosure filing, according to Condo Vultures, a Miami-based consulting company. About $675,000 is owed Palm Beach Grande's association.

***

  • Now, faced with hundreds of delinquent units, "blanket receiverships" are becoming more common. Recent court decisions in Miami-Dade and Broward counties have granted blanket receiverships, allowing a court-appointed representative to directly collect rents to pay off maintenance fees. [...] The new legal tool appears to be moving north with one Palm Beach County property management company saying it expects about five condo boards it represents to file receivership requests within the next 30 days.

For the story, see Condo association says half its owners are behind on a total of $675,000 in fees.

(1) Reportedly, Palm Beach Grande was a rental apartment complex until 2006 when it converted into a condo.

Lender Foiled In Attempt To Push Tenant Out Of Recently-Foreclosed Home; Renter Forced Into Court To Assert New Legal Rights To Dodge Eviction

In Sandy Springs, Georgia, The Atlanta Journal Constitution reports:
  • Crystal Johnson had no idea her landlord had financial trouble until police taped an eviction notice to the door of her Sandy Springs condominium in June. About a year into her two-year lease, Johnson faced the prospect of being forced out of her home because a bank had foreclosed on the landlord, who was in default on a loan. “They treated me like I was in default,” Johnson, a music producer and songwriter, said. “But I wasn’t in default.” [...] A federal law enacted in late May, however, has eased the pain for renters such as Johnson, a single mother raising her high school aged daughter and a nephew.(1)

***

  • Johnson and EMC Mortgage Corp., which owned the mortgage to her landlord’s condo and took possession of the home, finally settled the case in housing court on Oct. 20. EMC, which initially wanted her out of the property, agreed to honor the remainder of her lease. [...] Prior to the law, tenants had few rights in landlord foreclosures, said Tamara Serwer Caldas, managing attorney for the Atlanta Volunteer Lawyers Foundation. Caldas represented Johnson in her eviction fight.

***

  • Johnson said she learned about the law from her beautician, who saw a television news broadcast about it. It was part of broader legislation dealing with foreclosure mitigation. Even then, she said, only two of 15 lawyers she called for advice knew about it. “I really had to fight; I didn’t understand how this was happening,” Johnson said. “I knew I had my rights but they weren’t being enforced. I didn’t know if the marshals were going to be coming to my door. It was a very frightening time for me.” [...] Johnson said she was offered $700 by the bank that foreclosed on her landlord to leave the condo immediately. She refused and wound up going to court.

For the story, see Law helps renters forced out when landlord defaults.

(1) Among other things, this new federal law requires lenders taking title to foreclosed homes honor any existing tenant leases, and provide at least 90 days notice when vacating month-to-month renters. See Section 702(a)(2) of the Protecting Tenants at Foreclosure Act of 2009.

The following are documents from the National Housing Law Project and the National Low Income Housing Coalition that can be used to help keep tenants from being illegally forced out of foreclosed homes in violation of the new law:

  • Sample Notice for Tenants to be Used by Successors in Interest - click here,
  • NLIHC's One-page Explanation of the New Tenant Protection Provisions - click here,
  • Questions and Answers For Tenants Of Buildings At Foreclosure After May 20 - click here,
  • NHLP Cover Memo, Tenant Protections - click here,
  • Letter from a Section 8 Tenant to Landlord - click here,
  • Letter from a Non-Section 8 Tenant to Landlord - click here,
  • Sample Notice for all Tenants - click here,
  • Sample Notice for Section 8 Voucher Holders that a PHA Could Send - click here,
  • Sample Letter to Send to Judges who handle Landlord Tenant Cases - click here,
  • Sample letter to Send to Public Housing and Section 8 HCV Administrators - click here,
  • HUD Notice on tenant protection provisions - click here,
  • Protecting Tenants at Foreclosure Act Statute - click here,
  • Tenants in Foreclosure - Webinar.

Effort To Harass Tenants Out Of Recently Foreclosed Homes In Violation Of Federal Law Continues

In West Haven, Connecticut, the New Haven Register reports on another incident involving a lender and its attorneys allegedly attempting to bully tenants out of their rented, foreclosed homes through the use of deceptively written letters designed to mislead the tenants of their legal rights under the federal Protecting Tenants At Foreclosure Act,(1) as well as under Connecticut state law, and the work of a local legal aid office in assisting the tenants in asserting their legal rights to stay put until their leases expire.
  • The East Greenwich, R.I., law firm of Marinosci, Ceritto and Shapiro is handling the property for Deutsche Bank. A July 13 letter to the tenants gave them two days to get in touch to discuss possible monetary help in relocating or the firm would initiate legal action to evict them. Subsequent legal filings consistently misspelled the street name and cited Virginia law for the basis of their actions; one tenant was given six days to leave, while the Boyds got three months, and it was unclear what communication took place with Ramon Ayala, who lives in a basement apartment.

  • Buried within the legal “notice to quit” document sent later is a reference to leases. If the tenants in fact have them, they are entitled to stay until they expire. [New Haven Legal Assistance Association housing lawyer Amy] Marx said all three have leases, but the importance of those arrangements was not explained to tenants and all were preparing to leave. Also, the $1,600 “cash for keys” offer to the Boyds was $400 less than the minimum required by state law. [...] Marx said the July 13 letter, which was signed by “evictions team lead” Daniel J. Lailer of the Rhode Island firm, “is an outright violation of the tenant act.”(2)

For the story, see Federal law gives rights to renters.

(1) Among other things, this new federal law requires lenders taking title to foreclosed homes respect any existing tenant leases, and provide at least 90 days notice when vacating month-to-month renters. See Section 702(a)(2) of the Protecting Tenants at Foreclosure Act of 2009.

(2) It wouldn't surprise me if these deceptively written communications from attorneys, real estate agents, and others creates legal causes of action in favor of the tenant, the state attorney general's office, or both as violations of applicable state deceptive and unfair trade practices statutes.

Monday, November 09, 2009

Closing Agent's Use Of Rubber Checks To Pay Off $1.6M In Existing Mortgages Leaves Refinancing Homeowners Mired In Legal Mess, Facing Foreclosure

In Will County, Illinois, the Chicago Tribune reports:
  • In early April, Jeff Franson refinanced his mortgage, switching it from Chase to SecurityNational Mortgage Co. On a sunny Saturday in early October, as he was mowing the front lawn of his Mokena home, a process server drove up and handed Franson papers that showed Chase was planning to foreclose on his home. Franson was current on his mortgage with SecurityNational. But the $93,702.51 check cut by Counselors' Title Co. to pay off the Chase loan bounced. After months of phone calls and letters between Franson, his attorney and the companies involved, Chase filed foreclosure papers in Will County Circuit Court.

***

  • Franson and at least seven other Midwestern homeowners who did business with Counselors are wondering what's in store for their homes and what happened to the $1.6 million that was supposed to pay off their loans. [...] The crux of the problem for Franson and other homeowners who closed their transactions at Counselors' offices is that Ticor Title Insurance Co., a national title insurance underwriter, says it terminated its underwriting agreement with Counselors before those closings occurred.

***

  • In early May, less than a week after Chase notified Franson of the bounced check, Ticor filed suit in federal court in Cincinnati against Counselors, [and its three principals, James Erwin and Shari Erwin of Chicago and Damian Sichak of Homer Glen], claiming they had committed breach of contract and fiduciary duty, fraud and negligence, among other allegations. Ticor's suit states that it terminated its contract with Counselors on March 13, but that Counselors continued to "issue purported Ticor title insurance 'commitments' " and "is representing to its customers that Ticor remains its title insurance underwriter." In the filing, Ticor said it was aware of eight affected borrowers in Illinois, Indiana and Ohio, including Franson, and loans totaling almost $1.6 million. The suit also stated that Counselors told Ticor a fire destroyed many of its records at its Crestwood office in January and, as a result, it was unsure how many other checks it issued would bounce. Ticor's suit also claims the Erwins and Sichak are personally liable for Counselors' failure to comply with its agency agreement.(1)

For more, see Homeowners left in a lurch after mortgage refinancing checks bounce (Borrowers face foreclosure after title company fails to pay off original mortgages).

(1) Separately, in July, Landmark American Insurance Co., which provided Counselors with professional liability insurance, filed suit in Cook County Circuit Court against Counselors, the Erwins, Sichak and Ticor, the story states. Landmark claims it is not responsible for covering any claims if there is a court finding of dishonest, fraudulent, criminal or intentional activity, if the principals were found to have signed personal guarantees, if the company is insolvent or if the escrow funds were improperly handled, according to the story. title insurance legal issues EscrowRipOffKappa

Negotiating Deed In Lieu Of Foreclosure Without Obtaining A Release Of Deficiency Liability Leaves Homeowner In Hot Water

Attorney Jonathan Alper from the Florida Asset Protection Blog offers this caution to financially strapped homeowners when negotiating the transfer of their property to the foreclosing mortgage lender by a deed in lieu of foreclosure:
  • A deed in lieu of foreclosure is supposed to be a final settlement between owner and mortgage lender. The lender accepts a deed to the property in consideration for releasing the borrower of any further liability under the loan or mortgage. When my clients tell me they want to offer a deed in lieu they intend for the deed to the lender will end their liability under the mortgage loan.

  • When I looked at [one] client’s "deed in lieu" I found that the lender did not include a release of liability, and in fact the document referred to the borrower’s continued liability for a deficiency. This client had negotiated a deed in lieu of foreclosure but not a deed in lieu of deficiency liability. Also, by surrendering title to the property without the bank having to foreclose, the client gave up all the defenses available in a foreclosure action which he could use as leverage to negotiate a complete release. If your mortgage lenders offers you a deed in lieu make sure it’s the real deal. You give them the property back and they release you from any further liability. Anything less may be a trap.

Source: Deeds In Lieu Of Foreclosure : Make Sure Lender Is Offering The Real Thing.

Four Attorneys Get The Boot From Legal Profession In Florida For Alleged Real Estate, Trust/Escrow Account-Related Mischief

The Florida Bar, the state's guardian for the integrity of the legal profession, recently issued its periodic "scandal/gossip sheet" in which it announced that the Florida Supreme Court in recent court orders disciplined 19 attorneys, disbarring eight, suspending six and placing two on probation.

Among the 19 disciplined were the following four attorneys who allegedly engaged in certain real estate and trust/escrow account-related hanky panky which got them booted from the legal profession in Florida:

  • Jay Charles Floyd, disbarred for five years. Floyd was further ordered to pay restitution totaling more than $76,000 to four clients. Floyd misappropriated client settlement funds and used the money to satisfy his personal financial obligations.

  • Daniel Henry Fox, disbarred. Fox issued trust account checks, which were returned due to insufficient funds; he failed to maintain his trust account and he abandoned his representation of clients in connection with residential real estate loan modifications.

  • Richard C. Koskey, disbarred. Koskey was the subject of two Bar disciplinary investigations. In one case, Koskey failed to disburse $105,000 to pay off a mortgage and remit $91,000 to his client. In another case, Koskey caused to have a payoff letter prepared which falsely stated the amount due on a mortgage. As a result, he improperly received additional funds from the proceeds of a refinance transaction, causing the first lender to subsequently file a foreclosure action.

  • Jorge Enrique Rodriguez, disbarred. Rodriguez failed to preserve and apply funds in connection with real estate transactions.

Source: Supreme Court Disciplines 19 Attotrneys - 10/29/09.

-----------------

If a Florida attorney, in the process of giving legal representation, screws you out of money or property through dishonest conduct, go to The Florida Bar's Clients' Security Fund for information on how to put in a claim to get possible reimbursement.

For other states and Canada, see:

Fannie Left Holding The Bag On Dilapidated Bronx Apartment Buildings - Now Asked To Fork Over $320K+ To Repair Structurally Unsafe Conditions

In New York City, Crain's New York Business reports:
  • A Bronx judge has ordered Fannie Mae to answer charges that it is neglecting three dilapidated rental buildings for which it holds the mortgages as they wind through the foreclosure process. The order, [...] comes in response to a charge by the court-appointed receiver that the mortgage giant reneged on a promise to pay for $20,000 in repairs needed to correct city housing violations in the buildings.(1)

  • As a result of this, I have no confidence that [Fannie Mae] will pay for the major capital improvements which are required to protect the lives and safety of the tenants and to preserve the value of the asset without a specific order from this court,” wrote the receiver, attorney Marc Landis, in a court filing.

  • Mr. Landis wants the court to order Fannie Mae to fork over the $324,475 that he estimates is needed to conduct basic repairs at the three five-story residential buildings. He says he has only about $4,000 in an operating account and nearly $20,000 in outstanding bills on the properties, which have hundreds of outstanding citations from the city. Two of them are on the city's list of worst-kept properties. “We have buildings that have structurally unsafe conditions,” he said. “I'm not going to turn these properties into luxury residences, but I do need to make sure they're safe.”

For more, see Court pulls Fannie Mae deeper into housing fracas (Mortgage guarantor, stuck with 14 foreclosed properties, must answer charges that it is allowing apartment buildings to fall apart).

(1) The judge's order is the latest twist in an ongoing drama that involves the three buildings being managed under receivership by Mr. Landis and at least 11 other properties also in foreclosure, all of which were purchased at the height of the boom by real estate investment firm Ocelot Capital for $36 million, the story states. Fannie Mae reportedly purchased the $29 million mortgage from Deutsche Bank and then discovered the loan didn't meet its underwriting standards. The buildings were subsequently abandoned by Ocelot, and the loans—still held by Fannie Mae—went into foreclosure in March.

Sunday, November 08, 2009

California Woman Ordered To Stand Trial For Burglary, Grand Theft In Alleged Upfront Fee Loan Modification Racket

In Monterey County, California, The Herald reports:
  • A judge Friday ordered a Gonzales woman to stand trial in connection with an allegedly fraudulent real estate scheme, but cleared her nephew, saying there was insufficient evidence that he was involved in the conspiracy. Maria de Lourdes Ponce, 51, will be arraigned Dec. 8 on charges of burglary, conspiracy and five counts of grand theft. She faces up to nine years in prison if convicted.(1)

  • According to testimony at her prolonged preliminary hearing, Ponce took advance fees from homeowners who were facing foreclosure, promising that she could negotiate with the banks to give them new or modified loans.

***

  • The burglary charge — which alleges that Ponce entered the home of her landlord to collect a $2,800 advance fee knowing that she would never deliver on the promised loan — is the most serious of the felony charges, carrying a maximum sentence of six years in prison.

For more, see Judge orders aunt to court in fraud scheme, burglary; clears nephew.

(1) Her associate, Melissa Garcia, of Watsonville, is serving a four-year prison sentence in connection with an unrelated case in Santa Cruz County, the story states. She reportedly pleaded guilty in the Monterey County case and has agreed to testify against Ponce.

Man To Serve 1 To 3 For Using Forged Docs To Swipe Common Law Wife's Share Of Home, Then Pocketing Mortgage Refi Proceeds; House Now Faces Foreclosure

In Monsey, New York, the Mid-Hudson News reports:
  • Egon Linzenberg of Hillburn is going to serve one to three years in state prison for stealing the house he shared with his estranged and long time common law wife and one of their three sons. Linzenberg forged several documents, illegally and secretly removing his wife’s name from the deed to the home, leaving title to the shared house in only his name. He then fraudulently refinanced the house, again using forged documents, and took and sent all of the proceeds from the refinance. The house, at 82 Regina Road in Monsey, is currently in foreclosure. The forged documents included a power of attorney and several real estate and mortgage documents.

  • Linzenberg must also pay $226,000 in restitution; he has already paid back $200,000, which was turned over to the victim. He had been convicted last January of grand larceny in the second degree, two counts of criminal possession of a forged instrument in the second degree and four counts of forgery in the second degree. The jury trial lasted eight days.

Source: Rockland man goes to prison for stealing house he shared with his estranged, common law wife. DeedContraTheft

Scammer Dupes 80-Year Old Woman Out Of $450K In Phony Investment Scheme; Victim Took Out Three Loans On Previously Mortgage Free Home To Invest

In Santa Rosa, California, The Press Democrat reports:
  • A Windsor plumber pleaded no-contest Thursday to 19 felony counts of real estate fraud in a scam that cost investors more than $1 million. Juan Carlos Alcala, 32, will receive up to seven years in prison at his March 24 sentencing under an agreement that avoids trial, Deputy District Attorney Robin Hammond said.

***

  • [In addition to other defrauded victims, f]urther investigation revealed he had also defrauded an 80-year-old Sebastopol woman out of $450,0000 over three years [...]. The woman initially hired him for plumbing work. Alcala told the woman he needed money to invest in property he was fixing and persuaded her to give him $200,000 in cash and take out three mortgages on a home she owned outright, Hammond said.

For the story, see Real estate fraud could bring Windsor plumber 7 years in prison.

Caution Urged When Signing Up For Prominent Foreclosure Listing Service

In Los Angeles, California, the Los Angeles Times reports:
  • Maria Casanova, an assistant professor of economics at UCLA, toyed with the idea earlier this year of buying a foreclosed property near the Westwood campus. She signed up for a prominent listing service called RealtyTrac. Casanova, 31, canceled her subscription not long after. Yet a few days ago she discovered that some other real estate company she'd never heard of has been billing her almost $45 a month for the last eight months.

  • Consumer advocates say it's an all-too-common problem: People signing up for one thing online and inadvertently signing up for something else that comes with recurring monthly charges. [...] In RealtyTrac's case, the enrollment process for access to the site's foreclosure listings includes a marketing pitch for another company, a Utah business called Real Estate Promoter.

***

  • Unless you read the fine print, which consists of gray letters on a gray background, you won't know that clicking continue will in fact sign you up for Real Estate Promoter's service at a recurring cost of $44.95 a month. [...] Casanova, for one, believes it's a deliberate attempt to deceive people. "I was completely unaware that I was signing up for this other company," she told me. "I thought the whole sign-up process was for RealtyTrac."

***

  • A Google search turns up numerous complaints [or try here for Ripoff Report] from people who were similarly surprised to find $44.95 charges for Real Estate Promoter on their credit card statements -- in virtually all cases, as a result of signing up for RealtyTrac.

For the story, see Real estate company's pitch leads to unexpected bill.

Saturday, November 07, 2009

Increase In Housing Discrimination Against Families With Children Attributed To Growing Use Of Internet To Advertise Rentals

In Grand Rapids, Michigan, The Grand Rapids Press reports:
  • When a landlord told a young Grand Rapids mother interested in renting a duplex that she would have to pay twice the regular security deposit because she had three children, the woman was shocked. “I know I have kids, but I don’t have animals for children,” said the 24-year-old, whose children are 5, 2 and 2 months. “I don’t know what kind of damage they would do that would take two months’ security deposit.” The mother, who asked not to be identified, eventually learned the requirement was illegal: The Fair Housing Act bans discrimination on the basis of “familial status.”

***

  • Nationwide, familial status complaints rose from 3,500 in 2006 to 5,300 last year, according to the National Fair Housing Alliance. The increase is attributed to the growing role of Internet advertising. Newspapers are held liable under the Fair Housing Act for their advertising content, but Web sites such as Craigslist.com or rentgr.com are held to a different standard: The burden is on the poster, not the site owner.

For mrore, see More renters claiming landlords are unlawfully discriminating against families.

Mass. Landlords Get Hammered For Failing To Lease To Renters w/ Kids To Avoid Lead Paint Abatement Requirements, Tenants w/ "Section 8" Subsidies

The Office of the Massachusetts Attorney General has taken recent action in connection with enforcing housing discrimination laws involving the alleged refusal by landlords to rent to families with children & tenants receiving housing subsidies, as well as the refusal of landlords to remediate lead based paint hazards in rental units and common areas:
  • Coakley Obtains Consent Judgment Against Quincy Landlords for Discriminating Against Section 8 Recipients: Attorney General Martha Coakley’s Office obtained a consent judgment against Inna Bogina, the owner of a three-bedroom rental property in Quincy, and her daughter Tatiana Bogina, the rental agent for the property, resolving allegations that they violated state anti-discrimination laws by refusing to rent to recipients of housing subsidies and a family with children. The consent judgment, entered yesterday by Judge Barbara A. Dortch-Okara in Norfolk Superior Court, orders Inna and Tatiana Bogina to pay $5,000 to the victims, bars the Boginas from discriminating in the future, and requires Tatiana Bogina to attend a training on fair housing laws.

  • Coakley Reaches Settlement with East Boston Landlord Resolving Allegations of Housing Discrimination: Attorney General Martha Coakley’s Office reached a settlement with an East Boston landlord, resolving allegations that he unfairly discriminated against prospective tenants, denying them the opportunity to rent an apartment. The Assurance of Discontinuance, filed [...] against Russell Tremaine, the landlord, alleges that he violated state anti-discrimination and lead paint laws by denying a couple with a young child the right to rent an apartment in East Boston because of the presence of lead paint. "It is against the law to deny a family the opportunity to rent an apartment because the family has a child under six, which would require the landlord to abate or remove any lead paint from the unit and common areas. Those who choose to be landlords and participate in the rental market must play by the rules and abide by the laws meant to ensure people’s health and safety,” said Attorney General Martha Coakley.

  • Coakley Reaches Statewide Settlement with 20 Landlords and Real Estate Agents for Discriminatory Advertisements on Craigslist and Files Suit Against Six Others: Attorney General Martha Coakley’s Office reached settlements in 20 cases against landlords and real estate agents across the Commonwealth accused of violating state anti-discrimination laws by making discriminatory statements in rental advertisements posted on the popular classified advertising website Craigslist.org (“Craigslist”). The Attorney General’s Office also filed lawsuits against six other defendants based on similar allegations. The settlements and lawsuits are a result of a statewide investigation into reports of widespread discriminatory Internet advertising, [...]. Under Massachusetts law, it is illegal to discriminate against someone because the presence of children might trigger a property owner’s duties under the lead paint laws or because someone receives a housing subsidy, such as a Section 8 voucher, to pay for some or all of their rent. The advertisements in question in this investigation include such language as “no children” or “no Section 8,” in blatant violation of the law. The settlements, [...] require the property owners and real estate agents to pay the Commonwealth $18,250, ($8,750 of which is suspended pending compliance with the agreements), attend trainings on state and federal fair housing laws, remove lead paint hazards from the rental units, and prohibit the defendants from placing discriminatory advertisements or otherwise discriminating against any person who seeks or applies for housing because they are a member of a protected class.

  • Coakley Settles with Cambridge Real Estate Company That Discriminated Against Family with Young Child: Attorney General Martha Coakley’s office obtained a consent judgment against ABG Residential, a Cambridge-based realty company, and its agent, Georgina Zala, resolving claims that the company refused to rent an apartment to a couple because they had a nine-month old child whose presence would require abatement of lead paint hazards under state law. The consent judgment, [...] orders the defendants to pay $3,500 to the couple and bars the defendants from future acts of discrimination.

Ex-HOA President Gets 18 Months House Arrest For Swiping $87K By Dipping Into Association's Funds; Lien Placed On Home To Secure Restitution Payments

In Dayton, Ohio, the Dayton Daily News reports:
  • The former president of the Gander Road Homeowner’s Association, who admitted to embezzling $87,000 from the group, was sentenced [...] to five years probation. Rose Griffin, 69, of Dayton, appeared before U.S. District Senior Judge Walter H. Rice, who ordered her to pay full restitution to the association. Griffin will spend the first 18 months of her probation on home confinement, under Rice’s sentence. Griffin pleaded guilty [...] to one count of honest services mail fraud.

***

  • Griffin must repay the restitution at the rate of $1,000 per month and receive counseling for gambling addiction. Rice also ordered that a lien be placed on Griffin’s home.

For the story, see Homeowner association president sentenced for embezzling $87,000.

Lawyer Convicted In Scam Involving 85-Year Old Client Beat Out Of $160K In Phony Morgtage Deal

In Barrie, Ontario, the Barrie Advance reports:
  • A former Barrie and Innisfil lawyer was convicted of fraud and forgery in Barrie Superior Court in connection with a false mortgage scheme. Myles McLellan, 56, has had a continuing trial in Barrie since January this year. He was charged in 2006, following an extensive investigation by South Simcoe Police in relation to a mortgage fraud involving an elderly victim.(1)

Source: Lawyer convicted in scheme.

For earlier post on this story, see Attorney On Trial For Forgery, Criminal Breach Of Trust For Allegedly Duping 85-Year Old Man Out Of $160K In Bogus Mortgage Investment Deal.

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

For those in the United States, see:

Illinois Man Accused Of Ripping Off $225K From Now-Deceased Mother-In-Law Asserts "Promissory Note" Defense In Attempt To Beat Charges

In McHenry County, Illinois, the Daily Herald reports:
  • The defense for a Lake in the Hills man accused of stealing $225,000 from his mother-in-law asked a judge to throw out the charges Tuesday, claiming authorities misled the grand jury that indicted him and ignored evidence proving his innocence. Michael W. Greer, 46, faces felony charges of financial exploitation of an elderly person and forgery stemming from an investigation into allegations he used a position of authority over his now-deceased mother-in-law to gain control of substantial assets.

  • But defense lawyer Thomas Loizzo argued in court [...] that Greer received the money as a loan to his business and that there are documents - including a promissory note signed by Greer's brother and business partner - supporting that claim. "If the grand jury had known that fact, if they had known it was a loan for $225,000, they would have known this was a civil matter that doesn't rise to the level of criminality," he said.

***

  • Addressing the promissory note, [Assistant McHenry County State's Attorney Ryan] Blackney said authorities believe Greer forged it in order to cover his tracks once his financial transactions began drawing scrutiny.

For the story, see Defense claims grand jury misled in theft case.

Caregiver Charged In Alleged Ripoff Of Elderly Couple; Increased Victims' Reverse Mortgage Payments To Hide Effects Of Illicit Spending, Say Cops

In Fairfax, California, the Marin Independent Journal reports:
  • An in-home caregiver wanted on suspicion of stealing $100,000 from a retired Fairfax couple was arrested in Marin Superior Court after showing up for her scheduled arraignment. Jane Macam McClellan, also known as Jane Macam Deleon, pleaded not guilty during her initial court appearance [...], said her defense attorney, Anthony Lowenstein. McClellan, a 46-year-old Brentwood resident, was then booked into jail on allegations of embezzlement from an elder or dependent adult, forgery, possession of stolen property, burglary and theft. Her bail is set at $100,000.

  • McClellan worked for the Fairfax couple, a 98-year-old woman and her 92-year-old husband, for about six months. She was fired in August when the couple's family discovered financial irregularities, police said. McClellan allegedly used the couple's credit cards and also spent their money to hire her own family members for housekeeping work, according to the Fairfax Police Department. In addition, McClellan allegedly increased the couple's reverse-mortgage payments to help disguise the effects of her spending.

For the story, see Caregiver sought in Fairfax theft case shows up for court, gets booked.