Florida Trial Judges Continue Sloppy Work In Foreclosure Actions; Rubber-Stamped Judgments Tainted By Sewer Service Reversed By State Appellate Courts

The Palm Beach Post reports:

• Improperly served foreclosure notices may be the mortgage industry's next roadblock to repossessing homes. The Florida attorney general's office is investigating two of the state's largest companies that serve court summonses on homeowners, while at the same time [appellate court] judges are throwing out rulings based on faulty deliveries. This month, appeals courts in Miami and Palm Beach County sided with homeowners in foreclosures where judges agreed their summonses were not appropriately served.(1)

• In the Miami case, the homeowner said she was recovering at her mother's home after surgery when the person serving her the summons swore he personally handed it to her at her residence. But the server's own notes on the file showed he left the documents at the door after seeing curtains move and assuming someone was home. The homeowner later said she had no knowledge of the foreclosure until a final judgment was entered against her.(2)

***

• An attorney for one of the firms under investigation [by the state], Miami-based Gissen & Zawyer Process Service Inc., said the company plans to cooperate with the attorney general, which launched its inquiry Dec. 10. He acknowledged that in the tens of thousands of summonses served, there have likely been mistakes.

***

• It was Gissen & Zawyer that served the foreclosure summons to a Palm Beach County homeowner who won an argument Dec. 15 in the Fourth District Court of Appeal. The Royal Palm Beach law firm Ice Legal defended the homeowner, showing in its arguments scribbled notes that included one illegible grouping of numbers — either the server's identification number or the time of service. Both are required by state statute.(3)

• While the omission may seem like a technicality, it's a violation of law, said attorney Tom Ice. "Those rules are designed to stop the 'sewer service' so rampant in foreclosures," said Ice, referring to the slang term given bad process service.(4) "Once we accept the notion that some laws don't need to be enforced, where do we draw the line?"

For more, see Problems with foreclosure notices loom as next flaw in process.

(1) It should be noted that in both of the rulings, Florida appeals courts reversed rulings of lower courts which had earlier OK'd the patently obvious defective work of sloppy process servers. The guilty trial judges whose screw-ups were reversed: Miami-Dade County Circuit Court Judge Ronald M. Friedman, and Palm Beach County Circuit Court Judge Meenu Sasser.

(2) In Bennett v. Christiana Bank & Trust Co., No. 3D09-2653, (Fla. App. 3d DCA, December 1, 2010), Miami-Dade County Circuit Court Judge Friedman entered an order finding that the service was “questionable,” but that there was no meritorious defense to the foreclosure. He then denied the motion to vacate the foreclosure judgment. In reversing Friedman's ruling, the three-judge appeals court panel made the following statements of Florida law (bold text is my emphasis, not in the original text):

• Strict construction of, and compliance with, statutes governing service of process is required. Shurman v. Atl. Mortgage & Inv. Corp., 795 So. 2d 952, 954 (Fla. 2001). Without proper service, a court may not proceed in the matter. Re-Employment Servs., Ltd. v. Nat’l Loan Acquisitions Co., 969 So. 2d 467, 471 (Fla. 5th DCA 2007) (citing Henry P. Trawick, Jr., Florida Practice and Procedure §8:20 (2007 ed.)). “A summons properly issued and served is the method by which a court acquires jurisdiction over a defendant.” Seymour v. Panchita Inv., Inc., 28 So. 3d 194, 196 (Fla. 3d DCA 2010). In analyzing whether service is proper, the return of service is the point of departure.
  
  A process server’s return which is regular on its face is presumed valid absent clear and convincing evidence to the contrary. Bank of Am. v. Bornstein, 39 So. 3d 500 (Fla. 4th DCA 2010); TelfCorp. v. Gomez, 671 So. 2d 818, 818 (Fla. 3d DCA 1996). Moreover, a simple denial is insufficient to impeach the validity of service. Telfcorp. However, in this case, Ms. Bennett raised more than her own sworn denial. The process server’s own notes, an admission against the interest of his principal, see § 90.803(18)(d), Fla. Stat. (2009), prove the insufficiency of service. The process server’s last entry reflects that he “Saw Curtains Move, Read Aloud Docs, SVP Docs at Door.”
  
  Christiana Bank argues that there is no testimony to explain what “SVP” means, but “Docs at Door” is quite self-explanatory. Curtains may move because of the wind or curious cats, and not just because some prospective defendant is attempting to avoid service.

***

• Far more troubling is the fact that Christiana Bank and its attorneys ignored this discrepancy in the return of service. In its motion for summary judgment Christiana Bank lleges that the “Defendant(s) were duly and regularly served with process.” The Bank’s proposed Final Judgment of Foreclosure, prepared by its attorneys, stated: “Service of process having been duly and regularly obtained over DEBBIE BENNETT . . . .”
  
  Once a defect in the return of service is shown, the burden of demonstrating regular service is on the party seeking to invoke the court’s jurisdiction. Bornstein, 39 So. 3d at 503; BoatFloat, LLC v. Cen. Transp. Int’l, Inc., 941 So. 2d 1271 (Fla. 4th DCA 2006). That burden was not met here. Christiana Bank, its trial court attorneys, and Christopher P. Mas of the process serving entity Pro-Vest LLC offered no testimony or other competent evidence to address the deficiency in service identified by Ms. Bennett’s counsel. Nor did Christiana Bank examine the process server’s notes after they were specifically called to its attention by Ms. Bennett’s newly-retained counsel, confess error by stipulating to the vacation of the final judgment, and allow Ms. Bennett to file and serve a responsive pleading.
  
  Where no in personam jurisdiction is obtained over a defendant, the defendant is not required to demonstrate a meritorious defense to set aside the default. Ubilla v. L&W Supply, 637 So. 2d 994 (Fla. 3d DCA 1994); Gamboa v. Jones, 455 So. 2d 613 (Fla. 3d DCA 1984). The trial court should not have required Ms. Bennett to demonstrate a meritorious defense to the action once it became clear that the summons and complaint were never properly served.

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

It should be noted that there might have been some evidence of illegal, inflated billings by the foreclosing lender in this case, as highlighted by this excerpt from the appeals court ruling:

• Finally, an examination of the final judgment and supporting affidavit reveals an array of fees and charges that merit attention on remand. Charges for over $6,400 of force-placed insurance, “forbearance interest” of over $11,300 (above and beyond $14,817.73 in accrued interest from alleged default to the date of judgment), and unitemized, conflicting “foreclosure expenses” were contained in Christiana Bank’s affidavit and the final judgment without reference to the applicable provisions of the loan documents.
  
  While we express no opinion regarding the validity or invalidity of these charges, we call them to the parties’ and trial court’s attention so that they can be addressed.

Representing the homeowner in this case was Joseph J. Pappacoda, Fort Lauderdale, FL.

(3) The appeals court in Kwong v. Countrywide Home Loans Servicing, L.P., No. 4D10-1129 (Fla. App. 4th DCA, December 15, 2010), kept its ruling short and sweet, as evidenced by its one-paragraph reversal:

• James Kwong and Lifen Li Kwong appeal from a non-final order denying their motion to quash service of process. They claim that service was defective because the process servicer failed to note, among other things, the time of service on the copy of the complaint served. Because strict compliance with statutory requirements of service is mandated, we conclude that failure to make the obligatory notations renders the service defective. We therefore reverse and remand for further proceedings. See Vidal v. Suntrust Bank, 41 So. 3d 401 (Fla. 4th DCA 2010).
  
  Reversed and remanded.

(4) Go here for more posts on sewer service.

Northern NJ Couple's Suit Says Loan Servicer Duped Them Into Making Temporary Loan Mod Payments w/ Bogus Assurances That Deal Would Be Made Permanent

In New Milford, New Jersey, The Bergen Record reports:

• Luis and Maria Valenzuela of New Milford struggled to pay their mortgage after a cascade of setbacks — including illness, a car accident, their daughter's layoff, and a granddaughter's autism diagnosis. The family's mortgage company agreed to a temporary loan modification, which lowered their monthly payments (including property taxes) from $3,250 to $2,156. But the Valenzuelas say that although they paid faithfully, their mortgage company refused to make the modification permanent.

***

• The Valenzuelas have filed suit in Superior Court in Bergen County, accusing their mortgage servicer, Wells Fargo, of violating a contract — as well as consumer protection laws(1) — by refusing to grant them a permanent loan modification.(2)

***

• Mario Blanch, the Valenzuelas' lawyer, acknowledges that there was no written agreement to make the temporary loan modification permanent. But he said Wells Fargo employees told the family they were on track for a permanent lowering of their monthly charges.

• Moreover, he said, by accepting the family's modified mortgage payment for 11 months, the lender led the family to believe the deal would become permanent. As a result, he said, the family did not pursue other possible solutions, such as declaring bankruptcy. "They were given a promise, and that promise was breached," Blanch said.(3)

For more, see Family says lender did not deliver the mortgage relief it promised.

(1) A ruling by a New Jersey appellate court earlier this year held that unfair or deceptive practices by a lender or loan servicer in connection with the negotiation of an agreement to cure a default in a mortgage following the entry of the judgment of foreclosure is subject to the provisions of the New Jersey Consumer Fraud Act. Gonzalez v. Wilshire Credit Corp., 411 N.J. Super. 582, 988 A.2d 567; 2010 N.J. Super. LEXIS 16 (N.J. Sup. Ct. App. Div. 2010). See also Unfair, Deceptive Practices In Connection With Post-Foreclosure Judgment Loan Workout Negotiations Subject To NJ Consumer Fraud Act.

(2) For similar HAMP-related lawsuits brought against lenders & loan servicers for allegedly stringing borrowers along with empty loan modification promises, see:

• Bosque v. Wells Fargo, Class Action Amended Complaint (Exhibits: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, and 11 - eight-page demand letter (offering Wells Fargo opportunity to settle HAMP claims)),
• Johnson v. Bank of America Home Loans Servicing, Class Action Amended Complaint,
• Durmic v. J.P. Morgan Chase, Class Action Complaint,
• Reyes v. OneWest, Class Action Amended Complaint,
• Belyea v. Litton Loan Servicing, Class Action Amended Complaint,
• Ponder et al. v. Bank of America, BAC Home Loans Servicing.

(3) By giving the family assurances that the temporary loan modification would become permanent, causing them to abandon the pursuit of other possible solutions, the lender could open itself up to a defense of promissory estoppel which, if a court agrees, could make a lender's oral promises enforceable, even absent consideration given by the borrower in exchange for those assurances.

A California appeals court made the following observations with regard to the defense of promissory estoppel in a foreclosure action earlier this year in Garcia v. World Savings FSB, 183 Cal. App. 4th 1031 (2010) (bold text is my emphasis, not in the original text; all case law links may require free registration at Findlaw.com):

• As a general rule, a gratuitous oral promise to postpone a foreclosure sale or to allow a borrower to delay monthly mortgage payments is unenforceable. (Raedeke, supra, 10 Cal.3d at p. 673; California Securities Co. v. Grosse (1935) 3 Cal.2d 732, 733; Secrest v. Security National Mortgage Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 547; Sutherland v. Barclays American/Mortgage Corp. (1997) 53 Cal.App.4th 299, 312; Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112, 121; Stafford v. Clinard (1948) 87 Cal.App.2d 480, 481.) fn. 9

***

• The absence of consideration or benefit to the promisor does not, however, defeat a claim based on promissory estoppel. fn. 10 The doctrine of promissory estoppel "make[s] a promise binding under certain circumstances, without consideration in the usual sense of something bargained for and given in exchange." (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 249; accord, Raedeke, supra, 10 Cal.3d at p. 672.)

• "Under this doctrine a promisor is bound when he should reasonably expect a substantial change of position, either by act or forbearance, in reliance on his promise, if injustice can be avoided only by its enforcement." (Youngman v. Nevada Irrigation Dist., supra, 70 Cal.2d at p. 249.)

• "'The vital principle is that he who by his language or conduct leads another to do what he would not otherwise have done shall not subject such person to loss or injury by disappointing the expectations upon which he acted.'" (Wilson v. Bailey (1937) 8 Cal.2d 416, 423, quoting Carpy v. Dowdell (1897) 115 Cal. 677, 687.)

• "'In such a case, although no consideration or benefit accrues to the person making the promise, he is the author or promoter of the very condition of affairs which stands in his way; and when this plainly appears, it is most equitable that the court should say that they shall so stand. [Citations.]'" (Wade v. Markwell & Co. (1953) 118 Cal.App.2d 410, 420.)

See also, Wrongful foreclosure – verbal assurance that foreclosure sale will be postponed may be enforceable (requires paid subscription; if no subscription TRY HERE, or TRY HERE, then click link for the story).

Parade Of Homeowners Bringing HAMP Lawsuits Continues; Missouri Class Action Says BofA Refuses To Follow Loan Mod Rules Despite $25B TARP Cash Grab

In St. Louis, Missouri, Courthouse News Service reports:

• The seemingly endless string of class actions against Bank of America's foreclosure policies continued here in Federal Court. The class claims that BofA and BAC Home Loans Servicing refuse to participate in foreclosure prevention programs despite taking $25 billion in Troubled Asset Relief Program money.(1)

• Lead plaintiff Susan Fraser says Bank of America, by accepting the TARP money, agreed to participate in at least one TARP-authorized program to minimize foreclosures. The complaint echoes similar complaints filed last week by the attorneys general of Arizona and Nevada.(2) BAC Home Loans Servicing is also named as a defendant in the St. Louis complaint.

***

• The class consists of all eligible homeowners who have been serviced by one or both defendants who have not received a permanent modified loan. The class seeks an injunction and damages. It is represented by Michael Flannery with Carey Danis & Lowe.

For more, see Bank Slammed With Another Class Action.

For the lawsuit, see Fraser v. Bank of America, N.A., et ano.

(1) "Though Bank of America accepted $25 billion in TARP funds and entered into a contract obligating itself to comply with the HAMP directives and to extend loan modifications for the benefit of distressed homeowners, Bank of America has systematically failed to comply with the terms of the HAMP directives and has regularly and repeatedly violated several of its prohibitions," the complaint states.

(2) See The New York Times: Two States Sue Bank of America Over Mortgages.

For the lawsuits, see:

• State of Arizona v. Countrywide Financial Corporation, et al.,
• State of Nevada v. Bank of America Corporation, et al.

(3) For a sampling of other similar HAMP-related lawsuits brought against lenders & loan servicers for allegedly stringing borrowers along with empty loan modification promises, see:

• Bosque v. Wells Fargo, Class Action Amended Complaint (Exhibits: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, and 11 - eight-page demand letter (offering Wells Fargo opportunity to settle HAMP claims)),
• Johnson v. Bank of America Home Loans Servicing, Class Action Amended Complaint,
• Durmic v. J.P. Morgan Chase, Class Action Complaint,
• Reyes v. OneWest, Class Action Amended Complaint,
• Belyea v. Litton Loan Servicing, Class Action Amended Complaint,
• Ponder et al. v. Bank of America, BAC Home Loans Servicing.

Recent Law School Grads Recruited By Foreclosure Mills Attract Cloud Of Suspicion For Roles In Alleged Widespread Document Manufacturing Racket

The Palm Beach Post reports:

• Recently out of law school and looking for work, scores of young Florida attorneys found steady paychecks in burgeoning firms whose business is based on repossessing the American dream. Today, more than 260 attorneys work at four of Florida's largest foreclosure firms, and 48 percent of them have been practicing law for less than three years, according to Florida Bar records obtained by The Palm Beach Post.

• Of 156 attorneys who started the year churning out foreclosures at the massive Plantation-based operation of David J. Stern but have since left or been laid off, half had been practicing law for less than four years.

• With this fall's allegations of forged foreclosure documents, fraudulent notarizations and questionable affidavits submitted in tens of thousands of foreclosure cases, those nascent lawyers are now under a cloud of suspicion.

• Some may face Florida Bar investigations that could end their careers, while homeowner advocates wonder whether the foreclosure crisis would have reached its state of disorder if it weren't for legions of novice lawyers doing the legwork.

***

• Lack of experience could have led young lawyers to follow their employer's lead, unaware they may be committing an offense, said Matt Weidner, an outspoken St. Petersburg foreclosure defense attorney, who nonetheless believes lawyers share a large portion of blame in the foreclosure fracas. "The attorneys are the key; they played an essential, critical role in all of this," Weidner said. "But I know the younger attorneys had no idea what they were doing."(1)

For more, see Novice Florida lawyers draw suspicion in foreclosure mess (Nearly half of those working at the state's four largest foreclosure firms have practiced law for less than three years).

(1) Recent law school graduates appear to make for handy, but regrettably vulnerable dupes in perpetuating the alleged rackets by foreclosure mills, particularly if the recent grad is 'ball & chained' with big student loan payments for the debt that financed his/her education and can't otherwise find employment in a more respectable area of the legal profession.

Ex-Chase Mid-Level Exec Files Whistleblower Complaint Alleging Robosigner, Other Illegal Practices Involving Its Credit Card Debt Processes

AOL's Daily Finance reports:

• Linda Almonte, a former employee of JPMorgan Chase who is suing the bank for wrongful termination, has just upped the ante: She has now also filed a whistleblower complaint with the Securities and Exchange Commission. The core allegations add context to her lawsuit, and they charge Chase with grotesque and illegal practices involving its credit card debt processes, including robo-signing. Chase denies her claims. Almonte's allegations are detailed in the Nov. 30 letter sent to the SEC.

***

• Concerning robo-signing, Pressly wrote:
  
  "On numerous occasions, Ms. Almonte witnessed these Affidavit Signers work through at times 3-feet tall stacks of Judgment Affidavits at once during weekly multi-hour long, non-related company meetings. The notaries were not present at these meetings. The Affidavit Signers simply relied on hourly workers to reconcile amounts owed and then treated the actual execution of the affidavits as busy work to be performed while the Affidavit Signers could focus on other matters."

***

• Robo-signing and other problems with credit card debt collection aren't new, as David Segal's October article for The New York Times detailed. What is new is that someone in Almonte's position is willing to make such charges publicly.

For more, see Chase Hit With SEC Whistleblower Complaint Over Credit Card Practices.

Go here for Ms. Almonte's SEC Complaint.

Fla F'closure Mills Now Use 'Robo-Verifiers' As 'End Run' Around New State High Court Rules As Some Trial Judges Continue To Yawn & Snooze

The Daily Business Review reports:

• Lenders and their law firms are violating new procedures implemented by the Florida Supreme Court intended to address a controversy over botched foreclosure cases, according to attorneys for homeowners.

• After a national foreclosure scandal that resulted in a moratorium, new procedures implemented by lenders and their law firms are still falling short of requirements set by the state's high court, the defense lawyers say.

• The attorneys for homeowners claim that so-called robo-signers, who signed off on foreclosure paperwork en masse, have been replaced by "robo-verifiers" in the wake of the new Supreme Court rules. They contend that lenders are still failing to ensure that the foreclosure cases they pursue are accurate and that they own the loan in question.

***

• In a deposition conducted in early December by an attorney with the Ice Legal firm, a Wells Fargo employee detailed the bank's "verification" process. The employee, Alden Berner, said he and two other "legal process specialists" were in charge of verifying all of Wells Fargo's foreclosure cases filed in Florida. Berner declined to estimate how many cases he verified on a daily basis. "He got the message not to come out sounding like a robo-signer," said foreclosure defense attorney Thomas Ice.

***

• Berner's role as a verifier differs from that of a robo-signer. Critics say robo-signers sign foreclosure documents without having knowledge of their contents. In Berner's case, he testified that he uses a computer only to verify the name of the lender or loan servicer against the name of the investment entity that owns the loan. That still falls short of the intent of the Supreme Court ruling, critics say.

***

• Ice said he has encountered several cases in which foreclosure attorneys signed as verifiers of documents to "pretend" they were complying with the rule. "The purpose of this is for the lenders and servicers to check what the attorneys are doing," Ice said. "So in the end they will be responsible for mistakes and won't be able to say, 'I thought my attorney did it right.' " An attorney's signature on a complaint is already considered a verification, according to Florida Bar rules. "This was intended as an extra layer of precaution," he said.

***

• While some judges have accepted complaints verified by attorneys, at least one judge in Pinellas County recently criticized the practice and dismissed a case because of what he considered to be an unverified foreclosure complaint. "The Supreme Court clearly indicates in its opinion that one of the primary purposes of the rule change is to have the plaintiff appropriately investigate and verify its allegations," according to 6th Circuit Court Judge Anthony Rondolino's ruling. "An attorney should not become a witness substituting for these essential client verifications."

For the story, see Defense lawyers raise new issue: 'Robo-verifiers'.

Private Investors Score Big Profits In Tax Lien Ripoffs As County Process Allows For One Homeowner's $291 Delinquent Tax Bill To Grow To $8,200

In Fulton County, Georgia, The Atlanta Journal Constitution reports:

• Robin Gordon didn’t know about the tax lien Fulton County placed against her apartment until the county sold the lien to a private company, foreclosed and sold the property at a sheriff’s auction.

• Now, to keep her property, she must pay $8,200 to satisfy the $291 she initially owed in delinquent taxes and penalties. “It’s just seems too ludicrous to be true,” Gordon said. That’s a profit of 2,700 percent for Vesta Holdings and KOR Holdings, the sister companies that purchased Gordon’s lien, ordered the sheriff’s office to auction her apartment and then bought her property at the auction.

• While most Georgia counties prohibit this practice, Fulton and Gwinnett counties routinely sell tax liens to private third parties who can pump up the lien value and use foreclosure to collect the debt.

• Proponents say selling tax liens to private businesses lowers counties’ collection costs. But critics say the tactic is an abdication of a county’s tax collection responsibility, removes due process protections for homeowners and places unnecessary financial burdens on taxpayers. Putting the process in private hands, critics say, flips the creditor’s incentive at the property owner’s expense.

• County tax collectors are interested in efficient, quick revenue collection, they argue. For-profit businesses make more money by delaying, running up the debt with penalties or foreclosing on the property and selling it at auction.

• “The imposition of taxes is one of the most feared powers of government, and when that power is transferred to a private entity, not only are they not accountable like the government, but their incentives are entirely different,” said Frank Alexander, a law professor at Emory University who specializes in Georgia real estate and foreclosure law. "The investor’s only incentive is to maximize profits.”

• That is why DeKalb County does not sell tax liens, said Andrew Booth, deputy tax commissioner and director of delinquent collections division. “There’s no accountability to taxpayers and residents by the purchasers of the tax lien,” he said.(1)

For more, see Tax lien sales
shock, dismay.

(1) For similar "tax lien-inflating" rackets reportedly going on elsewhere, see:

• Louisville, Kentucky: Louisville-Area Tax Lien Investors Accused Of Squeezing Delinquent Owners w/ Bogus Legal Fees When Redeeming Homes; Suit Seeks Class Action Status,

• District of Columbia: DC AG Targets Tax Lien Investor In Alleged Legal Fee Ripoff Of Delinquent Taxpayer-Homeowners,

• Anne Arundel County, Maryland: Maryland Judge Grants Ground Rent Investors Class Action Status In Suit To Preserve Their Ability To Snatch Homes Over Miniscule Debts,

• Baltimore, Maryland: More Light Shines On Baltimore City Tax Sale Auctions & Bid-Rigging Allegations (Real estate investors snatched one homeowner's property over what began with an unpaid city water bill of $362. The homeowner was incredulous when the price to keep her property shot past $3,600.).

• Baltimore, Maryland: The Other Foreclosure Menace (Mortgage Paid Off, Woman Loses Home -- Over a Small Water Bill); and go here for accompanying VIDEO: Tapped Out: How an Unpaid Water Bill Cost a Baltimore Woman Her Home.

Florida Judiciary Unable To Keep Up With Out-Of-State Counterparts When Forcing Lenders To Comply With The Law In Foreclosure Actions

AOL's Daily Finance reports:

• In the face of banks' rampant disregard for the law in pursuing foreclosures with false paperwork, the judiciary has started to emerge as the great defender of due process and the rule of law.

• For example, in October, New York put an end to the fraudulent document problem in its courts. Some Ohio courts started making similar efforts. And on Monday, New Jersey put in place rules to end document fraud in its system. New Jersey also called out major banks and demanded they affirmatively demonstrate that their foreclosure procedures are sound.

• This list of judges standing up for the system is hardly exhaustive. In each case, the judges made clear they weren't picking sides. They were merely enforcing the rules, making sure the banks didn't get special exceptions unavailable to anyone else.

• Unfortunately, not all judges are responding to the foreclosure mess this way. Those in Florida have been particularly notorious, and new rulings show at least some members of the Florida judiciary seem more committed to speeding foreclosures through to completion than anything else.

For more, see The Foreclosure Mess: Florida Judges Can Do Better.

SEIU's "Where's The Note" Campaign Meeting With Hostility By Note-Lacking Lenders?

A recent campaign by the Service Employees International Union ("SEIU") encouraging its homeowning members, whether facing foreclosure, having an underwater mortgage, or who are simply concerned over home lenders' rampant inability to account for the whereabouts of the original promissory notes, to contact their bank and demand to see the original note on their mortgage has apparently been met with a bit of hostility by the banks, as evidenced by this excerpt appearing on the SEIU website:

• Update: Homeowners are sending us reports of banks responding with threats and intimidation. It is your legal right to demand to see your original, signed mortgage note. It is illegal for banks to negatively report to your credit file during the 60 day period after requesting your note simply because you made a request to see it. If you received a response that you feel is threatening or intimidating in nature, contact your state’s Attorney General and push them to hold the banks accountable under the law: http://action.seiu.org/page/s/intimidation.

Source: Demand to see your mortgage note.

See also:

• SEIU: My bank sent a confusing or intimidating letter ("Every single homeowner that requested to see their note but was given the runaround needs to demand answers"),
• The Big Picture: Where’s the Note? Leads BAC to Ding Credit Score,
• Rortybomb: BAC Dings Credit Score Over a “Where’s The Note?” Ask,
• AlterNet: As Wall Street Tries to Strong-arm Consumers, Will WikiLeaks Bring One of the Biggest Banks it to Its Knees? (The banks have been going after their critics, but one big Wall Street player may meet its match in the coming weeks).

Seattle-Area Man Faces Felony Attempted Theft Charge For Allegedly Trying To Sell Foreclosed House After Filing Phony Claim In Home Hijacking Racket

In King County, Washington, the Seattle Post Intelligencer reports:

• A former real estate agent who landed in the news for assisting squatters who'd taken over a Kirkland mansion(1) may be headed to the big house, after prosecutors filed felony charges against him.

• Filing attempted-theft charges earlier this month, King County prosecutors contend Edmonds resident James C. McClung tried to use a bogus legal action to sell a home he didn't own to a young couple. Prosecutors claim the move by McClung came to light in October when one of the Shoreline home's new owners stopped by and found McClung's "tenants" around the house.

***

• In the current case, prosecutors claim McClung acted as an intermediary for the Shoreline home's former owner, who lost the house through foreclosure earlier in the year. McClung, prosecutors claim, filed a false claim to the house and began renting out the residence.

• Writing the court, Senior Deputy Prosecutor David Seaver noted that McClung has cast himself in public statements as an enemy of the banks and a friend to the little guy. "The defendant has acknowledged to a number of media outlets that he is engaged in a self-proclaimed 'mission' to interfere with financial institutions," Seaver told the court.(2)

***

• According to [King County Detective Robert Inn's] account, McClung said he was "taking advantage of confusion in the lending industry" and could sell the property. The Edmonds man offered that the foreclosure sale during which Chase bank bought the home was illegal, and suggested he had as much right to sell the house as the bank.(3)

For more, see Charge: Man who helped Kirkland mansion squatter tried to bilk Shoreline couple (Edmonds man claimed to be on a 'mission' to hurt banks, tried to break young couple, prosecutors claim).

(1) According to the story McClung, 42, had caught the attention of Kirkland police in June after they arrested a woman -- Jill Lane -- squatting in a bank-owned $3.2 million mansion. According to charging documents, McClung, a former real estate agent, had signed his name to a bogus claim filed by Lane.

(2) For earlier reports on this home hijacking racket, see:

• The Seattle Times: Mansion squatter not finished,
• KOMO-TV Channel 4: Police investigating man claiming million dollar Eastside mansions,
• Kirkland Reporter: Man connected with Kirkland squatter targets more Eastside homes.

(3) Reportedly, Detective Inn found, among other things, a self-titled 'deed of release' taped to a front window of the home McClung was allegedly trying to unload, purporting to identify him as the representative of the lawful owner of the property.

California Attorney In Hot Water For Advising Foreclosed Homeowners To Break In & Reoccupy Former Homes

In Southern California, the North County Times reports:

• The real estate attorney who recommended that families break into homes they'd lost to foreclosure will be meeting with investigators from the state bar association in January, the attorney's assistant confirmed.

• Encinitas lawyer Michael T. Pines made news in October when he advised four Southern California families, including two in Escondido, to hire locksmiths and break into their homes, which banks had repossessed. He argued that their lenders had granted the families mortgage loans under fraudulent conditions and had no right to foreclose.

• Local legal experts found his theories dubious, and judges agreed. Pines himself is in a complicated bankruptcy liquidation proceeding and may soon lose his office building.

For more, see Bar complaint filed against foreclosure attorney Pines (Attorney advised clients to break into foreclosed houses).

See also: Ventura County Star: DA files complaint against lawyer of family who broke into home.

Virginia AG Squeezes Settlement From Loan Modification Outfit Allegedly Making Bogus Guaranties To Stop Foreclosure In Exchange For Upfront Fees

The Washington Post reports:

• A mortgage modification company that had been illegally charging customers fees before providing emergency foreclosure help has agreed to refund customers and pay a $5,000 fine, [Virginia] Attorney Gen. Ken Cuccinelli (R) said.

• In November, Cuccinelli filed suit against the American Neighborhood Housing Foundation, a Chesapeake-based company that also operated a Richmond office for three years, charging that the fees violated the Virginia Foreclosure Rescue and the Virginia Consumer Protection Act, by guaranteeing the company could halt foreclosures.

• In a statement, Cuccinelli said the company has agreed to refund more than $94,000 to 273 customers nationally, as well as pay the fine and $10,000 to cover attorney fees. The company has also agreed to stop charging $1,500 in advance of providing foreclosure services and to stop guaranteeing that it can save people's homes.

Source: Mortgage company to pay fine for illegal fees, Cuccinelli says.

Mortgage Broker/Real Estate Agent Gets 30 Months For Running Home Equity Refinancing Ripoff; Ordered To Cough Up $200K+ In Victim Restitution

In Greeneville, Tennessee, the Knoxville News Sentinel reports:

• A Florida man convicted of a nearly two-year mortgage fraud and money laundering scheme in Greene and Cocke counties was sentenced Thursday to more than three years in prison. Thomas Duane Roderick, 44, of Wesley Chapel, Fla., not only received 37 months in prison he was also ordered to pay more than $200,000 in restitution to his victims. Roderick had previously pleaded guilty to charges of wire fraud, mail fraud, bank fraud and money laundering in U.S. District Court in Greeneville.

• According to an indictment, Roderick, a mortgage loan broker and real estate agent in Greeneville, devised a scheme to defraud clients. He worked with Premier Mortgage from 2005 until 2007 in Greeneville and used various real estate closing agencies in Greene County. At the closings, Roderick would provide fraudulent legal documents for the signature of the clients seeking loans, and the closing agency would disburse funds as required by the lending institution.

• He set up a sham investment company, entitled MSI Inc., and used a bogus checking account to capture money from clients. Roderick caused one victim to wire $20,000 to MSI, falsely telling her that she would owe taxes on the $20,000 equity she received from the refinancing of her home mortgage. He convinced her that if she turned the funds over to him, he would invest the money to avoid taxes.

• Roderick never invested the funds and immediately withdrew them after the wire transfer, and spent them for his own benefit.

Source: Florida man gets 3 years in mortgage fraud scheme.

City Of Cleveland, Local Non-Profit Target Lenders, Loan Servicers In Amended Federal Suit Over Blighted Foreclosures

In Cleveland, Ohio, WCPN Radio 90.3 FM reports:

• A local nonprofit and the city of Cleveland are asking a federal judge to force nearly a dozen financial institutions and loan servicers to take care of the houses they took back in foreclosure or pay to knock them down.

***

• Two years ago, a nonprofit affiliated with Neighborhood Progress Inc, an umbrella organization for Cleveland’s community development corporations, sued [Deutsche Bank and Wells Fargo] arguing the houses they had taken back in foreclosure were becoming public nuisances.The cases bounced around the courts and Deutsche Bank and Wells Fargo ultimately paid to demolish the properties named in that suit.

• But, the plantiffs say, the problem continues with yet more properties, and so the nonprofit Cleveland Housing Renewal Project and the city of Cleveland have refiled an amended suit in federal court. The defendants include not just Deutsche Bank, says attorney Thomas C Wagner, but also nine loan servicers including big Wall Street names like JP Morgan Chase.

For more, see Cleveland, Nonprofit Sue Deutsche Bank, Loan Servicers Over Bills for “Dangerously Blighted” Houses.

Florida Appeals Court OKs Property Tax Homestead Exemption For Non-Permanent Resident Alien Couple Where Their Three Minor Children Are U.S. Citizens

Abstract Appeal reports:

• If two parents are not legal residents of Florida(1) but they own a home in which they and their minor children reside, can the parents claim a homestead exemption for the property under Florida law? Yes they can, said the Third District [Court of Appeal] in this case.

• The decision quotes portions of the father’s affidavit, in which he explains that he and his wife live on the property and that, for their three children, the property is their permanent residence.

• The decision then observes: “Although one might wonder whether his assertions are congruent with the laws of nature, we apply in this court the constitution and laws of the State of Florida.”

Source: Third District: Homestead and Legal Residency Status.

For the court's ruling, see De La Mora v. Andonie, No. 3D09-3427 (Fla. App. 3d DCA, December 15, 2010).

(1) The homeowners in this case are a married couple who are citizens of Honduras, lawfully residing in the United States pursuant to temporary visas issued by the United States Department of Homeland Security. It was undisputed that the couple themselves (as opposed to their three minor children who are all U.S. citizens) are legally incapable of qualifying as “permanent residents” of Miami-Dade County. See Juarrero v. McNayr, 157 So. 2d 79, 81 (Fla. 1963) (finding that a non-citizen present in the United States under a temporary visa “cannot ‘legally,’ ‘rightfully’ or in ‘good faith’ make or declare [himself]” a “permanent resident” of this state for purposes of Article VII, section 6(a) of the Florida Constitution dealing with the property tax exemption for homesteads (the constitutional provisions dealing with the property tax exemption for homesteads under Florida law is to be distinguished from Article X, Section 4 of the Florida Constitution, which deals with the exemption for homesteads against forced sale by judgment creditors)).

Bay State Homeowners Sans Filed Homestead Declaration Now Entitled To Automatic $125K Home Equity 'Shield' Against Forced Sale By Judgment Creditors

In Boston, Massachusetts, The Patriot Ledger reports:

• Massachusetts homeowners stand to receive new protections from creditors under a bill that was recently enacted by the state legislature. The bill would automatically protect the first $125,000 of equity on a primary residence from creditors.

• Currently, only homeowners who file a “declaration of homestead” form with the Registry of Deeds enjoy such protections. A spokesman for the Patrick administration said Gov. Deval Patrick signed the bill into law on Thursday night. “This is really going to protect people who find themselves with their backs to the wall,” said Susan Grossberg, a Boston bankruptcy attorney.

• The protections would apply both to new transactions and existing homes. Homeowners still would have the option of filing a declaration of homestead, which increases the exemption to $500,000. The legislation is designed to deter creditors from foreclosing on the homes of delinquent debtors, even if they have filed for bankruptcy.

• Under the current law, if a homeowner does not have a declaration of homestead, a creditor could place a lien on the home and begin foreclosure proceedings. “They could turn around the next day and give you a notice that they’re going to foreclose to satisfy their lien by selling this house,” Grossberg said.

• Massachusetts is one of a dwindling number of states without an automatic homestead provision, said Kathleen Joyce, director of government relations for the Boston Bar Association. The group lobbied for the expanded protection for several years without success. To file a declaration of homestead, homeowners fill out a signed, notarized one-page document declaring a property as their primary residence and pay a $35 fee to file it with their local Registry of Deeds. These are typically filed at the time of a home’s purchase, but can be done at a later date as well.

Source: New law would protect homeowners’ equity (Designed to deter creditors’ foreclosures). homestead exemption

Missouri AG Obtains $338K+ Judgment In Suit Against Alleged Contract For Deed, Payment Skimming Racket That Left Would-Be Homebuyers In Foreclosure

In Jefferson City, Missouri, Legal Newsline reports:

• Missouri Attorney General Chris Koster announced [...] that he has obtained a summary judgment against a real estate company and two of its operators for allegedly defrauding consumers.

• Greenleaf and The Real Estate Company, as well as business operators Scott Dasal and Eric Gagnepain, allegedly defrauded consumers by selling them homes that were already owned by investors that they had solicited. Under terms of the judgment, the defendants are permanently barred from engaging in any home sales or rentals in the state. They must also provide more than $308,000 in restitution to customers. Another $30,000 will be paid to the state.

• According to the suit, the defendants would allegedly take out mortgages on homes without the consumers purchasing the homes knowing. Koster says while consumers were led to think they were purchasing the homes from Greenleaf and were buying an ownership interest in the home, the money the consumers then paid to Greenleaf, which they were told was for the mortgage, was then allegedly used for the defendants' operating expenses. Consumers learned the truth the hard way, when banks foreclosed on the loans, Koster says.(1)

Source: Koster gets judgment against real estate company.

(1) For earlier posts on this contract for deed, home-flipping racket, see:

• Straw Buyer Scheme Coupled With Subsequent Sale Using Contract For Deed Constitutes Sale Of Unregistered Security, Says Arkansas Securities Regulator,
• 21 Missouri Homebuyers File Suit Against Springfield Firm In Failed Contract For Deed Home-Buying Program,
• Missouri "Contract For Deed" Operator Hit With C&D Order By Securities Regulator, Preliminary Injunction By State AG,
• Missouri Feds, State AG, Local Cops Raid "Contract For Deed" Operator; Firm Subject To Numerous Complaints; Company Issues Public Statement,
• More Trouble For Missouri "Contract For Deed" Operator As Homeowners File Federal Suit Seeking $60M In Damages,
• Missouri Couple Sues "Contract For Deed" Operator For Allowing Home To Fall Into Foreclosure.

WV High Court OKs Use Of Misrepresentations Where Plaintiff Fails To Prove Reliance On Bad Acts In Suits Brought Under State Consumer Protection Law

In Charleston, West Virginia, The West Virginia Record reports:

• West Virginia consumers looking to sue for misrepresentation under the state's Consumer Credit and Protection Act now must show proof of reliance, according to an opinion released Friday by the state Supreme Court of Appeals. Previously, state consumers only had to prove misrepresentation to seek damages. Following the Court's ruling in White vs. Wyeth, plaintiffs now must show a causal connection between their individual claims of injury and any alleged unfair or deceptive conduct.

***

• Justice Thomas McHugh, who authored the Court's opinion, wrote that the Court did its own study of other states. Its research revealed that the private cause of action provisions of 28 states contain the "as a result of" language. Eleven states and the District of Columbia, it said, have statutes containing the "whether or not any person has in fact been misled, deceived or damaged" language. Only five states have both statutory provisions, it found.(1)

• "Our review of the diverse cases and numerous authorities addressing the issue of reliance in the context of private consumer protection causes of action leads us to the conclusion that courts are struggling to arrive at a way to be faithful to the purposes of consumer protection statutes -- promoting fair and honest business practices and protecting consumers -- without inviting nuisance lawsuits which impede commerce," McHugh wrote for the Court.

• "In determining the meaning of the phrase 'as a result of' in the WVCCPA, we find the decisions from other jurisdictions which are most reasonable, practical and fair to all relevant purposes and interests are those which have concluded that proof of a causal nexus between the deceptive conduct giving rise to the private cause of action and the ascertainable loss may require proof of reliance in some but not all instances."

For more, see Supreme Court tightens control on consumer protection act.

For the ruling, see White vs. Wyeth, No. 35296 (W.Va. December 17, 2010).

(1) See generally, Consumer Protection In The States: A 50-State Report on Unfair and Deceptive Acts and Practices Statutes for a survey on the various state consumer protection statutes throughout the U.S.

Reports Of Alleged Illegal Home Break-Ins By Lenders Continue; Deceased Owner's Cremated Remains Among Items Taken, Says One Lawsuit Against BofA

The New York Times reports:

• When Mimi Ash arrived at her mountain chalet here for a weekend ski trip, she discovered that someone had broken into the home and changed the locks. When she finally got into the house, it was empty. All of her possessions were gone: furniture, her son’s ski medals, winter clothes and family photos. Also missing was a wooden box, its top inscribed with the words “Together Forever,” that contained the ashes of her late husband, Robert.

• The culprit, Ms. Ash soon learned, was not a burglar but her bank. According to a federal lawsuit filed in October by Ms. Ash, Bank of America had wrongfully foreclosed on her house and thrown out her belongings, without alerting Ms. Ash beforehand.(1)

• In an era when millions of homes have received foreclosure notices nationwide, lawsuits detailing bank break-ins like the one at Ms. Ash’s house keep surfacing.(2) And in the wake of the scandal involving shoddy, sometimes illegal paperwork that has buffeted the nation’s biggest banks in recent months, critics say these situations reinforce their claims that the foreclosure process is fundamentally flawed.

***

• In Washington, Celeste Butler went to check on her father’s house after he spent months in the hospital and ultimately died. “The house was ransacked,” Ms. Butler said, adding that it had been neatly maintained beforehand. “They had destroyed furniture, broken into china cabinet. They had looted jewelry.”

• In her lawsuit, Ms. Butler is accusing Safeguard, a contractor for JP MorganChase, of breaking into her father’s house. Ms. Butler asserts that Chase failed to properly credit payments made when she switched to an automatic system in June 2009, but that she and the bank worked quickly to rectify the problem.

• Officials at Chase said its contractors, dispatched to inspect the house when payments were late, found it in disarray. When no one responded to a letter asking if the property had been abandoned, Chase said, its crews went back in the house to put antifreeze in the pipes.

For the story, see In a Sign of Foreclosure Flaws, Suits Claim Break-Ins by Banks.

(1) Go here for links to other reported Bank of America foreclosure screw-ups.

(2) For the lawsuit in this case, filed in California, see Ash v. Bank of America.

Earlier media reports reveal that the same Massachusetts lawyers representing Ms. Ash in this case has filed similar illegal foreclosure & lockout cases on behalf of screwed-over homeowners in other parts of the country. See:

• Bank admits mistake on Willcox home foreclosure (involving an Arizona homeowner) (for a copy of the resulting federal lawsuit, see Newman v. Bank of America, N.A. and go here for the attached Exhibits),

• Family's recently purchased home, gutted by property removal service (involving a Michigan homeowner) (for a copy of the resulting federal lawsuit and accompanying Exhibits , see Rought v Deutsche National Trust Company, Trustee, et al.),

• Couple: Bank Foreclosed On Wrong House (New Bedford Couple Suing Bank Of America) (involving a Massachusetts resident with a home in Florida) (for a copy of the resulting federal lawsuit, see Cardoso v. Bank of America, et al.).

For those homeowners who've been screwed over by wrongful lockouts by foreclosing lenders (and their confederates) and seek some possible guidance on how much their cases might be worth if they seek to sue, see:

• Nevada High Court OKs $1M+ Damage Award To Homeowner Due To Mortgage Company Misidentification Of Home In Foreclosure (for the court ruling, see Countrywide Home Loans v. Thitchener, 192 P.3d 243; 2008 Nev. LEXIS 79; 124 Nev. Adv. Rep. 64 (September 11, 2008)),

• Long Island Judge Hammers Wells w/ $155K Tab For Oppressive, Heavy Handed, Egregious Conduct For Pre-Sale Lockout Of Homeowner In Foreclosure (for the court ruling, see Wells Fargo v. Tyson, 2010 NY Slip Op 20079 (Sup. Ct., Suffolk County, March 5, 2010)).

Title Insurance/Closing Agent Cops Guilty Plea For Swiping Million$ From R/E Escrow Accounts; Resorted To "Playing The Float" To Keep Racket Running

From the Office of the U.S. Attorney (NYC/Manhattan):

• PREET BHARARA, the United States Attorney for the Southern District of New York, announced [] that BRIAN H.MADDEN, the former president and co-founder of Liberty Title Agency, LLC ("Liberty Title"), one of the largest independently-owned title insurance agencies in New York State, pled guilty in Manhattan federal court to defrauding his clients by misappropriating and embezzling millions of dollars of escrow and other client funds entrusted to Liberty Title and two other entities controlled by MADDEN.(1)

For the U.S. Attorney press release, see Former President Of Title Insurance Agency Pleads Guilty In Manhattan Federal Court To Misappropriating Millions Of Dollars Of Client Funds.

(1) From the press release:

• According to the Indictment and Complaint and statements made during the plea proceeding:
  
  MADDEN’s company, Liberty Title, sold title insurance to purchasers of property or lenders financing the purchase of property. [...] MADDEN also controlled and operated two other title insurance agencies: Skyline Title, LLC, and GNY Liberty Abstract, LLC. [...] In addition to issuing title insurance policies, MADDEN’s three companies also provided escrow services to clients, and collected and paid taxes and fees.
  
  
  Beginning around early 2008, MADDEN misappropriated millions of dollars of escrow and other client funds by transferring and commingling those funds among various bank accounts held by Skyline Title, GNY Liberty, and Liberty Title. MADDEN then used the misappropriated funds to sustain Liberty Title’s operations and to make significant withdrawals of monies for his personal use. In particular, between January 2008 and April 2009, MADDEN took more than $2 million in cash draws from Liberty Title. [...] To sustain Liberty Title’s operations in the face of such withdrawals and to pay current client debts, MADDEN misappropriated escrow and client funds of other clients, essentially using new funds from clients to pay off debts on behalf of other clients -- a practice called "playing the float." In addition, because MADDEN misappropriated the funds of title insurance agencies, he failed to timely and properly record and pay taxes on dozens of mortgages and other real estate transactions, further exposing his clients to loss.

Fleeing Florida Title Insurance Agents Accused Of Ripping Off $10M+ From Escrow Accounts Bagged In Colorado After 30 Months On The Lam

In Durango, Colorado, The Palm Beach Post reports:

• Accused of stealing $10 million from clients of their title insurance company, Roger and Peggy Gamblin spent more than two years running from the FBI before agents cornered them [...] at a hospital in Durango, Colo. The couple, who mysteriously vanished in May 2008,(1) were taken into federal custody and most likely will be returned to Florida to face charges of conspiracy and wire and mail fraud.

***

• In an eight-count superseding indictment handed up in October 2009, a federal grand jury charged the Gamblins with financing their lifestyle with stolen money. The indictment said the couple raided client escrow accounts reserved for buying houses or paying off mortgages and used the money to pay business and personal bills.

***

• Underwriters for Flagler Title, which now is in receivership, won lawsuits against the Gamblins' company in August, and a judge ordered the couple to pay the underwriters, Lawyers Title Insurance and Chicago Title Insurance Company, more than $10.2 million.

• In Durango, the Gamblins indicated they were short on cash. [...] Roger and Peggy Gamblin asked for, and were granted, a court appointed attorney, a move reserved for people who can't afford to hire their own lawyers.

For the story, see Title firm's owners, missing for 2 years, captured in Colorado.

(1) See The Palm Beach Post:

• Millions missing at title company (Before his disappearance plunged employees and customers of one of Florida's largest independent title companies into chaos [...], Flagler Title founder Roger Gamblin dipped into millions of dollars his company held in escrow for clients, according to testimony),
• Title firm owner had been fined.

Tampa Feds Charge WV Woman With Allegedly Abusing POA To Obtain, Pocket Proceeds From Mortgage Loan On 80-Year Old Disabled Victim's Free & Clear Home

From the Office of the U.S. Attorney (Tampa, Florida):

• United States Attorney Robert E. O'Neill announces the unsealing of an indictment and the arrest of Rebecca Moody, 61, of West Virginia and formerly of New Port Richey[, Florida].

***

• According to the indictment, Rebecca Moody is alleged to have engaged in a scheme to defraud an eighty year old disabled woman by using a fraudulently obtained power of attorney to procure a fraudulent mortgage loan from Wells Fargo Bank on the victim's unencumbered residence without the victim's knowledge.

• The indictment claims that Moody was also engaged in the theft of other funds from other accounts belonging to the victim in order to acquire money for Moody's personal use, and for the use of her daughter, all in contradiction of her fiduciary capacity to conduct the financial affairs in the best interest of the disabled and elderly victim.(1)

For the U.S. Attorney press release, see Woman Who Defrauded Disabled/Elderly Victim Arrested.

(1) Moody is charged with one count of wire fraud and one count of transportation of stolen property in connection with a mortgage, and other accounts, belonging to the victim who resided in New Port Richey, Florida at the time of the charged offenses.

Alabama Woman Files Federal Suit Accusing BofA Of Jerk-Around In Loan Mod Process; Action Joins Others Transferred To Boston For Pre-Trial Proceedings

(This a revision of a story posted earlier today & reflects a revision of footnote 1)

In Mobile, Alabama, the Mobile Press Register reports:

• A Mobile woman is suing Bank of America and its home lending service, claiming it wrongfully attempted to foreclose on her house after breaking an agreement to modify her loan.

***

• Kimberley George filed suit in U.S. District Court in Mobile last month. According to the lawsuit, George began discussing a loan modification agreement with Bank of American in January 2009, reaching an agreement that summer. It required her to make three monthly "trial" payments of $648 before the bank would permanently modify her loan.

• She made those payments for September, October and November, completing the trial program, according to the lawsuit. She paid the same amount in December, the lawsuit states, then was told by a bank representative to stop making payments so that the bank could "process the permanent modification and calculate a new mortgage payment based on current balance."

• In June, Bank of America told George that it would not approve a modification of her loan, and said that she was in default of her mortgage, according to the lawsuit. "The gist of the suit is, she made her trial period payments, and they didn't give us the permanent modification," said Earl P. Underwood Jr., one of her attorneys. "It's a breach of contract."

• The bank began a foreclosure proceeding in August, but later canceled it after her attorneys told the bank that she planned to seek an injunction, according to the lawsuit. Bank of America has not responded to the lawsuit, according to court records.

• The case has been transferred to U.S. District Court in Massachusetts. Pre-trial proceedings for this and similar cases will be conducted there, and then the cases will be returned to their original districts, according to Underwood.(1)

Source: Mobile woman sues Bank of America over foreclosure.

See also, Mobile-Baldwin Consumer Law Firm files Mortgage related Class Action.

(1) According to the law firm's press release, it has associated the National Consumer Law Center as co-counsel in the George case. For similar HAMP-related lawsuits brought by the National Consumer Law Center with its co-counsel, see:

• Bosque v. Wells Fargo, Class Action Amended Complaint (Exhibits: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, and 11 - eight-page demand letter (offering Wells Fargo opportunity to settle HAMP claims)),
• Johnson v. Bank of America Home Loans Servicing, Class Action Amended Complaint,
• Durmic v. J.P. Morgan Chase, Class Action Complaint,
• Reyes v. OneWest, Class Action Amended Complaint,
• Belyea v. Litton Loan Servicing, Class Action Amended Complaint.

Wells Agrees To $2B+ In Loan Mods On "Pick-A-Pay" ARMs In Settlement Of California AG's Civil Lawsuit; Will Pay Add' $32M To Foreclosed Ex-Homeowners

From the Office of the California Attorney General:

• Attorney General Edmund G. Brown Jr. announced [] that Wells Fargo has agreed to provide loan modifications worth more than $2 billion to thousands of California homeowners with "pick-a-pay" loans and to pay an additional $32 million to thousands of borrowers who lost their homes through foreclosure.

• None of the loans were made by Wells Fargo. All were originated by World Savings and Wachovia, banks Wells Fargo acquired. "Customers were offered adjustable-rate loans with payments that mushroomed to amounts that ultimately thousands of borrowers could not afford," Brown said. "Recognizing the harm caused by these loans, Wells Fargo accepted responsibility and entered into this settlement with my office."

For the California AG press release, see Brown Reaches Settlement With Wells Fargo Worth More Than $2 Billion to Californians With Risky Adjustable-Rate Mortgages.

Refinance Gone Haywire Leaves Virginia Couple Facing Foreclosure As Payoff Proceeds From Now-Defunct Lender Fail To Reach Existing Mortgage Holder

In Amelia County, Virginia, the Richmond Times Dispatch reports:

• Terry and Donna Hunt have never missed a mortgage payment. But their original lender has tried to foreclose on their house in Amelia County three times.

• The Hunts weren't involved in a loan modification, nor were they trying to take equity out of their house. Rather, things went awry when they refinanced their $211,000 mortgage in October 2009 to lower their interest rate from 7.8 percent to 5 percent. Now, no one knows who owns the loan, said Jason Krumbein, the couple's attorney.

• The new loan servicer, a government-approved lender that took over the refinanced loan from the originator, says it owns the loan, Krumbein said. But CitiMortgage, the original lender, claims it never received the payoff from Lend America, once one of the largest originators of mortgages backed by the Federal Housing Administration but now banned by the FHA from doing business.

***

• Jay Speer, an attorney with the Virginia Poverty Law Center, said that since hearing a few weeks ago about the Hunts' situation, he has been alerted to a few more cases in Virginia involving Lend America not paying off previous loans. "It's a big can of worms," Speer said.(1)

For more, see Amelia couple faces a refinancing gone bad.

(1) Reportedly, the Hunts would later learn that Lend America abruptly ceased operations within weeks after it closed on their refinance. The U.S. Attorney for the Eastern District of New York had filed a complaint in federal court, accusing Lend America of fraudulent lending practices that compromised the integrity of the FHA mortgage insurance program and contributed to increases in loan defaults and foreclosures, the story states.