Tuesday, June 14, 2011

Chase Dumps Chief Of Beleaguered Mortgage Unit Over Illegal Foreclosure Practices That Screwed Over U.S. Servicemembers

Bloomberg reports:
  • JPMorgan Chase & Co., the second- largest U.S. bank, ousted mortgage chief David Lowman after it overcharged active-duty military personnel on loans and improperly foreclosed on other borrowers.

***

  • JPMorgan has been taking steps this year to repair its mortgage unit, which posted at least $3.3 billion in losses during the first quarter.

***

  • [Chase CEO Jamie] Dimon said the military foreclosures were the worst mistake the bank has ever made. “We deeply apologize to the military, the veterans, anyone who’s ever served this country and we’re trying to go way beyond” what is needed to correct the errors, he said at the company’s May 17 annual shareholder meeting. “We’re sorry.”

For more, see JPMorgan Ousts Mortgage Chief Lowman After Foreclosure Lapses.

More Heat For Banksters As NY, Delaware AGs Begin Sniffing Around For Faulty Securitizations

The New York Times reports:
  • Opening a new line of inquiry into the problems that have beset the mortgage loan process, two state attorneys general are investigating Wall Street’s bundling of these loans into securities to determine whether they were properly documented and valid.
  • The investigation is being led by Eric T. Schneiderman, the attorney general of New York, who has teamed with Joseph R. Biden III, his counterpart from Delaware. Their effort centers on the back end of the mortgage assembly lines — where big banks serve as trustees overseeing the securities for investors — according to two people briefed on the inquiry but who were not authorized to speak publicly about it.
  • The attorneys general have requested information from Bank of New York Mellon and Deutsche Bank, the two largest firms acting as trustees. Trustee banks have not been a focus of other investigations because they are administrators of the securities and did not originate the loans or service them. But as administrators they were required to ensure that the documentation was proper and complete.

***

  • The stakes are potentially high. If the trustees did not follow the rules set out in the prospectus, they may be liable for breaching their duties to investors who bought the securities. That could expose the banks to costly civil litigation.

***

  • The trusts were governed by the laws of the states in which they were set up. Roughly 80 percent of the trusts are governed by New York law with the rest by Delaware law. The rules governing the securitization process are labyrinthine, and there are steps required if the investment is to comply with tax laws and promises made by the issuer in its offering document. If the trusts did not comply with tax laws, for example, the beneficial treatment given to investors could be rescinded, causing taxes to be levied on the transactions.
  • The terms of these mortgage deals varied, but many of them required that the trustee examine each of the loan files as soon as they came in from the Wall Street firm or bank issuing the security. For a file to be complete, it would typically have to include all of the information necessary to establish a chain of ownership through the various steps of the bundling process, as when the originator transferred it to the issuer of the security who then moved it to the trustee.
  • Complete loan files were supposed to be delivered to the trusts within 90 days in most cases. If the trustee found any missing or defective documents, it was supposed to notify the loan originator so that it could either cure the deficiency or replace the loan. Such substitutions are typically allowed only in the early years of the trust.
  • By asking for documents relating to this process, investigators are trying to determine if the trustees fulfilled their obligations to the investors who bought the mortgage deals, according to the people briefed on the inquiry.

For the story, see Two States Ask if Paperwork in Mortgage Bundling Was Complete.

See also, The Dylan Ratigan Show: Attorneys-General Look Into Bank Behavior In Mortgage Mess.

NJ Appeals Court: State Fair Foreclosure Act Inapplicable To Non-Owner Occupants

A recent ruling of the New Jersey appeals court serves as a reminder that the rights of New Jersey homeowners pursuant to the state Fair Foreclosure Act, (N.J.S.A. 2A:50-53 to -68) applies only to owner-occupants.

In rejecting the claims by a New Jersey couple challenging a foreclosure judgment, the court, in a nutshell, summarized thier legal analysis in this excerpt (bold text is my emphasis):
  • In other words, if the debtor or his or her family does not occupy, or plan to occupy the property when the loan originated, the Act does not apply, even if the debtor or a family member later takes up residence.

    On the other hand, even if the debtor or the debtor's family occupied or planned to occupy the property when the loan originated, the Act may cease to apply if the debtor and his family vacate the property and convert it to a rental or investment property. That is because the mortgage would cease to be a "residential mortgage" as defined once the property is no longer "occupied, or . . . to be occupied" by the debtor or the debtor's family. Ibid.

In modifying this position, however, the court hastened to add the following, in footnote 5 of their ruling:

  • One can imagine a scenario in which a mortgagor temporarily rents his or her property — for example, while taking on an extended work assignment away from home — but intends to return.

    Under such circumstances, the mortgage remains a "residential mortgage" because the property "is to be occupied" by the debtor. Defendants in this case presented no evidence of an intention to return to the mortgaged premises. Indeed, they apparently resided nearby on the same street in the same municipality.

For the ruling, and the court's full analysis of the New Jersey law on this point, see Aurora Loan Services, LLC v. Einhorn, No. A-5586-09T1 (NJ Sup. Ct., App. Div. June 9, 2011).

Recently-Issued Bankster Anti-Flopping Short Sale Contracts Put Real Estate Agents On Hot Seat As Brokers Bellyache

The Sarasota Herald Tribune reports:
  • New short-sale contracts issued by two of the largest banks in the country are causing concern in the local real estate community.
  • The contracts, which were issued by Bank of America and Wells Fargo, ask real estate agents to certify -- under penalty of perjury -- that the short sales they are conducting are "arms length" and that the properties will not be resold within 30 to 90 days of closing.
  • The object of the contracts, according to Sarasota attorney Evan Berlin, is to protect banks against what has become known as "flopping" -- a form of mortgage fraud in which real estate professionals get banks to accept low-ball prices for properties in some stage of foreclosure and quickly resell them at higher prices.
  • Though real estate agents acknowledge flopping is a legitimate concern for banks, they see the new contracts as another way in which banks are shifting more of the financial burden and liability of making sure mortgage fraud does not occur onto them. "The contracts put extra pressure on Realtors to do due diligence and could have a chilling effect on legitimate flip transactions," Berlin said.

For more, including contract excerpts from the Wells Fargo and Bank of America short sale documents, see New short-sale contracts upsetting Realtors.

Delinquent Debt-Buying Vultures Sighted Circling Around Yankee Stadium In Search Of Next Big Meal

In The Bronx, New York, Bloomberg reports:
  • Hedge funds specializing in distressed debt are buying municipal bonds backed by parking lots and garages at the new Yankee Stadium, which face a payment default as soon as next year, according to two people familiar with the purchases.

***

  • This facility seems meaningfully impaired, but there are some potential fixes,” said Laurence Gottlieb, chief executive officer of Fundamental Advisors LP, a private-equity firm in New York that buys municipal debt. “Costs can be reduced and it could be repositioned for commuter parking.”

***

  • Bronx Parking Development Co. issued the bonds through New York City’s Industrial Development Agency to build three garages, renovate two others and refurbish six lots near the 50,287-seat stadium.

***

  • The garages generated $2.4 million in April, 28 percent less than assumed, according to a May 25 report available to bondholders. They hold 9,266 spaces and the average occupancy has been 43 percent since the Yankees’ home season began March 31, according to bond filings. Self-parking on game days costs $35, an increase of $12 over last year.(1)
  • The facility will not have sufficient operating revenue to make an interest payment on April 1, 2012, based on current projections, according to Steven Polivy, an attorney at Akerman Senterfitt LLP in New York, which represents Bronx Parking. That payment would need to be made out of the debt service reserve fund, he said.

***

  • The Yankees continue to draw consistently strong attendance,” Morgan Stanley executive director Pete Block said in a March 18 report. The Yankees attracted 1.4 million fans to home games this season through June 9, up 16 percent from 1.2 million in the same period last year, according to the Sports Network news service. The Yankees led all Major League Baseball teams in attendance last year at 3.77 million, according to ESPN.

For more, see Hedge Funds Target Yankee Stadium Parking-Garage Muni Bonds Near Default.

(1) With the No. 4 train (East Side) and the B and D trains (West Side) continuing to make stops (after all these years) at East 161st Street and River Avenue, and the MTA Metro-North Railroad's Hudson Line stopping at the Yankees' E. 153rd Street Station, who the hell wants to get clipped for $35 in self-parking.

Further, I'm sure it doesn't help the bondholders much that the Yankees, on their own website, promote the use of mass transit in traveling to and from The Stadium "without having to deal with the hassles of parking, tolls and traffic" and give the general public this advice:

Monday, June 13, 2011

Standing-Lacking Banksters Take Another Hit In Federal Bankruptcy Appeals Ruling

In a 46-page opinion, the Bankruptcy Appellate Panel of the U.S. Court of Appeals for the 9th Circuit handed the bankster industry its latest drubbing in an Arizona case, finding that the banksters in question failed to establish that, given the facts of the case, they both:
  • lacked standing to seek relief from the automatic stay, and
  • lacked standing to file a proof of claim.

In addition to setting forth the facts in the case, the opinion discusses the issues as it breaks down as follows:

  • A. Standing in Mortgage Cases:

    1. Constitutional Standing
    2. Prudential Standing
    3. Prudential Standing and the Real Party in Interest Doctrine
    4. Real Party in Interest Status and Its Policies

    B. The Substantive Law Related to Notes Secured by Real Property

    1. Applicability of UCC Articles 3 and 9
    2. Article 3 of the UCC and the Concept of a “Person Entitled to Enforce” a Note
    3. Article 9 and Transfers of Ownership and Other Interests in a Promissory Note

    C. Wells Fargo’s Lack of Standing to Seek Relief from the Automatic Stay

    1. Standing to Seek Relief from Automatic Stay
    2. Wells Fargo’s Argument Regarding Standing
    3. Wells Fargo’s Lack of a Connection to the Note

    D. AHMSI’s Lack of Standing To File Proof of Claim

    1. The Lack of Findings on Central Issues
    2. Analysis of the Record and AHMSI’s Status as a “Person Entitled to Enforce” the Note

As referenced earlier, the opinion is 46 pages, so for those who are interested in this kind of stuff, you'll need to set aside some time to digest this ruling.(1)

For the ruling, see Veal v. American Home Mortgage Servicing, Inc. (In re Veal), BAP Nos. AZ-10-1055-MkKiJu, AZ-10-1056-MkKiJu, Bk. No. 09-14808 (9th Cir. BAP June 10, 2011).

Thanks to Mike Dillon at GetDShirtz. com and Deontos for the heads-up on the ruling.

(1) In the following selected excerpt, the court identifies one of the problems that, while it may not have directly impacted on the court's ruling, exists in many cases throughout the country: an assignment of mortgage that doesn't also assign the promissory note (while, in most jurisdictions, the general rule is that a mortgage follows the note that has been assigned, the note does doesn't follow the mortgage when only the latter is assigned) (bold text is emphasis contained in the ruling):

  • The purported assignment from Option One to Wells Fargo was different, however, and more limited. It purported to transfer

    the following described mortgage, securing the payment of a certain promissory note(s) for the sum listed below, together with all rights therein and thereto, all liens created or secured thereby, all obligations therein described, the money due and to become due thereon with interest, and all rights accrued or to accrue under such mortgage.

    Thus, unlike the assignment from GSF to Option One, the purported assignment from Option One to Wells Fargo does not contain language effecting an assignment of the Note. While the Note is referred to, that reference serves only to identify the Mortgage. Moreover, unlike the first assignment, the record is devoid of any indorsement of the Note from Option One to Wells Fargo. As a consequence, even had the second assignment been considered as evidence, it would not have provided any proof of the transfer of the Note to Wells Fargo. At most, it would have been proof that only the Mortgage, and all associated rights arising from it, had been assigned.7

In footnote 7 of its ruling, the court elaborated on the foregoing with this observation, one which may be helpful to those trying to convince a trial judge that a mortgage assignment doesn't operate to transfer the promissory note it secures unless the language of the assignment explicitly provides for such a transfer (bold text is my emphasis):

  • One might argue that the clauses in the assignment which follow the italicized appositive phrase are broad enough to pick up the Note, and thus effect a transfer of it. They do, after all, purport to transfer “all rights therein and thereto, . . . all obligations therein described, [and] the money due and to become due thereon with interest.”

    But given the carve out of the Note at the beginning of the sentence, the relative pronouns “therein,” “thereto,” and “thereon” more naturally refer back to the obligations contained in the Mortgage itself, such as the obligation to insure the Property, and not to an external obligation such as the Note. It would be odd indeed if, after referring to the Note but not explicitly making it the object of the transfer (as the initial assignment from GSF did), the words were made to curl back and pick up the Note just because the Mortgage mentioned the Note among its many terms. Although the clauses might be sufficiently vague to permit parol evidence to clarify their intended meaning, no such evidence was offered or requested.

Recent Michigan Court Ruling Slamming MERS Means More Headaches For Banksters Defending Securitization Process

The Wall Street Journal reports on the recent slamming of MERS by an Ann Arbor, Michigan trial judge in ruling on a recent paperwork screw-up that will be the source of great headaches to banksters defending the flawed securitization process by which they transferred mortgage loans to investors:
  • Last week, we wrote about how borrowers and courts have uncovered potential defects that could make it harder for banks to foreclose on certain homeowners whose loans were bundled together and sold as securities.
  • On Monday, a Michigan judge overturned a foreclosure after concluding that the foreclosing entity couldn’t have owned the mortgage after it failed to comply with certain mortgage securitization rules.

***

  • The decision is a possible setback for the securitization industry, which has argued that its transfers of mortgage loans are valid under the Uniform Commercial Code, which governs commerce across the nation. The Michigan court ruled that the specific securitization agreements didn’t comply with New York trust law, which superseded the UCC because it governs most so-called pooling and servicing agreements. (For more, see this write-up by Naked Capitalism.)

***

  • Potentially more troubling is the fact that investors in the mortgage bond deal didn’t actually own the loan that it believed it did. Securitizations are governed by very specific rules to ensure that they wouldn’t run afoul of special IRS rules designed to make mortgage-backed securities investments tax exempt. The case follows a similar decision by an Alabama trial court judge in March.

For more, see In Michigan Case, Securities Trip Up Foreclosure.

In a related story, see Naked Capitalism: Michigan Court Relies on New York Trust Theory, Rules Loan Never Made it to Trust.

For the Michigan court ruling, see Hendricks v. U.S. Bank Nat'l Association, Case N. 10-849 CH (Washtenaw Cty. Trial Ct., June 6, 2011).

Unsophisticated Lender Not a "Foreclosure Consultant", Dodges Liability On '11th Hour' Usurious Loan Made To Save Homeowner Facing Foreclosure

In a recent court ruling, a California Court of Appeals recently let an unsophisticated lender off the hook for liability on a usurious loan made to save a financially strapped homeowner about to lose her home at a foreclosure sale, agreeing with the trial judge that the lender lacked a usurious intent.

The appeals court also affirmed the trial court ruling that the unsophisticated lender did not fall within the definition of a "foreclosure consultant" under the California Mortgage Foreclosure Consultant Act (Civ. Code, § 2945 et seq.) and, accordingly, that statute was inapplicable to the subject transaction.

In each case, the issue centered primarily on the fact that the lender, one Richard T. Homem, was an individual unsophisticated in real estate matters, and was unfamiliar with the formal process of making a secured loan when entering into the loan agreement with one, Lisa Charter, the homeowner facing foreclosure.

The appeals court provides this description of what happened (the reference to one, Hjerpe, is a reference to the homeowner's attorney) (bold text is my emphasis):
  • At the time Homem made the loan to Charter, he was unaware of the terms of the promissory note. Those terms, including the length of the loan, the $15,000 fee, and the 8 percent interest rate, were supplied by Charter as approved terms from previous loan negotiations. Homem was unaware his loan would cover liens on Charter's property until after payment of the USDA mortgage and execution of a deed of trust in his name. Homem was told, and at all times believed, that the terms of the note were fair.

    Homem was not knowledgeable or experienced in loaning money. He had never loaned money for a promissory note, and was previously uninformed about the process. Homem paid Charter's defaulting mortgage before obtaining a promissory note or deed of trust to secure repayment.

    He is not an attorney or real estate broker, and holds no professional licenses of any kind. The promissory note was drafted by Hjerpe. Homem considered Hjerpe to serve as both his and Charter's attorney throughout the entire process, relied on his advice, and expected to be protected by him. These circumstances support the conclusion that Homem lacked a usurious intent.

Further, Homem's involvement in this matter appeared to occur innocently enough. His relationship with the homeowner that led to the transaction in question began by the latter's grandmother hiring Homem to do yard work around the house.

Upon finding out the house was in foreclosure, Homem asked the homeowner if she was interesting in selling it, to which she replied in the negative, and Homem initiated no further discussion on his inquiry. Eventually, it was the homeowner who began bugging Homem for a loan, which he was reluctant to make, after her attempts to refinance failed while the scheduled foreclosure date continued closing in on her.

According to the appeals court:

  • The trial court correctly found that Homem does not qualify as a foreclosure consultant. In so concluding, the trial court cited its finding that he did not intend to enter into a usurious transaction. We have already rejected Charter's challenge to this finding. (See pt. II.B., ante).

    Additionally, at the time of the June 2007 loan, no agreement required Homem to perform any of the listed services for compensation for Charter. Indeed, Homem had never made a loan or obtained a deed of trust before and was unaware how to conduct secured real estate transactions. The only agreements signed between Charter and Homem were the deed of trust and the promissory note, both of which were signed after the June 2007 foreclosure sale had been halted.

    Further, Charter's three calls to Homem for help the day before the USDA foreclosure sale and his reluctance to make the loan supports an inference that Charter solicited his help, and not vice-versa. The record satisfies us that Homem did not act or perform in a manner consistent with the statutory definition of a foreclosure consultant.

Further, in footnote 4 of the opinion, the appeals court made this observation on the trial court's ruling:

  • It also noted Homem could have denied Charter's requests for a loan and proceeded as a bidder at the June 2007 foreclosure sale. Instead, he tendered a cashier's check for the full amount of Charter's defaulted mortgage prior to the execution of documents to protect himself.

What triggered this litigation was that the homeowner ultimately went into default on the mortgage payments to Homem, at which point he foreclosed on the home and took title to it at a foreclosure sale.

For the ruling, see Charter v. Homem, No. A129519 (Cal. App. 1st Dist., Div. 4, June 8, 2011) (unpublished).

Court Slams Foreclosure Defense Attorney For $39K+ For Filing Unsupportable Affirmative Defenses To Improperly Delay Proceedings

A recent ruling by a Florida appeals court appears to be a warning shot to all attorneys involved in foreclosure litigation in Florida (both the plaintiff and defense bars) that they had better get up to speed on the workings of Section 57.105, Florida Statutes,(1) or run the risk getting slammed, as one attorney recently found out.

In it, the 4th District Court of Appeal affirmed a lower court ruling belting a foreclosure defense attorney for $18,682.99 in delay damages for filing affirmative defenses on behalf of a defendant/homeowner in a mortgage foreclosure action that the trial court said were unsupportable by the material facts and were filed primarily for the purpose of unreasonable delay (the $18,682.99 represented the amount of interest that accrued on the borrowers’ note from the day the affirmative defenses were filed and asserted until the day they were stricken).

In addition, the trial court order also awarded the foreclosing lender costs and attorney’s fees in the amount of $20,563.59, and imposed the liability for this entire amount on the foreclosure defense attorney. This portion of the trial court order was not appealed, nor was the trial court’s finding that under the inequitable conduct doctrine, the foreclosure defense attorney is responsible for the full amount of attorney’s fees as opposed to a fifty-fifty split with the borrowers as would normally be required under section 57.105(1).(2)

One interesting point in this case is that the conduct that the attorney was accused of engaging in didn't seem to rise to the level sufficient to register a blip on the 'Richter scale' of bad faith conduct, at least not compared to the kind of crap that the attorneys slaving for the foreclosure mill rackets have been getting away with.(3)

It may be that the foreclosure defense bar can consider what this ruling stands for and incorporate it into their approach in defending their clients (by filing Section 57.105 motions against the foreclosure mills for the crappy paperwork they're submitting to the courts), because it sure as hell looks like the plaintiffs bar has already done so (by the way, the law firm representing the foreclosing lender - at least in this appeal - is not one of the legal lightweights that foreclosure mills generally tend to be; it is a heavyweight firm well known in Florida and well-respected throughout the state).
For the ruling, see Korte v. US Bank National Association, 4D09-4285 (Fla. App. 4th DCA, June 8, 2011).
(1) Section 57.105 was the subject of earlier posts relating to the claim for attorneys fees entitlement when an attorney successfully fends off an attempted foreclosure. See:
(2) According to the ruling, the trial court granted the homeowners' motion seeking to have the damages paid solely by the foreclosure defense attorney (during the litigation, the homeowner in foreclosure hired a new defense attorney) based on the inequitable conduct doctrine. In footnote 2 of its ruling, the appeals court gives this tidbit on the inequitable conduct doctrine:
  • "The inequitable conduct doctrine permits the award of attorney's fees where one party has exhibited egregious conduct or acted in bad faith. . . . [T]his doctrine is rarely applicable. It is reserved for those extreme cases where a party acts in bad faith, vexatiously, wantonly, or for oppressive reasons." Bitterman v. Bitterman, 714 So.2d 356, 365 (Fla. 1998) (citations and internal quotation marks omitted).

    In Rosenberg v. Gaballa, 1 So.3d 1149 (Fla. 4th DCA 2009), we held that the "inequitable conduct doctrine" was not rendered obsolete by the 1999 amendments to section 57.105. Id. at 1150.
See also, Moakley v. Smallwood, 826 So.2d 221 (Fla. 2002), and these links, for more on Florida's "inequitable conduct doctrine."

(3) According to the appeals court:
  • The trial court's order determining U.S. Bank's entitlement to sanctions included the following findings:The Court further finds that Mr. Korte was not acting in good faith based on representations of his clients since, as to Ms. Rivero, the record before the Court established that Mr. Korte never spoke with her. The record before the Court further established that Mr. Korte made no effort to review the documentation provided by Ms. Brandon which documentation was claimed to be the sole support for the defenses raised.

    Finally, as to both Ms. Rivero and Ms. Brandon, the records before the Court established that Mr. Korte never provided either with a copy of the defenses that he filed on their behalf and that upon receipt of the section 57.105 motion filed in this case, Mr. Korte made no efforts to verify with them the accuracy or veracity of the facts asserted in support of the defenses.

    These factual findings are sufficient in this case to describe "the specific acts of bad faith conduct that resulted in the unnecessary incurrence of attorneys' fees." See Moakley, 826 So. 2d at 227; cf. Finol v. Finol, 912 So.2d 627 (Fla. 4th DCA 2005) (reversing an award of sanctions based on the trial court's inherent authority because the proceedings and order were inadequate to support the sanctions imposed).

Palin May Face The Boot From AZ Home After Probe Reveals Ex-Alaska Guv May Be Holding The Bag w/ Robosigner-Created Crappy Title On Recent F'closure

In Salem, Massachusetts, NECN.com reports:
  • In the three years since the U.S. real-estate bubble burst, something we've learned is what a mess investment banks and mega-banks made as they took millions of shoddily documented mortgages and sliced and diced them into arcane Wall Street mortgage-backed securities in the 2000s.
  • Among the millions now apparently caught in the fallout: Republican icon Sarah Palin, the former Alaska governor and 2008 vice-presidential candidate turned media celebrity.
  • "The worst thing that could happen to Sarah Palin is she has a cloud on her title. She's going to have to go out, retain an attorney, and try to clean up the mess that the banks caused,'' John L. O'Brien Jr., the Salem-based Register of Deeds for Southern Essex County, sand in an interview with NECN Thursday.
  • In a worst-case scenario, a prior owner could challenge whether Palin now legally holds title to the property -- or Palin could be stuck with a legal headache trying to resell the house years down the road.
  • Working with forensic investigator Marie McDonnell, president of McDonnell Property Analytics Inc., O'Brien has found abundant evidence that the home a Palin trust bought in Scottsdale, Ariz., suffers from the same wretched Wall Street paper trail as millions of other U.S. homes where mortgages were converted into collateralized debt obligations and sold worldwide.
  • As Wells Fargo and JPMorgan Chase processed the mortgages, foreclosed on a previous lender, and resold the house to an investor who sold it to the Palin family, McDonnell said, at least two critical documents didn't get signed and three did get signed by "robo-signers" -- people apparently using fake names who churned out thousands of purported affidavits every day vouching for the bank that all the realty and mortgage paperwork was in order.
  • Two names that showed up on several documents connected to the Palin Arizona home were "Linda Green" and "Deborah Brignac," names used by multiple robo-signers purporting to be officials at multiple bank subsidiaries or business partners at Wells and Chase, O'Brien and McDonnell said.
  • In the case of Brignac signatures on Chase documents, "This is a shell game where Brignac purports to be vice president of three different entities so that she can manufacture the paperwork necessary for JPMorgan Chase Bank to hijack the mortgage and then foreclose on the property,'' McDonnell said.
  • "Linda Green," meanwhile, is a name O'Brien said he has found on over 6,000 documents in his registry signed in what appear to be at least 22 different hands, almost all of them easily recognizable by an average person as clearly forgeries.
  • O'Brien said, "If fundamental property principles still matter in this country, Sarah Palin may have legal issues that could affect the ownership of her home. Through no fault of her own, Sarah Palin has become a victim like thousands of others across the country that have the same problem with their chain of title. I feel bad for Governor Palin and all the homeowners who have been victimized by this scheme, it just goes to show you that no one is immune from this type of fraud and irresponsible behavior that these banks participated in."
  • "These banks have participated in a national epidemic of fraud that has clouded or damaged the chain of title of hundreds of thousands of American homeowners all across the country. Sadly, Sarah Palin's misfortune will however, hopefully shine the national spotlight on this issue. Given her position in the country, I am sure that she will use her influence to stand up for homeowners and their property rights".
  • JPMorgan spokesman Mike Fusco said the bank would decline to comment. Wells Fargo didn't respond to requests for comment. Wells and several other banks have faced lawsuits from people facing foreclosure who argue the banks can't solidly prove they held legal possession to a mortgage when the bank moved to seize the home from delinquent borrowers.
  • The big point O'Brien is trying to make is that while Sarah Palin may be among the biggest-name victims of shoddy bank paperwork, there are thousands -- if not tens of thousands -- of other people around New England facing the exact same problem as the former Alaska governor proving legal ownership of their homes. "She's experiencing the same problem that thousands of homeowners in my district are,'' O'Brien said of Palin.
  • Meanwhile, as of this week O'Brien has begun refusing to record documents from banks with "the names of notorious robo signers" like Linda Green. "When I see something that I know is fraudulent, I am no longer recording it,'' O'Brien said, and he hopes more deeds officials around the country will follow suit and crank up pressure on banks -- and prosecutors -- to finally clean out hundreds of thousands of bogus realty documents infecting the nation's real-estate industry.
  • Thursday afternoon, I couldn't reach an aide to Palin to see if she wanted to comment on this situation, or if she even knew about it. What's important to make perfectly clear: She hasn't done anything wrong or been accused of doing anything wrong with the Scottsdale home purchase. She's just bought a house that -- like all too many U.S. homes in 2011 -- official say has a very messed-up legal paper trail, thanks to a pair of the nation's very biggest banks and their Wall Street partners.(1)

Source: Mortgage mess victim: Sarah Palin?

Go here for a flowchart that maps out the origin of the crappy title on Palin's recent home purchase.

(1) For more on the crappy title problem in connection with improperly foreclosed homes, see:

Sunday, June 12, 2011

Gov't Oversight Committee Republican Chairman's Response To Democrat Requesting To Subpoena Servicers Over Sloppy Foreclosures: 'Hit The Road!'

Housing Wire reports:
  • Rep. Darrell Issa (R-Calif.) denied a request from Rep. Elijah Cummings (D-Md.) to subpoena mortgage servicers in an investigation into possible mishandled foreclosures.
  • Cummings, a ranking member of the House Committee on Oversight and Government Reform opened his investigation in February. In May, he sent a letter to Issa, chairman of the committee, formerly requesting to subpoena servicers that refused his requests for information.

For more, see Issa denies request to subpoena mortgage servicers.

Chase Begins Foreclosure Process On Active Duty Servicemember After Advising Him That Missed Payments Are Necessary To Qualify For Loan Modification

In Bend, Oregon, The Huffington Post reports:
  • In August, Tim Collette's son Aaron will spend 15 days on leave from Iraq. Aaron is 20 years old, and he's been in the Army for about a year and a half. A few weeks ago, his squad was hit with an improvised explosive device. Everybody survived, but it frightened both the soldier and his family. The Army told Aaron he could go anywhere he wanted. And of all the places in the world he could visit, Aaron wants to go home.
  • But Aaron might not have a home to come home to. Collette has been defending his house from foreclosure since 2008. It's currently scheduled to be auctioned off in July.

***

  • Tim said negotiating with his bank, JPMorgan Chase, has been a living nightmare. When he first asked for help in 2008, he had not missed any payments. At the time, his mortgage was being handled by Washington Mutual, a subprime lending specialist Chase purchased in the fall of 2008. Collette said WaMu told him he would only qualify for a loan modification if he missed two of his $1,100 monthly mortgage payments. So he missed the payments. And the bank began trying foreclose on him.
  • "They told me that you can't qualify for a loan modification without missing two payments, so I missed two payments, but I haven't gotten the modification," he said.

***

  • JPMorgan Chase and its CEO, Jamie Dimon, have spent months apologizing for illegally foreclosing on the homes of active-duty military members currently fighting in Iraq and Afghanistan. Soldiers have an extra layer of legal protection in mortgage lending. Even if you miss payments, a bank cannot evict your family while you fight for your country.

***

  • But that extra layer of legal protection does not apply to the parents of soldiers. Aaron wants to come home, but since the mortgage is in Collette's name, the family is left with the narrower legal protections of non-military families.

For more, see Foreclosed From Iraq: Father Seeks To Preserve Home As Son Fights Abroad.

See also, The Oregonian: Bend soldier serving in Iraq in dire need of closure, not foreclosure.

Accused Loan Modification Scammer Flees Town As Cops Tag Fugitive With 27 Felony Counts

From the Office of the Orange County, California District Attorney:
  • Law enforcement is currently seeking the owner of a Costa Mesa-based mortgage refinance company and escrow business who is charged in a large fraudulent rate-lock loan modification scheme targeting mostly out-of-state and some elderly victims.
  • To date, known victims are residents of California, Maryland, Minnesota, Florida, and Washington. The case was jointly investigated by the Orange County District Attorney’s Office (OCDA) and California Franchise Tax Board (CFTB).
  • James Toufic Assali, 36, Irvine, is charged with 18 felony counts of grand theft, three felony counts of grand theft of an adult over 65, four felony counts of money laundering, and two felony counts of filing a false tax return with sentencing enhancements for money laundering exceeding $50,000.
  • If convicted, he faces a maximum sentence of 23 years in state prison. An arrest warrant was issued May 26, 2011, for Assali, who is believed to be either in California or Vermont.
  • Assali is accused of owning and being responsible for the daily operations of Meredian Financial Corporation (Meredian) and an escrow business, Fortis Title Solutions. The two businesses operated out of an office in Costa Mesa, despite having a Florida billing address.

  • He is accused of targeting out-of-state victims, some elderly, by calling and soliciting Meredian’s home loan rate-lock and modification services for a fee ranging from $750 up to $10,000. [...] The defendant is accused of failing to complete a majority of home loan modifications or refinancing services retained by victims and refusing to issue refunds promised of the initial fees collected. [...]

For the Orange County DA press release, see Law Enforcement Seeks Fugitive Costa Mesa Business Owner Charged In Large Rate-Lock Loan Modification Fraud Scheme (Victims include residents of California, Maryland, Minnesota, Florida, and Washington).

Disbarred Lawyer Gets 5 Years In $600K Client Ripoff; Bar Examiner: Attorney Used Trust Account As His "Piggy Bank"

In West Palm Beach, Florida, The Palm Beach Post reports:
  • A lawyer who was raised by one of Palm Beach County's most respected attorneys but is the biological son of one of its most notorious murderers was sentenced Tuesday to five years in prison for bilking clients out of more than $600,000.
  • Without any show of emotion, A. Clark Cone, 56, pleaded guilty to grand theft and organized scheme to defraud. He was fingerprinted and taken into custody immediately.

***

  • While Cone's wife left the courtroom in tears, one of his victims said he had no sympathy. "We put all our trust in Mr. Cone," said Anthony DePrizio, who flew in from Boston to tell Circuit Judge Stephen Rapp how Cone's dishonesty prolonged the agony of a Riviera Beach car accident that nearly cost his wife her life. Instead of helping him and his wife recover money they needed for her care, he stole it. Cone's prison sentence offered him little comfort.
  • "I don't care if he serves one day. I just want my money," DePrizio said. Although ordered to make restitution, Cone appears to have no means to repay his clients.(1) He has been disbarred. His $540,000 home is in foreclosure. He was represented by a public defender.
  • He took a $500,000 settlement he negotiated for the DePrizios in 2005, prosecutors said. He kept $100,000 he received in 2006 to settle a lawsuit on behalf of a Miramar man who lost his wife in a plane crash. He also kept $38,940 awarded a Boca Raton woman he represented in a slip-and-fall case.
  • But the extent of his misdeeds are unknown. A paralegal who worked for him said many people, including a couple who claimed their son suffered neurological damage because he was misdiagnosed at two local medical centers, lost their ability to recover money because Cone failed to file court papers on time.
  • Further, an examiner for the Florida Bar, who audited Cone's books, reported that he didn't keep records to show whose money he kept in his trust accounts. It was clear that Cone used the accounts as a piggy bank, the examiner said.

For the story, see Attorney A. Clark Cone sentenced to 5 years for bilking law clients (Son of a notorious murderer is sentenced to five years in prison for bilking clients out of more than $600,000).

(1) The Florida Bar's Clients' Security Fund compensates people who have been victims of of misappropriation or embezzlement of cash or property by a Florida-licensed attorney. For those ripped off by dishonest attorneys in other states and Canada, see:

Maps available courtesy of The National Client Protection Organization, Inc.

Phoenix Cops Sound Alert On Scammers Hijacking Possession Of Vacant Homes In Foreclosure, Then Pocketing Cash From Duped Renters

In Phoenix, Arizona, The Arizona Republic reports:
  • Phoenix police are investigating a scam that has people pay a deposit on a rental home that turns out to be in foreclosure and not available for renting, Phoenix police said Thursday. The scammers are targeting people throughout the Valley, Phoenix police Sgt. Trent Crump said at a Thursday news conference.
  • One arrest has already been made in connection to four of these scams in Phoenix, Glendale and Avondale. Raul Juarez, 35, was arrested on April 16 in connection with the case.
  • Crump said the scam works like this: After breaking into foreclosed homes and switching the locks on the doors, scammers use the Internet to target potential home renters. They place ads on websites such as Craigslist and mostly involve month-to-month rentals with no credit checks. These scams also target people who have recently had homes foreclosed, Crump said.

***

  • There have been six known scams of this sort in Phoenix, Crump said. Other victims have reportedly lost between $800 to $1,900 per incident. Like the scammers, police used the Internet to track down Juarez. "If you put (ads) up there, it might be police that are responding to check or to verify now," Crump said.
  • Crump also warned renters to be aware of "red flags," [...]. These include supposed proprietors only accepting cash, not wanting a contract or having abnormally small deposits. Some scammers also might not have a vehicle around in case someone takes note of the license plate, Crump said.

For the story, see Phoenix police warn about foreclosure rental scam.

Go here for other posts on real estate-related hijacking scams. hijack

Insanity Finding For 'Dad-Killer' Could Salvage Son's Share Of Home, Inheritance From Dead Father's Estate

In Pinellas County, Florida, The Tampa Tribune reports:
  • In a murder case that gained national notoriety with its "Red Bull" defense, Thomas Coffeen now says it wasn't the energy drink that drove his brother to kill their father. [...] Coffeen doesn't believe his brother Stephen was sleep-deprived from energy drinks when he suffocated their father with a couch pillow in St. Petersburg two years ago.
  • He doesn't believe Stephen was legally insane at the time, either, though five doctors have concluded he was. The question will be decided [] by Pinellas Circuit Judge Nancy Moate Ley. Ley will rule on a plea deal worked out by attorneys for the defense and prosecution in which Stephen Coffeen, 42, would spend time in a state mental hospital rather than stand trial on a murder charge.
  • Thomas Coffeen is waging an eleventh hour campaign to persuade the judge to let a jury decide the case. Others also say Stephen Coffeen was sane when he killed his father, retired college professor Robert Coffeen, 83. [...] Thomas Coffeen says he believes his brother killed his father out of jealousy and thinks his brother planned the murder before coming here for a rare family visit from his home in California.

***

  • But others suggest justice for his father may not be the only reason Thomas Coffeen is pushing for prison instead of commitment to a state mental hospital for his brother. If Stephen Coffeen is convicted at trial, he won't get to split his father's inheritance of about $385,000 and a house.
  • If he is found not guilty by reason of insanity, on the other hand, he could walk away with his share.

For more, see Inheritance rides on whether father killer was insane.

For story update, see Son who suffocated St. Petersburg father judged insane:

  • A Pinellas County judge ruled [] that a man who suffocated his father with a pillow is not guilty by reason of insanity. Stephen Coffeen, 42, will be sent to the Florida State Hospital in Chattahoochee for the slaying in December 2009 of his 83-year-old father, Robert Coffeen, a World War II veteran who used a walker.
  • Stephen Coffeen will never stand trial in the slaying because of the ruling by Pinellas Circuit Judge Nancy Moate Ley. A court hearing on whether he should be released from the state hospital could be scheduled in six to seven months.

Saturday, June 11, 2011

Foreclosure Defense Attorney Shakes Another $3K Out Of BofA For Add'l Legal Fees & Costs Over Attempted Bogus Foreclosure On Home Without Mortgage

In Naples, Florida, The News Press reports:
  • Bank of America is caught up at last on its account with a Golden Gate couple who were sued by the bank for foreclosure even though they never had a mortgage, the couple’s attorney said today.
  • The bank cut a check [last week] for $5,772.88 to cover Naples-based attorney Todd Allen’s(1) $2,534 fee for defending retired Bay Village, Ohio, police Sgt. Warren Nyerges and his wife, Maureen, who were being foreclosed on by the bank.
  • That check also covers the expenses of the Collier County Sheriff’s Office. Two deputies showed up Friday at the bank’s Davis Boulevard branch in Naples with Allen and a court order authorizing them to remove property such as furniture from the bank for public auction if the debt wasn’t paid.
  • On Wednesday, Allen said the bank agreed to pay him $3,000 more for the expenses he incurred collecting the original attorney’s fees. “So BOA spent approximately $9,000 to solve a $2,500 problem,” he said in an e-mail.
  • Warren and Maureen Nyerges bought a house from Bank of America for $165,000 in 2009, paid cash and never had a mortgage. Somehow, the bank and its former attorney in the case, the David J. Stern law firm, believed the couple had a mortgage and was behind in the payments, Allen said.

Source: Bank of America settles up with Golden Gate couple's attorney, Collier sheriff's office.

See also, Naples Daily News: Attorney gets another $3,000 from Bank of America for bad foreclosure.

(1) Allen is associated with The Law Office of Conrad Willkomm, P.A., Naples, Florida.

Booted Foreclosed Homeowner Attempts To Fight Off Multiple Jail Threats Over Now-Dilapidated Former Home That Bank No Longer Wants

In Paulding County, Georgia, WXIA-TV Channel 11 reports:
  • It is 95 degrees in the shade, but 46-year-old Curtis Neeley, with high blood pressure and heart trouble, doesn't have time to rest. His old yard had to be cut by the close of business Wednesday or he could have gone to jail. Even now that it's done, he could still end up behind bars.
  • "Cutting the grass today is keeping me out of jail," he said, sweating in the oppressive heat. "But if the house doesn't get demolished in 14 days, I'm going anyway."
  • It's all part of an apparent snafu with the bank that Curtis and his attorney say took possession of the property during a foreclosure and bankruptcy two years ago. "I left the house two years ago," Neeley said. "The mortgage company came in and changed all the locks on the door so I couldn't get in."
  • After taking the Paulding County house -- and maintaining it -- the bank is now trying to foist it back on him, Neeley claimed, saddling him with the cost to tear it down; something he doesn't have the money to do.

***

  • The county says its goal is simply to get the property cleaned up, and unfortunately for Neeley, marshals consider him to be the owner. After trying to track him down for months, they finally located him on Facebook.
  • However, officials will likely now hold off on any further threat of arrest, at least until their lawyers can cut through the blur of the bank's role with Neeley's property.

For the story, see Facing arrest, man cleans up home he says isn't his.

War Against BofA Bank Branches Continues As Court Threatens To Throw Local Manager In Jail Over Lender's Refusal To Demolish Vacant Foreclosure

In Riverdale, Georgia, The Atlanta Journal Constitution reports:
  • A Bank of America branch manager in Riverdale faces jail time if the banking giant continues to ignore city orders to demolish a vacant, fire-damaged home. The bank, however, says it can’t comply because it doesn’t own the home.
  • Riverdale city officials have tried for more than six months to get the bank to tear down the dilapidated property, and the bank has ignored requests to appear in court, city attorney Deana Johnson said. “We’ve cited and served them with legal process and they’ve not come,” Johnson said.

***

  • On Wednesday, the bank hired the Atlanta law firm of McGuire Woods to handle the case. Meanwhile, the bank has racked up nearly $20,000 in fines, including a $500-a-day fine imposed several months ago.
  • A Riverdale City Court judge earlier this week ordered a June 28 hearing for the bank to show cause why the local branch manager should not be arrested for contempt, Johnson said, adding that the bank failed to appear in court in May despite city efforts to keep the branch manager apprised of the situation. [...] The house at 6878 Cedar Hill Court in Riverdale caught fire in December 2008, forcing the homeowners to move. The house ended up in foreclosure and was eventually taken over by Bank of America. (1)

For the story, see Vacant Riverdale home spurs court threats.

(1) Earlier this month, a branch manager in Naples, Florida was reportedly visibly shaken when local cops showed up to execute an asset seizure over the bank's failure to comply with a court order awarding a homeowner/couple payment of legal fees paid in connection with a failed BofA foreclosure action. See BofA's Refusal To Pay Court-Ordered Attorney Fees In Failed Foreclosure Leads To Bank Branch 'Raid' By Cops Seeking Asset Seizure To Satisfy Judgment.

Political Pamphlets Disguised As Eviction Notices Create Chaos Among Some Detroit Residents

In Detroit, Michigan, CBS News reports:
  • Residents in a Detroit neighborhood received a scare this week when they found what appeared to be eviction notices on their doors. The flyers, however, turned out to be political pamphlets in opposition to the construction of a controversial new bridge.
  • The fake eviction notices were posted by a local chapter of Americans for Prosperity, the conservative political advocacy group backed by Charles and David Koch, the billionaire brothers who run Koch Industries and are longtime libertarians. Local political leaders and columnists are condemning the group for scaring residents -- whose homes sit in the epicenter of the nation's foreclosure crisis -- while refusing to disclose which of its corporate backers are funding the flyers.
  • At the center of the flyer in question, in large print, reads: "Eviction Notice." In medium print, the top of the flyer reads, "This property is subject to seizure by the Michigan Department of Transportation."
  • Only in small print does the flyer say the property in question could be seized if legislation approving the bridge is passed.

***

  • Still, fake eviction notices had residents on edge. Resident Steve Toth told the Free Press his elderly mother saw the flyer and "damn near keeled over," while one of his neighbors was "beside himself." Scott Hagerstrom, American for Prosperity's Michigan state director, told the Free Press the group had no apologies for the flyer.

For more, see Koch-backed group's fake eviction notices rile up Detroit.

Go here for the fake eviction notice.

Tragedy Involving Deadly Bronx Firetrap That Lingered For Years In Foreclosure Spurs Crackdown On Illegally Converted Rooming Houses Throughout City

In New York City, Bronx News Network reports:
  • Mayor Bloomberg and the City Council announced yesterday that the city will be taking a new, more aggressive approach in identifying and inspecting apartment buildings suspected of being divided illegally.

  • At the end of April, a fire tore through an apartment building in Belmont and killed three family members who had been living there--Christina Garcia, 43, Juan Lopez, 36, and their 12-year-old son Christian Garcia.(1)

  • The early morning blaze broke out on the top floor of a multi-family building at 2321 Prospect Ave., a space that had been subdivided into several rooms using partitions, according to FDNY spokesman Frank Dwyer.

  • The tragedy has shined a spotlight on the proliferation of dangerous housing conditions in the Bronx, and across the city. Experts and elected officials say practices like illegal divisions, erected by both tenants and landlords alike, are frighteningly common and growing in number.


***
  • Sally Dunford, of the West Bronx Housing and Neighborhood Resource Center, called the problem “endemic.” She described some of what she’s seen in the community in recent years:

    1- already small apartments portioned off into even smaller ones, blocking access to the fire escape or stationed dangerously close to the building’s heating source;

    2- five people living in a basement with no bathroom or kitchen;

    3- an elderly couple living in a closet;

    4- tenants moving back into a property immediately after the city ordered them to vacate.

  • "People are more willing to do than to go to a shelter,” she said.

  • Landlords, meanwhile, who are struggling to make mortgage payments on the city’s ever-growing number of financially unstable properties can collect more rents if they can fit more tenants into a given space—even if it’s a fire hazard. People who are going under are much more likely to do stupid things,” Dunford explained.

  • The last known owner of the Prospect Avenue building where the fire took place, a used car salesman named Domingo Cedano, told the New York Times that he’d lost the building to foreclosure years ago.

For more, see Deadly Belmont Fire Points to Illegal Housing Dangers; City Launches Crackdown. subdivided
For the City press release, see Mayor Bloomberg And Speaker Quinn Announce New Approach To Target Most Dangerous Illegally Converted Apartments (Task Force Developed New Method Using Risk Analysis Model to Identify Properties Most at Risk for FireIn Pilot Test, 40 Percent of Targeted Properties Required Vacate Orders, Compared to Typical Rate of Three Percent).
(1) See Early Morning Bronx Fire In Illegally Converted Rooming House Leaves 3 Dead, 8 Injured; Firetrap Lingered In Foreclosure Since 2008.

Dubious Dealings Leave Nursing Home Chain Under Threat Of Collapse; 31,000 Elderly Residents Could Face The Boot

The New York Post reports:
  • Don't tell Blackstone Group chief executive Stephen Schwarzman that lightning doesn't strike twice. The New York billionaire private-equity kingpin has become the subject of a blistering attack in the British media after the country's No. 1 nursing home chain, formerly owned by Blackstone, has run into a financial iceberg -- possibly putting its 31,000 residents in danger of being booted from their homes.
  • The reports have blamed Blackstone for putting the chain, the 750-unit Southern Cross, in financial straits. "Former Southern Cross tycoon owns five houses worth $125.9M while 31,000 residents may have to leave their care homes," trumpeted a headline on the Daily Mail site on Sunday, referring to Schwarzman.

***

  • Private-equity firms that invested in Southern Cross split off the company's real estate from its actual nursing homes. This doomed the company as landlords increased rents and said they will not give the chain, which is losing money, a break.
  • This comes after the British government cut reimbursement for nursing home services, leading to the Southern Cross cash crunch. If the landlord and Southern Cross do not reach a compromise in about one month, there is a danger that the chain could collapse.

For more, see Don't kill granny (Schwarzman under fire in UK over retirees).

Extended Trips Away From Home Could Kill Property Insurance Coverage

In Tacoma, Washington, The News Tribune reports:
  • You’re a snowbird who spends six months in the Arizona sun and six months at your home here in the South Sound. Or you’re a homeowner with a mortgage that has gone underwater, and you’ve walked away from your loan expecting to face foreclosure. You’ve got homeowner’s insurance, and you think you’re covered.
  • Well, maybe not. Karl Newman, president of the Northwest Insurance Council, said this week that homeowners who fail to occupy their homes for 30 days or more could face significant insurance implications and serious financial risk.” Some policies, he said, “exclude losses caused by abandonment of a home or neglect when the home is left unoccupied for a specified number of consecutive days.”
  • Only recently – especially with an increase of foreclosures – has this facet of coverage become widely known, he said.
  • As long as people continue to own that home, they have liability,” Newman said. “We’re sounding the alarm. People may be without coverage and not know it. This could be a problem for people. We just don’t want them to be unaware.”

For more, see Little-known insurance clause can mean liability when leaving home.

Double Hit & Run Killer Gets Ultimate Prison Buy Out Deal; Dodges 20-45 Year Sentence, Gets 24 Months House Arrest At Luxury Hi-Rise Oceanfront Condo

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:
  • A privileged Illinois man who fled after running down two British businessmen in his speeding Porsche avoided prison [] and will instead serve out a 2-year sentence at a luxury oceanfront condo.
  • Ryan LeVin, 36, will be on house arrest at one of his parents' two condos at the Point of Americas on Fort Lauderdale Beach(1) – less than two miles from where he careened into the British visitors as they walked to their hotel two years ago. The house confinement will be followed by 10 years of probation. LeVin, who hails from a prominent Chicago family, worked out a deal to pay the victims' families an undisclosed sum.
  • The widows supported the sentence, and their attorneys collected checks from LeVin immediately after the [...] hearing, where he pleaded guilty to leaving the scene of a fatal accident and two counts of vehicular homicide.

***

  • Sentencing guidelines called for 20 to 45 years in prison, and prosecutor Stefanie Newman asked for 10 years. "He needs to go to prison,'' Newman said in court. "He needs to be penalized for his actions."
  • In imposing the lighter sentence, Broward Circuit Judge Barbara McCarthy said, "The need for restitution does outweigh the need for prison."
  • Both widows wrote letters to the judge, describing the "financial hardship" they've suffered since losing their husbands, who were the sole earners of their families. Watkinson left behind a wife, Kirsty, two sons, 5 and 21, and an 18-year-old daughter. Elford and his wife, Claire, had two young daughters.
  • The widows agreed to LeVin staying out of prison with certain conditions, including immediate payment to settle a civil wrongful death lawsuit they filed against him.

***

  • At the time of the hit-and-run, LeVin was on probation in Illinois for a 2006 high-speed chase in Chicago that injured a police officer and two motorists. He had multiple convictions in Florida, Illinois and Texas for speeding, disobeying traffic lights, improper lane passing, fleeing and eluding police officers, and cocaine possession.
  • Illinois officials will work with Florida authorities to have LeVin brought back to his home state, where he faces a parole violation stemming from the 2006 incident, an Illinois corrections spokeswoman said. Illinois will seek to have LeVin's parole revoked and have him sent back to prison.

For more, see Porsche hit-and-run killer gets house arrest in Fort Lauderdale oceanfront condo.

See also:

(1) Located on Port Everglades Inlet, Point of Americas boasts a "spectacular private beach,'' three fitness centers and luxury condos where residents can watch cruise ships from their terraces, the story reports.

Friday, June 10, 2011

Feds To Stiff Three Major Servicers On Cash Handouts Over HAMP Rules Violations

Bloomberg reports:
  • The U.S. Treasury Department will withhold financial incentives from three of the largest mortgage servicers after they failed to take required steps to prevent foreclosures under an Obama administration program.
  • Wells Fargo & Co., Bank of America Corp. and JPMorgan Chase & Co. were found to need “substantial improvement,” the Treasury said in a report [...]. The banks are being penalized for failing to meet rules set by the Home Affordable Modification Program, or HAMP, which pays servicers to lower monthly mortgage payments for distressed homeowners.
  • We don’t have the power to impose fines,” Tim Massad, acting Treasury Assistant Secretary for Financial Stability, told reporters. “We have the power to publicize what they’re doing. We have the power to withhold incentives. That’s what we’re doing.” [...] A fourth servicing company, Ocwen Loan Servicing LLC, also was cited for poor performance. The company won’t sacrifice its fees because it had acquired a large servicing portfolio during the testing period, the Treasury said.

For more, see BofA, JPMorgan Penalized by U.S. for Failing to Act on Home Foreclosures.

Ingham County Commissioners To Fund Effort To Fight Local Foreclosures Based On Dubious 'Docx' Docs

In Ingham County, Michigan, The Michigan Messenger reports:
  • A committee of the Ingham County Board of Commissioners unanimously approved a plan to fund an attorney that will be dedicated to helping homeowners battle the growing number of foreclosures based on faulty documents.
  • In a meeting Tuesday night, the General Services Committee of the Board approved a contract worth up to $60,000 for Legal Services of South Central Michigan. That money will be used to pay an attorney full time to work with county residents caught up in the burgeoning cases of foreclosures based on bad documents.
  • Those documents have been identified as robo-signed documents from the now defunct company Docx in Georgia. Curtis Hertel, Jr, the county’s register of deeds, discovered the documents after seeing a 60 Minutes report on the company.
  • Those documents, which Hertel says number more than 100, have been referred to both the Michigan Attorney General’s Office and the FBI. In addition, other questionable documents have been found, and Hertel says investigations into the documents are ongoing.

Source: Ingham County to fund attorney to help with foreclosures (Register of Deeds finds more than 100 cases of fraud).

Local Register Of Deeds To Banksters Recording Robosigned Docs: 'Take A Hike!' Says Those Creating Havoc To Chains Of Title Should Be Held Accountable

Firedoglake reports:
  • John O’Brien[, Register of Deeds]] of the Southern Essex District in Massachusetts, has decided to reject all robo-signed records coming into his office, forcing the entities wishing to foreclosure under his jurisdiction to file separate forms. Thigpen has backed up O’Brien on this announcement. Here’s the press release.

    Saying “the buck stops here” Massachusetts Southern Essex District Register of Deeds, John O’Brien, today rejected 2 robo-signed documents submitted to his Registry for recording and plans to continue doing so. “My Registry will not be a knowing participant in this fraud against homeowners. From today forward, lenders be on notice, the Southern Essex District Registry of Deeds will not record robo-signed documents.”

    The rejected documents containthe signatures of three known robo-signers, Linda Green, Korell Harp and Linda Burton. According to O’Brien, in his Registry he has 22 different variations of Linda Green’s signature and 5 different variations between Korell Harp and Linda Burton. “I find this practice very troubling on many levels. It has completely jaded my understanding that a notarized document was something that could be relied upon.” stated O’Brien. In Massachusetts, notaries must take an oath of office, under the pains and penalties of perjury. “If these documents are signed by anyone other than the noted signatories, these notaries and those that employed them should be held accountable for the fraudulent documents that they have produced and the havoc they have caused to chains of title everywhere.”

    Register O’Brien said, “Knowing what I now know, it would be a dereliction of my duties as the keeper of the records to record these documents and any other documents that contain questionable signatures. To do so, would make me a willing participant in a continuing scheme which has corrupted the chain of title of thousands of Essex County property owners. I have decided to put a stop to this reckless behavior and hold these lenders and their agents accountable for the authenticity of what they are attempting to record in my Registry. I do not believe this to be unreasonable.”

For more, see Register of Deeds O’Brien Rejects Fraudulent Foreclosure Documents.

Class Action Horror For Wells Fargo Pick-A-Payment Borrowers As $50M Settlement With Bankster Yields $96 Per Victim, $25M For Attorneys

The Reno Gazette Journal reports:
  • Ninety-six dollars. That's the compensation borrowers nationwide are set to receive for giving up their right to sue a leading lender for a controversial mortgage program critics call "deceptive" and "toxic."
  • The amount comes from a class-action lawsuit settlement that was granted final approval by a California district court in May. The lawsuit targeted a loan product known as "Pick-a-Payment," an adjustable rate mortgage (ARM) that allowed borrowers to make minimum payments for a limited time.

***

  • A closer look at the terms of the settlement, however, raises questions about just how fair the deal is for borrowers. High on the list is the amount of the financial compensation borrowers are set to receive.
  • "Wells Fargo is taking Pick-a-Payment customers buried in toxic mortgages and giving them less than $100," said Wayne Moon, a spokesperson for The Public Interest Law Firm (TPI), a Reno 501 (c)(3) nonprofit that also operates in Utah and California. "And they're getting away with it."

***

  • The firm [TPI] believes that [class action lead counsel] Arbogast & Berns and Wells Fargo purposefully withheld key information from class members to prevent any objections to the settlement prior to final approval. The firm also accused Wells Fargo of purposefully approving a large number of less favorable modifications while knowing full well that a settlement was in the works.
  • "Wells Fargo wants this thing to go through because they're getting away with a $50 million settlement for all the garbage they've done," Moon said. "Meanwhile, people are getting less than 100 freaking dollars while lead counsel is getting $25 million. It certainly shows you which parties stood to benefit from this settlement. It's certainly not the class members."

***

  • Now TPI is working to file an appeal against the class action settlement at the U.S. District Court for the Northern District of California, San Jose Division. The firm also filed a separate objection against the settlement.

***

  • "It's bad enough that homeowners can't get help when they need it," Moon said. "Now you have this crappy settlement that sets a precedent. Banks nationwide are watching to see if they can do this. They know they can mitigate their losses through civil litigation. It's criminal what they're doing and they're getting away with it. And our courts and complicit government is allowing them do so."

For more, see RGJ Investigates: Fraud case could give borrowers only $96.

Add One More F'closed Homeowner To List Of Those BofA Told To Miss Payments To Qualify For Loan Mod; Woman Was Current On Reworked Plan When Home Sold

In Santa Clara, California, the St. George News reports:
  • Bank of America foreclosed on a Santa Clara woman’s home, despite her doing everything she was instructed to do in order to prevent it. Annette Lake resided in her house in Santa Clara from 1986 until May 24, 2011, when Bank of America foreclosed on her home.
  • Just after her divorce from her husband was finalized in 2008, Lake was diagnosed with breast cancer. She was laid off from her job during chemotherapy treatments. She began having a hard time paying her mortgage, though she never missed a mortgage payment.
  • In 2009 Lake learned that the government had given banks money to assist people experiencing hardships. She called Bank of America, the holder of her home loan, to learn if she could refinance her loan so that her payments would be more affordable.
  • They told me they couldn’t assist me because I was paid up to date,” Lake said. “I had to be behind on my payments before they would give me assistance.” Bank of America representatives told Lake she needed to miss three mortgage payments in order to be eligible for assistance. Lake then missed three mortgage payments, as Bank of America instructed her to do.
  • After missing three payments, Lake’s home loan was remodified and her mortgage payments were lowered to $728.50 per month, which she paid on time each month. But in late June 2010, the day after her mother died, Lake came home to find a foreclosure notice posted on her house.

***

  • Though Lake continued paying her mortgage payments, Bank of America attempted to foreclose on Lake’s house again, and on May 24, the efforts were successful. Lake and her 19-year-old daughter moved out of her house, which has now been sold by Bank of America. Lake and her daughter moved into Lake’s father’s basement, where they share a bedroom.

***

  • The entire experience has given Lake a different outlook on life. “I honestly understand how people become homeless and how they give up and say they don’t care,” Lake said. “You get to the point where you don’t care. I get it. You just feel like saying, ‘Fine, you win.’”
  • Though she’s already lost her home, Lake is hoping to participate in a class action lawsuit against Bank of America.(1)I know I’ll never get my home back,” Lake said. “But hopefully there’ll be some repercussions, some reciprocation.”

For more, see Bank of America Forecloses on Santa Clara Woman After Telling Her to Miss Her Payments (Annette Lake lost her home after Bank of America told her to miss three payments so she would qualify for a remodification. Lake needed to remodify her loan after being diagnosed with breast cancer).

(1) Beware of "class action lawsuits bearing gifts." See Class Action Horror For Wells Fargo Pick-A-Payment Borrowers As $50M Settlement With Bankster Yields $96 Per Victim, $25M For Attorneys.

Northern California 'Hard Money' Racket Sinks Claws Into Local DA

In Nevada City, California, The Sacramento Bee reports:
  • His personal finances in disarray and his ability to do his job compromised, Nevada County District Attorney Clifford Newell sat in a local cafe, eyes welling, as he described how he became beholden to a loan broker who is under investigation for bilking investors.
  • A few years ago, Newell and his wife assumed crushing debts to keep their summer camp business solvent. Unable to get a conventional loan – "Neither of us were qualified," Newell said – they borrowed from what is called a "hard money" broker, the equivalent, some say, of a legal loan shark who uses others' money to make high-priced loans.
  • That decision inextricably linked Newell, the county's top law enforcement officer, to Philip Lester. That hard money broker has since been accused by investors of cheating them, leading to investigations by police, and now the state attorney general's office, for securities fraud.
  • A yearlong Bee investigation found that Newell, 54, received favorable treatment on his own loans from two hard money brokers. Documents show that one of them, Lester, tried to help the Newells avoid foreclosure and possible bankruptcy by raising money for a loan and misleading investors who contributed.

For more, see Nevada County DA Took Special 'Hard Money' loan favors.

Thursday, June 09, 2011

Michigan Trial Judge: Failure To Strictly Follow Pooling & Servicing Agreement, NY Trust Law Sinks Non-Judicial Foreclosure As To MERS Mtg Assignments

Buried in a recent Michigan story on the battle against foreclosure robosigners, The Michigan Messenger reports:
  • [A] judge in Washtenaw County ruled on Tuesday that foreclosures involving any title exchanges controlled by Michigan Electronic Recording Systems, Inc. (MERS) were improper. That ruling could void thousands and thousands of foreclosures in the state because it is likely the bank or mortgage company had no legal right to foreclose on the property.
  • Michigan law requires each mortgage assignment — which means company A sells the mortgage to company B — to be registered with the country register of deeds office. MERS marketed itself as a company that would keep track of the transfers, without all the fees associated with filing assignments. Many of the mortgages were sold over and over again, but the judge ruled that MERS had failed to keep an accurate accounting of the assignments.
  • In short, no one knew who exactly owned the mortgage, and thus had the right to foreclose. Hertel said his office was contacting those homeowners who were affected by the fraudulent foreclosures.(1)

Source: Ingham County to fund attorney to help with foreclosures.

For the ruling, see Hendricks v. U.S. Bank Nat'l Association, Case N. 10-849 CH (Washtenaw Cty. Trial Ct., June 6, 2011).

Thanks to Deontos for the heads-up on this story.

(1) Central to Washtenaw County Trial Court Judge Archie C. Brown's ruling was the bankster's failure to strictly follow with the terms of the Pooling and Servicing Agreement, as well as violations of the trust law of the State of New York in connection with the attempt to transfer the borrower's loan to the trust. Accordingly, Judge Brown declared the sale of the borrower's home through the use of a non-judicial foreclosure process to be absolutely void (ie. void ab initio).

It should be noted that one of the banksters named in the homeowner's lawsuit, the originator and original Lender of the Note and Mortgage, filed a counterclaim for judicial foreclosure against the homeowner, judgment on which was granted by Judge Brown.

Upstate NY Sale Leaseback Peddler Accused Of Using Various Aliases In Alleged Ripoff Racket Duping Strapped Homeowners Into Signing Over Home Titles

In Rochester, New York, the Rochester Democrat & Chronicle reports:
  • Anthony Cerame is a man of many names. Most of them are unusual; he's fond of Anthony Shablacone. Some are juvenile — he has signed documents as Joseph Damifino [read damn-if-I-know] — and some don't make much sense. According to court records, he has assumed the name Alphonse Portadori because it reminded him of an outhouse.
  • With all of these names, Cerame, who has lived recently in Ontario and Monroe counties and has an office in Gates, portrays himself as an expert in "distressed property" real estate. In the past year, he has been in court with three different lawsuits against him, and court records and testimony have detailed his various aliases.
  • What's left unanswered — and at issue now in the final pending lawsuit — is whether he uses the aliases for fraudulent purposes or, as he contends, for purely innocent reasons. Cerame said he needs aliases for security reasons, while those who have sued him instead allege that his shifting identities were part of a scheme to cheat them out of properties.
  • The two other lawsuits against Cerame were settled out of court last year. Pending still is a lawsuit by Irondequoit resident Cheryl Helfer; in that case, state Supreme Court Justice Evelyn Frazee is considering whether Cerame used fake names to set up fraudulent trusts for property ownership.

For more, see Man of many names target of civil suits.

F'closure Rescue Operator Gets 6+ Yrs For Running Racket Purporting To File Legitimate Lawsuits Pitting Borrowers & Banks Over Lending Law Violations

From the Office of the U.S. Attorney (Sacramento, California):
  • United States Attorney Benjamin B. Wagner announced that [] United States District Judge Lawrence J. O'Neill sentenced George Eggleston, 65, of Las Vegas, to six years and nine months in prison, to be followed by three years of supervised release.
  • Eggleston had previously pleaded guilty to charges he committed mortgage fraud and had operated a mortgage foreclosure rescue scheme to defraud homeowners facing foreclosure. The court also ordered Eggleston to forfeit $364,899, and to pay restitution to the victims of his offense. The actual amount of restitution has yet to be determined.
  • According to court documents, Eggleston, who did business as Nexxus and Global Legal Associates, admitted he told homeowners in California and elsewhere that he could save homes nearing foreclosure.
  • Through his websites, he falsely and fraudulently represented that his companies used and managed attorneys to file lawsuits against foreclosing lenders for violations of state and federal laws. Eggleston claimed that Nexxus could stop and reverse any pending or completed foreclosure. Victims each paid Eggleston $1,000 per month for his services, and in total Eggleston received more than $100,000 for his fraudulent scheme. Eggleston used the money for his own personal expenditures and not for the benefit of his clients.

For the U.S. Attorney press release, see Las Vegas Man Sentenced For A Foreclosure-Rescue Scheme And Mortgage Fraud.