NY AG Gets The Boot From Executive Committee Of Multi-State Foreclosure Fraud Probe As Iowa AG Joins Feds In Move To Continue Screwing Over Homeowners

Reuters reports:

• New York Attorney General Eric Schneiderman was removed on Tuesday from a committee of state attorneys general probing mortgage abuses, Iowa's attorney general said.



• Schneiderman's removal follows his statements in recent months voicing concerns over a proposed deal between major banks and a coalition of federal and state officials over claims of foreclosure abuses.



• "Effective immediately, the New York Attorney General's Office has been removed from the Executive Committee of the Robosigning multistate," an attorney in the Iowa Attorney General's office, which is leading the investigation, said in an email on Tuesday to other lawyers involved in the probe.



• The removal is the latest sign of discord between Schneiderman and the state and federal coalition on mortgage abuses. On Monday, the New York Times reported that the federal government was pressuring him to agree to a settlement with the banks over abuses such as submitting allegedly false documents to remove borrowers from their homes.

For more, see Schneiderman removed from committee (Iowa says New York has "undermined" gov't coalition).

See also, Feds To Sell Out Homeowners? Begin Arm-Twisting Campaign, Targeting NY AG, Others To Seek Support For Crappy, 50-State Foreclosure Fraud Settlement.

"Sima Schwartz Saga" Continues; Bay State Homeowner Scores Big Win In Continuing Battle With Banksters To Hang Onto Home As Court Voids F'closure Sale

A U.S. Bankruptcy Court in Worcester, Massachusetts has recently issued a ruling in the ongoing saga (at least five years, based on the filing of the initial bankruptcy petition in this case) of local homeowner Sima Schwartz and her battle against foreclosing international bankster giant Deutsche Bank in her battle to hang on to her home.

Primarily on the basis of the Massachusetts Supreme Judicial Court ruling in U.S. Bank Nat. Ass'n v. Ibanez, 458 Mass. 637, 941 N.E.2d 40 (2011), the court found that that Deutsche Bank inexcusably screwed up in bringing a foreclosure where, while holding the promissory note, it failed to acquire the mortgage from MERS and, consequently, U.S. Bankruptcy Judge Melvin S. Hoffman declared the foreclosure sale of Ms. Schwartz void.(1)

For the ruling, see In re Schwartz, Case No. 06-42476-MSH, Adversary Proceeding No. 07-04098 (Bankr. D. Mass. August 22, 2011).

For most recent prior post on the ongoing "Sima Schwartz Saga," see 'Ibanez' Issue Compels Bay State Bankruptcy Court To Vacate Unfavorable Earlier Ruling Against Homeowner Fighting Foreclosure.

(1) The court concluding its opinion with this nutshell:

• Having determined that MERS, and not Deutsche, held legal title to the mortgage on Ms. Schwartz's home mortgage as of May 3, 2006, when the notice of the foreclosure sale of her home was first published, it follows that Deutsche did not have the right to exercise the statutory power of sale and to foreclose the mortgage. See, e.g., Novastar Mortgage, Inc. v. Safran (may first require free registration to LexisOne Free Case Law; if not registered, TRY HERE) 79 Mass.App.Ct. 1124, 948 N.E.2d 917 (2011) (finding, in a post-foreclosure eviction proceeding, that the foreclosing entity had the burden to prove its title to the property by establishing that the mortgage had been assigned to it by MERS "at the critical stages of the foreclosure process.").
  
  By publishing notice of the foreclosure sale when it was not the mortgagee, Deutsche failed to comply with Mass. Gen. Laws ch. 244, § 14, and thus its foreclosure sale is void. Ibanez, 438 Mass. at 646-47.
  
  A declaratory judgment to that effect shall enter on count I of the complaint.

********************

Congratulations to Ms. Schwartz on this, and hopefully future success in this matter.

Freddie's Friendly, Subtle 'Warning' To Real Estate Agents On Short Sale Fraud: 'Don't Play A Role, Don't Look The Other Way!'

Housing Wire reports:

• Freddie Mac recently began reaching out to real estate associations and fielded more calls on a rising rate of fraudulent short sales. [...] Shelley Poland, a vice president at Freddie, and Robert Hagberg, the associate director of fraud investigations, said in a blog post Monday the mortgage giant sees short sale fraud on the rise as well — especially when real estate agents fail to disclose other parties involved in the transaction, who will rig sales at a low price and hide better offers from Freddie and the distressed homeowner.



• "Then, after the house is sold, the fraudster can flip it a few hours later for the better price and walk away with the profitable difference," the Freddie executives said.

***

• Short sales fraud is now the top priority for Hagberg's investigation unit. It began working with these real estate agents and law enforcement to detect suspicious activity before a deal closes. The unit also built an exclusionary list of companies and individuals who will can no longer do business with Freddie.



• The unit soon began seeing trends. Some agents provide false offers on a property to discourage legitimate bids and ensure accomplices get the property for a planned low bid. Others manipulate the listing price to make the house seem more problematic than it is by inflating repair costs and obtaining an artificially low broker price opinion.

***

• Others even skew the HUD-1 settlement statement, which itemizes fees, charges and other funds, to skim away proceeds from the short sale.



• Freddie now requires all parties in a short sale to sign an affidavit, holding them liable if investigators find the transaction wasn't done at arms-length.



• "There are many conscientious real estate professionals who want to do the right thing. We often receive calls in our servicing, quality control, fraud investigation, outreach, and HomeSteps divisions from real estate agents who know they've seen something inappropriate and won't look the other way,"(1) the executives said. "They understand that real estate fraud turns a shortsighted profit at the cost of the public's long-term confidence in homeownership and the housing industry."

For more, see Freddie Mac alerts real estate agents to rising short sale fraud.

See also, Freddie Mac: Teaming Up to Fight Short Sale Fraud.

(1) Real estate agents may want to note that, as a practical matter, they legally can't look the other way, at least not without opening themselves up to potential criminal exposure for misprision of a felony, a federal crime. See 18 U.S.C. §4:

• Whoever, having knowledge of the actual commission of a felony cognizable by a court of the United States, conceals and does not as soon as possible make known the same to some judge or other person in civil or military authority under the United States, shall be fined under this title or imprisoned not more than three years, or both.

A couple of dozen court cases decided in 2011 alone is an indicator that the Feds don't take too kindly to those who, when witnessing a felony, simply look the other away and engage in willful ignorance in an attempt to establish plausible deniability in the event law enforcement investigators question them in the future about their knowledge of a crime they've witnessed (this seemingly-convenient 'lapse' into a state of willful ignorance by those witnessing a bad act is referred to by some as 'pleading the dummy defense').

NJ Homeowner On BofA: "Better Going To A Loan Shark & Borrowing All That Money" After Getting F'closure Threat Despite Making Continued Full Payments

In Caldwell, New Jersey, The Star Ledger reports:

• As a real estate agent, Mark Conca has watched homeowners struggle to make their mortgage payments. He’s seen a lot of short sales and foreclosures in recent years, and he’s even assisted homeowners looking for mortgage modifications. He didn’t want to be one of them.



• But the distressed housing market put a major dent in Conca’s commission-based income. He said he still paid his bills on time, but his savings account was dwindling. He decided to approach his lender, Bank of America, to see if he’d qualify for a modification.



• After he applied, many months passed and Conca heard nothing from the bank. Knowing lenders had huge backups in modification requests, he remained patient. Conca, 41, continued to make the full payment on the mortgage for his Caldwell home, on time, every month.



• But that’s not what Bank of America said when it sent Conca a letter about its intent to foreclose. “I would have been better going to a loan shark and borrowing all that money,” Conca said. “At least with the street mafia, you know where you stand.”(1)

For the details of exactly what happened, see Homeowner says Bank of America foreclosure notice doesn't add up.

(1) Mr. Conca noted his frustration in dealing with BofA in this excerpt, which alludes to his seeking out media assistance to shine light on this bankster's practices:

• “The process was a disgrace and it took a threat from the media to get them to move? It annoys me that they have no respect for the common man,” he said. [...] “The least they can do is say now that they’ve screwed up, now that they caused me all this pain, they will modify my loan,” he said.

Woman Gets 11 Years For Swindling Elderly Couple In Foreclosure Rescue Ripoff Perpetrated While On Bail On Earlier Housing Scam Charge Targeting Nuns

In Santa Barbara, California, KEYT-TV Channel 3 reports:

• A local woman who stole money from an elderly Montecito couple was sentenced to state prison Monday. The Santa Barbara District Attorney's Office says a judge sentenced Denise D'Sant- Angelo, 56, to 11 years in state prison.



• D'Sant-Angelo was found guilty of financial elder abuse, grand theft and unauthorized practice of law in March 2010 while out on bail for stealing nearly $3,000 from a group of elderly nuns.

Source: Woman Sentenced In Elder Abuse Case.

See also, The Santa Barbara Independent: Nun Scammer Found Guilty of Financial Elder Abuse (Jury Convicts Denise D'Sant Angelo on 12 Felony Counts):

• A Santa Barbara jury [] found Denise D'Sant Angelo guilty of embezzling $30,000 from an elderly couple whose home was about to go into foreclosure.



• The bespectacled fraudster, convicted last year of lining her pockets with money meant to save housing for a group of nuns, convinced the husband and wife she was skilled in the ways of financial and legal maneuvering and could save their home if they paid her.

Feds To Sell Out Homeowners? Begin Arm-Twisting Campaign, Targeting NY AG, Others To Seek Support For Crappy, 50-State Foreclosure Fraud Settlement

The New York Times reports:

• Eric T. Schneiderman, the attorney general of New York, has come under increasing pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices, according to people briefed on discussions about the deal.



• In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement, said the people briefed on the talks.



• Mr. Schneiderman and top prosecutors in some other states have objected to the proposed settlement with major banks, saying it would restrict their ability to investigate and prosecute wrongdoing in a variety of areas, including the bundling of loans in mortgage securities.



• But Mr. Donovan and others in the administration have been contacting not only Mr. Schneiderman but his allies, including consumer groups and advocates for borrowers, seeking help to secure the attorney general’s participation in the deal, these people said. One recipient described the calls from Mr. Donovan, but asked not to be identified for fear of retaliation.


• Not surprising, the large banks, which are eager to reach a settlement, have grown increasingly frustrated with Mr. Schneiderman. Bank officials recently discussed asking Mr. Donovan for help in changing the attorney general’s mind, according to a person briefed on those talks.

***

• [A recent NY AG] lawsuit [to block a proposed $8.5 billion settlement involving the peddling of crappy mortgage-backed securities] angered Bank of New York Mellon, and as Mr. Schneiderman was leaving the memorial service last week for Hugh Carey, the former New York governor who died Aug. 7, an attendee said Mr. Schneiderman became embroiled in a contentious conversation with Kathryn S. Wylde, a member of the board of the Federal Reserve Bank of New York who represents the public.



• Ms. Wylde, who has criticized Mr. Schneiderman for bringing the lawsuit, is also chief executive of the Partnership for New York City. The New York Fed has supported the proposed $8.5 billion settlement.



• Other investors in the Countrywide mortgage pools who were not part of the settlement talks between Bank of New York Mellon and Bank of America have called the terms inadequate.



• Characterizing her conversation with Mr. Schneiderman that day as “not unpleasant,” Ms. Wylde said in an interview on Thursday that she had told the attorney general “it is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street — love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.”



• Mr. Schneiderman declined to comment on the encounter.

For more, see Attorney General of N.Y. Is Said to Face Pressure on Bank Foreclosure Deal.

See also, Editorial: It's A Flawed Settlement:

• The Obama administration has turned up the heat on Eric Schneiderman, New York’s attorney general, to go along with a proposed settlement with the nation’s largest banks over dubious foreclosure practices.



• Mr. Schneiderman should stand his ground in not supporting the deal. The administration says that a settlement would quickly deliver much needed relief to hard-pressed borrowers, but it’s doubtful it would provide redress on a par with the banks’ wrongdoing or borrowers’ needs.

Roof & Sinkhole Foreclosures May Be On Horizon As Changes In One Insurer's Underwriting Guidelines May Squeeze Some Florida Homeowners Onto Street

In Central Florida, The Tampa Tribune reports:

• Homeowners across Florida who are up for an insurance policy renewal with the state's insurer of last resort are receiving letters about their roofs. Anyone with a home 25 years old or older must get an inspection and prove to Citizens Property Insurance Corp. that their roof is expected to last at least three more years.



• Robert Brown says he thought he had a few more years to save money to put new roofs on his rental homes. But Citizens told him the roofs must be replaced now, or it won't renew his policies.



• "They're forcing people to put on a new roof, even if you have a few years of life left on the roof," Brown said. "This could force a lot of people into foreclosure, if they can't afford the roof and then lose their insurance." Replacing a roof on a typical home can cost several thousands of dollars.



• The relatively new requirement for the roof inspection comes on the heels of another controversial Citizens policy. The company recently said it's raising its rates for sinkhole coverage by 400 to 2,000 percent in some Bay area locations.(1)



• When it comes to the roof policy, some customers can't afford a new roof now and say they're letting their insurance lapse, local insurance agents said. "This couldn't come at a worse time," said Laura Hart, of Florian Insurance Inc. in Hudson. "This is the worst economy most of these people have seen in their lives." Hart said some customers are angry that their insurance company is taking away their chance to save longer for a new roof.

For more, see Citizens policy pushes some homeowners to add new roofs.

(1) See Residents rally in Pasco against sinkhole coverage hike:

• Al Kutchera said he'll be one of many residents abandoning their homes and leaving the state if Citizens Property Insurance fulfills its proposal to raise rates for optional sinkhole coverage. The plan increases rates by more than 400 percent on average statewide and more than 2,000 percent in some Bay area locations.



• "Nobody will buy the house, so I'll just let the bank have the house and look for a Realtor in South Carolina or Alabama or something," said Kutchera, who owns a home in Hernando County.

***

• State Sen. Mike Fasano, R-New Port Richey, organized the rally with consumer advocacy group Policyholders of Florida. Fasano said the issue is bringing together people from all over the Bay area and from all walks of life that wouldn't be able to afford the increased rates.



• He said a senior citizen came to his office because her mortgage company told her she had to have sinkhole coverage. The woman was in tears because she can't afford the coverage under the proposed rate hikes.

Title Search Failure To Disclose Subordinate Lien Leaves Lender Holding The Bag With Foreclosed Home Subject To Junior Lienholder's Claim

The following facts have been taken from a recent court ruling from a Memphis, Tennessee Federal Court:

1. Bank, a 1st mortgage holder, initiates foreclosure process against homeowner.



2. At the sale, Bank is the successful bidder and takes title to home.



3. At some point subsequent to the foreclosure sale, Bank discovered that a junior lien on the premises was not included in the title report prepared prior to the foreclosure sale.



4. Because Bank was unaware of the existence of the junior lien prior to the foreclosure sale, it failed to give the junior lienholder proper notice of the sale.



5. Because junior lienholder failed to receive proper notice of the sale, its lienholder's interest in the premises was not extinguished - it survived the sale.



6. Upon said discovery, Bank went to court and sought to rescind the foreclosure sale; to void the deed recorded pursuant to that sale; and to reinstate the foreclosed mortgage (actually, it was a deed of trust) and other liens as to the subject property.



7. In effect, Bank requested a chance for a 'foreclosure do-over' to undo the mess it now found itself in, holding title to a home encumbered by a lien that, prior to the foreclosure sale, was junior in priority to its own mortgage.

For the reasons set forth in his ruling, U.S. District Judge S. Thomas Anderson told Bank, in effect, 'tough luck' and refused to set aside the foreclosure sale, and left Bank holding the bag with a foreclosed home subject to the 'now-no-longer junior' lienholder's interest.

For the ruling, see Nationstar Mortgage, LLC v. Humphrey, No. 11-2185-STA (W.D. Tenn. July 29, 2011).

Sale Leaseback Peddler Gets 4 To 12 On Grand Larceny Plea For Duping Homeowners Into Signing Over Deeds, Then Stripping, Pocketing Their Home Equity

In New York City, the New York Daily News reports:

• The ringleader of a $2 million mortgage fraud scam targeting members of the city's Guyanese community has been sentenced to up to 12 years in prison. Roger Huggins, 36, pleaded guilty to a grand larceny charge in November for duping desperate homeowners into turning over the title to their homes so he could take out inflated mortgages and pocket the proceeds.



• Queens prosecutors say the four-year scheme defrauded homeowners and lending institutions of $2 million in equity stripped from properties valued at $8 million. Queens Supreme Court Justice Joel Blumenfeld sentenced Huggins to four to 12 years in prison Wednesday.



• "In unjustly enriching himself and his accomplices of millions of dollars, the defendant created a human tragedy of immense proportions for the homeowners who had turned to him in desperate hope of saving their homes from foreclosure," said Queens District Attorney Richard Brown.



• Huggins' Richmond Hill company targeted homeowners in Brooklyn, Queens and the Bronx.

Source: Mortgage scam leader Roger Huggins sentenced to up to 12 years in prison.

Cincinnati Feds Bust 4 Sale Leaseback Peddlers Accused Of Running F'closure Rescue, Equity Stripping Racket Targeting No Cash, High Equity Homeowners

From the Office of the Ohio Attorney General:

• A federal grand jury has indicted four people(1) who ran a Cincinnati real estate business known as American Equity Group (AEG) with fraudulently obtaining more than $13 million in loans through a loan fraud scheme that targeted homeowners or builders in or near foreclosure.



• Ohio Attorney General Mike DeWine, Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the indictment today. These agencies are members of the Greater Cincinnati Mortgage Fraud Task Force.

***

• According to the indictment, they conspired to locate distressed properties that were in or nearing foreclosure or that needed to be sold quickly. They would typically promise the sellers that they could continue to live in the property as a renter, then purchase the property back after AEG assisted the homeowner with repairing their credit.



• The defendants are accused of finding "investors" to purchase the property, often at inflated values, with the promise that the mortgage would be paid through rent payments from the original seller and that the original seller would purchase the property back within a short period.



• After the properties were stripped of any equity, they would be back in foreclosure again, and the distressed homeowners wouldn't have any standing in court because they no longer owned the properties. The "investors" who bought the houses were left with the debt.

For the Ohio AG press release, see Attorney General DeWine Announces Foreclosure Rescue Actions.

(1) According to the press release, the indictment charges Adam Moellers, 33; Gary Dailey, a.k.a Gary Klump, 32; Perry Bensick, Jr., 35; and Gary Dailey's mother, Mary Dailey, 50; all of Cincinnati, with wire fraud, mail fraud and conspiracy. The indictment alleges that the four worked together at AEG, which also operated under the names Equity Financial Solutions and Equity Financial Group, and carried out the scheme between July 2006 and October 2007.

Cal. AG Tags Alleged Nat'l 'Mass Joinder Lawsuit' Racket With Civil Suit, Shuts Down Operation That Attempts To Circumvent Upfront Fee Bans, Some Say

In San Francisco, California, the Los Angeles Times reports:

• California authorities have sued a group of lawyers and their associates, accusing them of fraudulently taking millions of dollars from thousands of homeowners by deceiving them into thinking they would receive relief on their troubled home loans.



• Atty. Gen. Kamala D. Harris said Thursday(1) that the California Department of Justice, in conjunction with the State Bar of California, sued Philip Kramer of Calabasas, the Law Offices of Kramer & Kaslow, two other law firms, three other lawyers and 14 non-lawyers.



• The defendants are accused of working to defraud homeowners across the country by deceptively marketing "mass joinder" lawsuits, which have hundreds or more individually named plaintiffs.



• At a news conference, Harris said the state would seek "fines, penalties, damages and restitution in potentially the tens of millions of dollars." She said the lawyers' assets had been frozen.

For the story, see Alleged foreclosure-prevention scam shut down by California.

For the lawsuit, see People v. The Law Offices of Kramer and Kaslow, et al.(2)

(1) See California AG press release: Attorney General Kamala D. Harris Sues Law Firms Engaged in National "Mass Joinder" Mortgage Fraud:

• The legal actions were designed to shut down a scheme operated by attorneys and their marketing partners, in which defendants used false and misleading representations to induce thousands of homeowners into joining the mass joinder lawsuits against their mortgage lenders.

***

• "The number of lawyers who have tried to take advantage of distressed homeowners in these tough economic times is nothing short of shocking," said State Bar President William Hebert. "By taking over the practices of four attorneys accused of fraudulent marketing practices, the State Bar can put a stop to their deplorable conduct as part of our ongoing effort to protect the public."
  
  It is believed that at least two million pieces of mail were sent out by defendants to victims in at least 17 states. Defendants' revenue from this scam is estimated to be in the millions of dollars.
  
  Defendants unlawfully paid commissions to their sales representatives on a per client sign-up basis, a practice known as "running and capping."
  
  The State Bar has seized the practices and attorney accounts of the attorney defendants: The Law Offices of Kramer & Kaslow; Philip Kramer, Esq; Mitchell J. Stein & Associates; Mitchell Stein, Esq.; Christopher Van Son, Esq.; Mesa Law Group Corp.; and Paul Petersen, Esq.
  
  Attorney General Harris is challenging the defendants' alleged misconduct in marketing their mass joinder lawsuits; her office takes no position as to the legal merits of any claims asserted in the mass joinder lawsuits filed by defendants.
  
  Victims in the following states are known to have received these mailers, or signed on to join the case. This is a preliminary list that may be updated: Alaska, Arizona, California, Colorado, Connecticut, Florida, Hawaii, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New York, Ohio, Texas, Washington.

(2) For the related court filings, etc., see:

• Consumer Alert ("IF YOU FEEL YOU ARE A VICTIM OF THIS SCAM: The CA State Bar has created dedicated, confidential hotlines for potential victims. Clients of Philip A. Kramer, call: 213-765-1672; of Mitchell J. Stein, call: 213- 765-1639; of Paul W. Petersen, call: 213-765-1641; of Christopher J. Van Son, call: 213-765-1658"),
• Exhibit 1 - Kramer & Kaslow web page,
• Exhibit 2 - Craigslist posting seeking salespeople to peddle services to homeowners,
• Exhibit 3 - Sample mailing sent to homeowners peddling services,
• Exhibit 4 - Sample mailing in the form designed to simulate an IRS Form W-2, 1099, etc. to peddle services to homeowners,
• Temporary Restraining Order, Asset Freeze, etc.,
• Photo 1 - Police Raid,
• Photo 2 - Police Raid.

Trio Pinched For Obtaining, Abusing POA From Frail, Vulnerable Senior To Pocket Proceeds From Loan Against 1st Home, Sale Of Vacation Home

In Hanover Township, Pennsylvania, The Express Times reports:

• A Hanover Township woman, her former fiance and her daughter are accused of conspiring to steal $260,000 from an 88-year-old Emmaus woman and failing to care for her medical needs.



• Penelope Veronikis, 49, and Barbara Paxos, 26, both of the 1200 block of Granite Drive in Hanover Township, Northampton County, and Hristos G. Dimou, 49, of the 3700 block of Church View Road in Upper Milford Township, depleted Queen E. Hersh's assets -- including a Poconos vacation home, bank accounts and her Emmaus home -- for their own pleasure from June 2006 through August 2008, police said.



• The trio was charged [] with dealing in proceeds of unlawful activities, criminal conspiracy, theft and related offenses. Veronikis and Dimou are also charged with reckless endangerment.



• Hersh, who was 88 when the thefts began, died at age 90 in December 2008. She lived in Emmaus in a home she owned free and clear with her sister, Ella Crawford. Crawford worked as a waitress and supervisor at the Emmaus Diner owned by Dimou, police said.



• In 2006 Crawford became ill and died. She was the lone caretaker for Hersh. Both women were widowed and neither woman had any children, police said. According to court papers, Crawford asked Dimou to take care of Hersh, and he agreed.



• Two days after Crawford's death, police said, Veronikis took Hersh to a Bethlehem attorney, Ewalde Cook, who prepared a power of attorney document.

***

• Veronikis allegedly used her power of attorney to take out a $50,000 mortgage against Hersh's Emmaus home in 2007 and never made a payment on the loan. According to court papers, Veronikis' hold on Hersh unraveled after Hersh was served with a foreclosure notice in July 2008. Hersh, distraught and confused, went to a neighbor to help explain the foreclosure notice since she had not had a mortgage for more than 20 years, police said. The neighbor referred Hersh to attorney Karl Longenbach. Longenbach's office investigated Hersh's case and dissolved Veronikis' power of attorney and destroyed the will naming Veronikis as sole beneficiary.
  

For the story, see Hanover Township women, Upper Milford man accused of stealing $260,000 from elderly woman.

F'closed Homeowner Victimized By 'Mysteriously Disappearing' Loan Proceeds In Refinance Foul-Up Settles Suit; Score To Provide Downpayment On New Home

In Baltimore, Maryland, The Baltimore Sun reports:

• A Howard County man who lost his townhouse in a refinancing foul-up six years ago has settled the matter before trial, giving him enough money for a down payment on a new house, a lawyer in the case said.



• Kwaku Atta Poku, 59, a Ghanaian immigrant who runs a taxi business, settled with the Federal Deposit Insurance Corp. and a third party in the spring, a few months before his lawsuit seeking $34 million in damages and compensation was scheduled to go to trial in U.S. District Court.



• "I'm very grateful at least they got me something to start my life over with," said Atta Poku, who said he could not give any specifics about the settlement terms. Gerald M. Richman, an Ellicott City lawyer who acted as Atta Poku's co-counsel in the case, said he could not disclose details, but he said the settlement would "permit [Atta Poku] to make a significant down payment on a house." He said the lawyers in the case agreed to forgo their fees and accept only compensation for expenses.

***

• The federal agency became the defendant in the case when Washington Mutual Bank declared bankruptcy, Richman said. The bank insisted at first that the original mortgage was not paid off in a refinancing in 2001. Atta Poku's lawyers argued that the bank had mishandled the transaction, failing to ensure that the new loan was used to pay off the original mortgage of $97,500.



• Atta Poku continued to make his monthly payments, but could not prove that he had paid off the original loan. The bank foreclosed in 2005, eventually putting him, his wife and four children out of their house. In a court hearing early this year, the title company engaged in the refinancing agreed that Atta Poku had done nothing wrong.



• Early this year, after several of Atta Poku's lawsuits were dismissed on technical grounds, a federal judge ruled that Atta Poku was entitled to a trial. The proceeding was scheduled to begin this month, but the parties held a settlement conference by phone in May and the case was dismissed in June.

For the story, see Howard immigrant who lost home to mistake settles case (Atta Poku never missed a mortgage payment, fought in court for more than five years).

Judge Stays Lower Court 'Boot' Order; Reprieve For Widow Not Named On Title To Deceased Hubby's Home Refused Loan Mod; Says Notice Never Received

In Rochester, New York, the Democrat and Chronicle reports:

• A Rochester woman who was evicted from her home this spring and moved back in two months later, is again being evicted from the house. City Court Judge Melchor E. Castro today granted a warrant of eviction and told Catherine Lennon that she and the other occupants need to leave [] by Wednesday. “You have no legal basis to permit you to remain on the premises,” Castro said.



• Lennon was originally evicted from her home on March 28 after a court proceeding. She failed to pay her mortgage and was unsuccessful in renegotiating the terms of the loan. In May, Lennon moved back into the home without permission.



• Ryan Acuff, a member of Take Back the Land-Rochester, a group dedicated to “elevating housing to a human right,” fighting foreclosures and making mortgage companies renegotiate loans under some circumstances, said he was disappointed with the judge’s decision. “It never should’ve gotten to this point,” he said. “The problems can be worked out.”



• According to Acuff, Lennon had lived in the home for seven years, but struggled with mortgage payments after her husband, Jascha Lennon, died of brain cancer in 2008. When she tried to renegotiate the loan to lower the payments, the bank refused because her name was not on the deed and Jascha Lennon did not have a will that transferred ownership to his wife, Acuff said. Lennon then tried to get her name on the deed, but foreclosure proceedings were nearly complete. Lennon [then] claimed she never received a foreclosure date.

For the story, see Previously evicted woman told to leave home again.

For follow-up stories, see:

• WHAM-TV Channel 13: Judge Orders Hearing on Disputed Foreclosure:
  
  A Monroe County judge ordered(1) Countrywide Home Loans to show cause for evicting Catherine Lennon. Lennon was forcefully evicted from her foreclosed home in March. [...] Lennon claims she’s the victim of a Western New York foreclosure mill under federal and state scrutiny.(2) The lender has said it tried to work with her. Lennon has gotten support from the activist group, Take Back the Land Rochester, which has held demonstrations at the house. The group breaks into foreclosed houses and secretly moves people in.



• Democrat and Chronicle: City woman gets eviction reprieve:
  
  [S]tate Supreme Court Justice Ann Marie Taddeo signed a court order late Tuesday that halted the eviction pending a review of the underlying foreclosure action, which Lennon and members of the activist group Take Back the Land Rochester say was carried out under fraudulent circumstances.
  
  “Victory will be mine,” Lennon said at a news conference [...] as about 25 neighbors and activists applauded. Lennon can remain in the home at least until Aug. 30, when Taddeo has scheduled a hearing on the case to examine the claims of irregularities. "The entire (foreclosure) process is going to have to be justified now,” Lennon said.

Thanks to Bill Collins at Frontier Abstract, Rochester, NY for the heads-up on the story.

(1) Go here for Judge Taddeo's Order & Catherine Lennon's Affidavit in Support of Order To Show Cause To Vacate Default Judgment.

(2) According to the court order, the foreclosure mill involved is the notorious Steven J. Baum, P.C.

82-Year Old Great-Grandma Dodges Boot After Losing Home To Predatory Loan Foreclosure As Advocates, New Buyer To Continue Resolution Discussions

In Bedford Stuyvesant, Brooklyn, the New York Daily News reports:

• An 82-year-old great-grandmother cried tears of joy Friday as nearly 200 neighbors rallied in her support on the day she was to be evicted. Mary Lee Ward was granted a reprieve when the owner of the Brooklyn house where she lives agreed to continue meeting with her lawyers next week.



• "Thank you, thank you," Ward cried out to supporters from the top step of the Bedford-Stuyvesant house where she has lived for 44 years. "You have to stick with it when you know your right," Ward told the cheering crowd. "Don't let nobody walk all over you."



• Ward, who fell victim in 1995 to a predatory subprime mortgage lender that went under in 2007, has been battling to stay in the Tompkins Avenue home for more than a decade.



• A city marshal was supposed to boot Ward from the one-family frame house Friday, but didn't show as her lawyers sat down with an assemblywoman and the home's owner. "The marshal will not be taking any action and we've reached an agreement that Ms. Ward can stay in her house," said Assemblywoman Annette Robinson.

For more, see 82-yr.-old great-grandmother won't be evicted from Brooklyn home; 200 neighbors show support outside.

Go here for on-location video of the protest of the eviction of Ms. Ward.

See also:

• The Village Voice: Crowds Gather Outside Home of Mary Ward, 82-Year-Old Bed-Stuy Resident Fighting Eviction;



• Showdown Looms In Elderly Predatory Loan Victim's Decade-Plus Battle To Hang On To Brooklyn Home Of 44 Years.

Minneapolis Resident Recovers Title To Foreclosed Home Lost Through Predatory Loan; Servicer Acknowledges Surprise Lock-Out Premature

In Minneapolis, Minnesota, the Star Tribune reports:

• Fine print filled the inch-thick stack of papers in front of Leslie Parks at a Maple Grove mortgage office Friday. But signing and dating each document was a task she was happy to take on. The papers meant that, after nearly two years of desperately clinging to a south Minneapolis duplex that had slipped into foreclosure when her mother was duped into an adjustable-rate mortgage, Parks finally owned 3749 Park Av. S.



• "Can you believe we're here?" asked a beaming Liz Peter, senior planner for Waterstone Mortgage. "I can, actually," Parks replied.



• The closing marked a happy ending to a painful saga that drew the attention of U.S. Sens. Amy Klobuchar and Al Franken, who pushed measures last year to protect consumers from the kind of predatory lending practices that had jeopardized Parks' house.



• It began in December 2009, when Parks arrived home from work during a blizzard to find that the locks had been changed on her mother's former duplex. Parks was in the midst of negotiating with lender OneWest Bank of Pasadena, Calif., to stay in the home after it had slipped into foreclosure the summer before.



• Her mother, Tecora Parks, had refinanced her fixed-rate mortgage with a subprime adjustable-rate loan to pay for city-ordered window upgrades for the rental property. OneWest Bank, recognizing it had made a mistake in changing the locks too early, contacted Peter to help Leslie Parks buy the duplex back from the bank.

For more, see After 2-year foreclosure battle, she owns Minneapolis home (After her mother's duplex was foreclosed following a predatory loan, Leslie Parks signed a mortgage on the south Minneapolis duplex).

BofA Begins F'closure On Elderly Couple For Paying Too Early On Loan Mod Payments After Telling Them Default Required For Payment Workout Eligibility

In New Port Richey, Florida, the St. Petersburg Times reports:

• Seventy-year-old Sharon Bullington may lose her home because she paid her mortgage a week early. That may not make much sense to the thousands of homeowners who are behind on their mortgages in Florida. But it seems it does to Bank of America, which has filed to foreclose on Bullington and her husband, James, 78, who is terminally ill.



• "It's like death to me," Sharon Bullington said, her voice quivering on the phone Friday. "My husband is bedridden. It's almost more than I can bear."



• The couple moved to Florida 15 years ago after James Bullington retired from General Motors in Flint, Mich., and moved into the 1,591-square-foot New Port Richey home, which is now valued at $133,464, though they owe about $177,000.



• When James became ill, the couple encountered financial difficulties because of high medical bills. The couple asked Bank of America to modify the loan. There was a catch. The couple would have to first officially default on their $1,400-a-month payment. The couple did that and entered into the modification plan, which reduced their payment to $916.



• Sharon Bullington made the January payment on Dec. 23, and the bank accepted the money, according to court records. The next month, she made the February payment over the phone. Weeks later, the money had not been withdrawn from her bank account. After Bullington asked the bank about it, a representative told her she had punched in the wrong routing number. In March, the bank kicked the couple out of the modification plan.



• Bullington pleaded for help in a June letter to Bank of America president Brian Moynihan and U.S. Rep. Gus Bilirakis, R-Palm Harbor. One of Moynihan's aides, Ana Olivera, told Bullington the foreclosure could not be stopped. She wrote in a two-page letter that the payment due on Jan. 1, 2011, had been made in December.



• "In accordance with the Trial Payment Letter dated December 15, 2010, it indicates that if you are not able to make each payment in the month in which it is due, you will not be eligible for a modification under the Home Affordable Modification Program," the letter said.



• Olivera told Bullington she could avoid a foreclosure by selling the home in a short sale or by signing it over to the bank. The letter said the bank values Bullington's business and strives to provide exceptional customer service. "I understand that you may be disappointed with our final resolution and appreciate the opportunity to clarify this matter," Olivera wrote. "While this may not be the response you were hoping for, I trust I have addressed your concerns."



• Olivera, a California-based employee, declined to comment about the case when reached by the Times on Friday. Bank of America replied in an e-mail: "We are going to re-review the Bullington's case."



• The Bullingtons' lawyer, Shawn Yesner, said the case makes no sense because his clients did what the bank told them to do. In 10 years as a lawyer, he said, he has never seen such an outrageous letter. "I couldn't believe they would put that in writing," he said. "I had to read the letter three or four times. … Bank of America is putting her in a depressed state. She has never been behind on anything."

For more, see Pasco couple fear losing home to foreclosure for paying mortgage too early.

Police Supervisor Pinched After Complaint Triggers Probe Into Alleged Fraudulent Homestead Exemption Claim

In Key West, Florida, WPEC-TV Channel 12 reports:

• A Florida Department Department of Law Enforcement supervisor in Key West has been arrested on charges of grand theft and homestead exemption fraud. FDLE on Wednesday arrested Vincent Michael Weiner, 47, on a charge of grand theft, a third-degree felony, and homestead exemption fraud, a first-degree misdemeanor. FDLE reports Weiner has worked for FDLE since 1993, and is currently a supervisor in the Key West Field Office.



• FDLE's investigation began in April when its Office of Executive Investigations got a complaint alleging Weiner had falsified property tax documents relating to a homestead exemption for a property he owned in Monroe County. Investigators say Weiner was not living at the property he claimed as a homestead for the tax years 2007 to 2010.



• Weiner received at least $5,918 in tax exemptions to which he was not entitled, FDLE alleges. Weiner was booked into the Monroe County Jail. He has been placed on leave pending the outcome of the criminal proceedings and the pending administrative investigation.

Source: FDLE supervisor Vincent Weiner arrested on homestead fraud charge.

See also KeysNet.com: Prosecutor: FDLE agent's fraud no mistake:

• "There were a number of anonymous complaints to the Property Appraiser's Office," [Assistant Monroe County State Attorney Mark] Wilson said Thursday. "On at least two occasions, the office contacted him to make sure he was eligible, that he was not renting out the property."



• Weiner reportedly maintained that he was eligible to receive the tax break. "His denial of something we believe to be true" forms the basis of the case, Wilson said. "It's not like he forgot to call" to report his status had changed, Wilson said.

Indiana Government Officials Faces Questions Over 'Double Homestead' Exemption Claims

In South Bend, Indiana, the South Bend Tribune reports:

• South Bend's executive director of community and economic development, Jeff Gibney, claimed a homestead exemption on two separate properties in 2009 and 2010, according to information obtained by The Tribune.



• The exemptions applied in each case to a home on West Washington Street in South Bend and a condo on Columbia Avenue, in Rogers Park, in Chicago, according to St. Joseph and Cook county property tax records.In both Indiana and Illinois, a property owner is allowed to claim one exemption but no more, not even outside of the state. It must be applied to the person’s primary residence.



• “I’m not trying to cheat anybody at all,” Gibney said Friday. “I just didn’t know that I couldn’t do it (claim an exemption) in two states.(1)

***

• Gibney said he had rented a place in Chicago for about 15 years before buying the condo in 2008. His children attended school in the city and he visited on weekends. His primary residence is South Bend, he said.



• “I have to tell you, it never crossed my mind,” he said of the fact that he could not claim an exemption on both the Chicago and South Bend properties. “There is nothing intentional about me taking two credits. I just didn’t know that I couldn’t do that.”

***

• Earlier this year, the county signed a contract with SRI, a consultant to local governments on property tax matters. Utilizing the Homestead Verification Forms, the company collects on invalid exemptions in the county on the county’s behalf. It receives 20 percent of all taxes, penalties and fees for doing so.



• According to [county auditor Pete] Mullen, as of June 31, the county, in partnership with SRI, had collected $475,920 in back taxes related to invalid homestead exemptions. In addition, collection notices had been sent to a number of other property owners, he said, totaling $130,235.

For the story, see City official claims two homesteads.

(1) While it may be apparent that one person can't claim two homestead exemptions for separate homes, it isn't unheard of, and certainly nothing illegal, for a husband and wife to each make a homstead exemption claim on separate homes if such a claim is bona fide and made in good faith. For instance, and notwithstanding any 'BS' from a government official to the contrary, such is the case in Florida (of course, nothing stops the official with the authority to grant such a homestead exemption to willfully withhold a proper grant, forcing the homeowner to file a lawsuit that, even if successful, will be costly). See:

• Florida Administrative Code Rule 12D-7.007(7): "A married woman and her husband may establish separate permanent residences without showing “impelling reasons” or “just ground” for doing so.
  
  If it is determined by the property appraiser that separate permanent residences and separate “family units” have been established by the husband and wife, and they are otherwise qualified, each may be granted homestead exemption from ad valorem taxation under Article VII, Section 6, 1968 State Constitution.
  
  The fact that both residences may be owned by both husband and wife as tenants by the entireties will not defeat the grant of homestead ad valorem tax exemption to the permanent residence of each."
  


• Florida Attorney General Opinion AGO 75-146 (1975), Husband And Wife Maintaining Separate Residences May Both Qualify For Homestead Exemption;


• Florida Attorney General Opinion AGO 2005-60 (2005), Homestead Exemption -- separate residences and homestead exemption. Art. VII, s. 6, Fla. Const.


• Wells v. Haldeos, 48 So.3d 85 (Fla. App. 2d DCA, October 22, 2010).

Probes Into Fraudulent Property Tax Exemption Claims For Homestead Property Continue Attracting Attention

In Madison County, Mississippi, the Northside Sun reports:

• THE MADISON COUNTY Tax Assessor’s office has been investigating several ineligible claims for homestead exemption - including a few potential cases of fraud - that could yield more than $200,000.



• Tax Assessor Gerald Barber recently told the board of supervisors that his office had spent three months contacting and investigating residents whose homestead exemption claims looked suspicious.



• Homestead exemption decreases the assessed value of owner-occupied houses in Mississippi from 15 percent to 10 percent, thus decreasing the taxes on the home. For instance, a $200,000 house with homestead exemption would be assessed at $20,000 instead of $30,000 and the taxes would be $2,003.60 instead of $3,455.40. People who lie about homestead claims are subject not only to financial penalties but also charges of perjury and misdemeanor and felony charges.



• Barber gave a list to the board of supervisors that included 32 property owners who’d wrongly claimed homestead in 2010 - 12 who’d agreed to pay the bill after being notified, and 21 who had been unresponsive to the county’s efforts to reach them.

***

• Since Barber has the power to back tax up to seven years, his office has also sent notices to 24 property owners who wrongly claimed homestead between 2005 and 2009, some of whom were on this year’s list too. Eleven of them have signed the notices and agreed to the tax increase, and 13 have not. “Most of the people we found were uninformed,” Barber said. “They were not trying to be fraudulent. We’ve got a couple we’re not sure of, and that investigation is ongoing.”

For more, see County goes after false claims of homestead exemption.

3 Yrs. After F'closure Filing, Banksters' Lien Priority Fight Leaves Owner Of Long-Vacated Home Facing 'Foreclosure Limbo;' Misses Out On $40K Savings

In Berwyn, Illinois, NBC Chicago reports:

• Three years after filing foreclosure, one Berwyn resident says she's still unable to move on because her home -- and her credit -- are being held hostage by a pair of banks.



• "They're fighting over who has first position, who has the second position, who's entitled if the house sells, who gets the money first, who doesn't," explained Kathy Gillin.



• Gillin said she was emotional the day she moved out of her home. During the 15 years she owned it, many good memories were built. But when her mortgage rates skyrocketed and a bank wouldn’t modify her loan, she says her investment became a losing proposition.



• She opted to file for personal bankruptcy. "It was decided the best thing to do was file for bankruptcy and turn the house back over to the banks," Gillin said.



• But an unexpected obstacle was blocking her new beginning. The two banks holding liens on the home are fighting in court over a technical issue, holding Gillin up in the process.

***

• For many homeowners, the chance to live rent-free in a home they are losing could be a bittersweet gift. But no one told Gillin she could do that. She moved out and tried to move on. Had she stayed, she could have saved nearly $40,000.



• "It’s a nice house. It’s ridiculous it is empty," she said. "I want someone else to have the house if I can't have it. Why shouldn't someone else be able to paint it whatever color they want or play in the yard or put flowers in the yard?"

For more, see Homes Held Hostage in Foreclosure (Suburban homeowner can't get rid of the home she thought she'd already lost).

Protestors Briefly Commandeer Bankster's Corporate Headquarters On Behalf Of Homeowner On Brink Of Eviction Seeking Loan Modification

In Pasadena, California, the Pasadena Star News reports:

• A group of about 50 protesters Thursday overwhelmed security, jumped turnstiles and briefly commandeered the corporate headquarters of OneWest Bank. Members of Alliance of Californians for Community Empowerment and Service Employees International Union set up tents and blocked the narrow corridor in front of the employee elevators for several minutes as they chanted loudly in support of Rose Gudiel, who is on the brink of being evicted from her La Puente home.



• "I'm here because they refuse to meet with me," Gudiel said. "I believe I qualify for a loan modification, and they refuse to explain to me why I do not."



• Seven Pasadena police officers showed up to deal with the animated protesters, who ignored several requests to leave the private property. No arrests were made. The group finally agreed to leave when Vice President Brandon Latman agreed to meet with Gudiel and her family.

For more, see Protesters invade bank headquarters to protest foreclosure practices.

Cops Cuff, Haul Away 75-Year Old Foreclosed, Booted Homeowner After She Paid Attorney $5K & Followed His 'Legal' Advice To Break Back Into Premises

In Mill Valley, California, KGTV reports:

• A Southern California attorney accused of bilking distressed homeowners is facing felony charges and could wind up getting disbarred. The attorney is advising clients in Marin County and around the state to break into their former homes after losing them to foreclosure.

***

• KGTV was on-hand in October when [attorney Michael] Pines helped a family break back into their foreclosed home in Escondido, the same thing 75-year-old Mill Valley resident Ursula McComas said Pines told her to do after she paid him a $5,000 retainer. The Mill Valley Police Department later hauled McComas away in handcuffs.



• "It was just humiliating," McComas said. "I couldn't believe what was happening. It was so inhumane." The bruises that the handcuffs left were still visible on McComas.

For the story, see Attorney faces felony charges in foreclosure break-ins.

Electric, Gas Shutoff = Condemnation, Says City As Rent-Skimming Landlord's Failure To Pay Utility Bills Leads To Boot For Renters In 14-Unit Building

In Auburn, New York, The Citizen reports:

• Tenants at an Auburn apartment house were outraged Monday after Auburn code enforcement officials told them they had 24 hours to leave the property because the property owner failed to pay utility bills.



• Brian Hicks, the senior code enforcement officer for the city, said the apartment house at 7 Grover St. was condemned Monday afternoon because all the utilities were shut off due to unpaid bills.



• Without electric and gas, Hicks said the city has to consider all 14 apartments unsanitary and uninhabitable. “They have within 24 hours of the posting to leave,” Hicks said. “Anyone who doesn’t will be escorted out by police.”



• Tenants were frustrated with both the city and the property owner Monday. Many of the tenants said the city did nothing to help them find new or temporary accommodations.



• The tenants, who pay between $450 and $550 a month in rent, said utilities are included in their rent, and that it’s the property owner’s responsibility to pay for electric and gas.



• Tenant Cyndy Schultz said tenants can’t pay the bills themselves because they don’t have access to the account numbers. “I could see if the roof was falling in, if the pipes were leaking or if the building was collapsing, but none of that is happening here,” said Schultz, as she wiped away tears while trying to figure out where she will go. “I pay my rent, (the owners) are supposed to be paying the bills.”

***

• Schultz said her apartment is the only one that does not include electricity in the rent, but was told she still has to leave even though her lights are still on because the whole building is condemned. Lights in the rest of the complex were not working Monday.

For more, see Grover Street tenants evicted because of unpaid utility bills.

Mortgage Breach = Default On Bail Agreement, Says NJ Prosecutor In Move To Revoke Multiple-Slaying Suspect's Pre-Trial Release

In Newark, New Jersey, The Star Ledger reports:

• The Essex County Prosecutor’s Office has filed a motion to revoke Lee Anthony Evans’ bail, claiming the lead defendant in the decades-old slaying of five Newark teenage boys violated its terms by defaulting on a five-year commercial loan and failing to pay related property taxes. Last summer, Evans, 58, was released from jail after posting the $950,000 bail in the form of three pieces of property.

***

• In his motion seeking to revoke Evans’ bail, Essex County Assistant Prosecutor Peter Guarino cited a Wells Fargo Bank foreclosure complaint filed against the defendant in June. That complaint came after the entire balance of Evans’ loan on [one] property came due in June without him having paid off any of it, Guarino said.

***

• Because Evans "breached the terms of the mortgage agreement," Guarino wrote in his motion, he has also defaulted on one of the terms of the bail agreement, which was the "defendant’s ties to the community." Guarino added that the remaining two properties do not cover the bail amount.



• Superior Court Judge Patricia Costello in Newark has set a date of Aug. 26 to rule on the motion, which comes less than a month after she granted Evans the right to serve as his own attorney.

For the story, see Essex County Prosecutor's Office seeks to revoke bail for man accused in decades-old slaying of 5 Newark teens.

Rhode Island Federal Court Freezes Dozens Of Foreclosure Cases In Effort To 'Persuade' Banksters To Sit, Negotiate Payment Workouts w/ Homeowners

In Providence, Rhode Island, WPRI-TV Channel 12 reports:

• Rhode Island's new federal judge makes a decision that could affect dozens of Rhode Islanders facing foreclosure. Judge John McConnell, Junior has ordered the bulk of mortgage foreclosure cases in before Rhode Island's U.S. District Court to be put on hold, and for banks to try and negotiate with homeowners. 63 foreclosure cases in Rhode Island are affected.

***

• "It stops the banks and the services in their tracks," said George Babcock, a Pawtucket attorney who is handling the majority of the foreclosure cases. "It gives them opportunity to sit with the magistrate," Babcock said, "and with the bank or servicer to try and work out a reasonable deal." The idea Babcock says is to keep Rhode Islanders in their homes.

For the story, see Judge puts RI foreclosure cases on hold (Banks ordered to negotiate with homeowners).

See also, The Providence Journal: Judge McConnell orders banks, struggling borrowers to talk it out:

• In the past few months, dozens of cases calling into question the chain of ownership on mortgages and whether various companies have the right to foreclose on a homeowner have been transferred to U.S. District Court from state court.



• At Chief U.S. District Court Judge Mary M. Lisi’s request, all the federal court cases will be handled by McConnell in conjunction with U.S. Magistrate Judge Lincoln D. Almond.

Miami-Dade Cops: Suspected Loan Modification Racket Not A 'Civil Matter;' Criminal Probe Ends With 4 Busts In Alleged Ripoff That Victimized Hundreds

In Miami, Florida, WPLG-TV Channel 10 reports:

• Four members of a Miami company were arrested, accused of stealing $750,000 from hundreds of clients in a mortgage modification scam. Miami-Dade police said that during a six-month period in 2008 and 2009, Best Value Homes, Inc., at 7845 Coral Way, which billed itself as a mortgage loan modification company, used telemarketing to solicit perspective clients, telling them it could modify their existing home mortgages.



• Police said clients paid an upfront fee of $1,500 to $1,750 and signed a third-party contract giving Best Value Homes permission to negotiate the mortgages with the financial institutions.



• The company took the cash without completing any of the services, according to Miami-Dade police. Police were called to Best Value Homes, Inc., in February 2009 after about 15 people showed up at the company's office, claiming they were defrauded. The incident led to about 500 more claims of fraud and deception by the same people.



• The suspects, Ronald Rodriguez, 31, Zoar Rodriguez, 27, Kellyd Rodriguez, 32, and Berta Cabrera, 54, all of Miami, face charges of conspiracy to commit racketeering and organized fraud. If convicted of all counts, each could face up to 60 years in prison.

Source: 4 Arrested In Mortgage Modification Scam (Police: Company Took Cash, Didn't Perform Service).

Another Florida-Based Loan Modification Outfit Tagged With Civil Suit; Allegations Point To A Foreclosure Relief Scam Operation, Says Ohio AG

In Cincinnati, Ohio, Courthouse News Service reports:

• The Ohio attorney general says a Florida-based outfit called the American Residential Law Group is bilking Ohioans in a foreclosure-relief scam. Despite its name, nothing in the state's complaint indicates that the two men who run the business are lawyers.



• Ohio sued the Fort Lauderdale-based business and the two men who run it, Oscar Estevez and Joel Jacobi, both of Miami. The attorney general says the men charge $1,395 to $3,350 for their purported services in "debt adjustment," but "often failed to perform the services listed in the contract."

For more, see State Sues to Stop Foreclosure Scam.

For the Ohio AG lawsuit, see State of Ohio v. American Residential Law Group, Inc. et al.

Ohio Blogger Files 'Friend Of The Court' Brief With State Supremes In Foreclosure Case

Ohio FRAUDclosure reports:

• OHIO FRAUDclosure, an Internet "Blog Site," has submitted an Amicus Curiae (Brief) on behalf of ALL OHIO Homeowners in a landmark case US BANK NA v. DUVALL.



• This case and decision currently in front of the Supreme Court of Ohio - turn on the Question: To have STANDING, as a plaintiff, in a mortgage foreclosure action, must a party show that it owned the NOTE and the MORTGAGE when the complaint was filed?

For more, see Ohio FRAUDclosure blogger brief to Supreme Court of Ohio.

For the 'friend 0f the court' brief, see Merit Brief Of Amici Curiae Homeowners Of The State Of Ohio, And Ohiofraudclosure.blogspot.com.

For earlier post on the Ohio high court review, see Ohio Supremes To Decide Whether Foreclosing Party Must Own Both Note, Mortgage At The Time Complaint Is Filed.

R/E Operator Uses Defaulted HELOC, Non-Judicial F'closure To Snatch Control Of 200-Unit NYC Bldg. Out From Under Landlord Current On 1st Mtg Payments

In Jamaica, Queens, The Real Deal reports:

• In a strategy that many insiders say was highly unusual (and very creative), the Bluestone Group wrested control of a 200-plus-unit apartment building in Jamaica, Queens, by getting its hands on the owner's line of credit. The property owner had taken out both a first mortgage and a revolving line of credit from a regional community bank. While the owner never stopped making payments on its mortgage, it defaulted on the line of credit about a year and a half ago.

***

• To recoup the money it was owed on the line of credit, the regional bank sued in State Supreme Court, and won a judgment against the borrower earlier this year. Because the line of credit was secured by the owner's 51 percent stake in the Jamaica apartment building, the bank could have taken control of the property. But banks are often reluctant to engage in messy real estate battles. So when Bluestone got wind of the judgment, it approached the bank to buy the line of credit.

***

• Eli Tabak, a principal with Bluestone, said he first learned of the defaulted line of credit through the special assets department at the community bank. Tabak noted that one advantage to purchasing an equity interest is that competing investors are less keen on doing the same, since it's considered a risky play. "People are afraid to buy high in the capital stack, so the paper is not worth that much," Tabak said.

***

• Tabak declined to disclose how much he paid. But once he had the line of credit in hand, he was able to foreclose on the equity (rather than the real estate, as most foreclosures do). Bluestone was also able to foreclose much faster than a standard property foreclosure.



• In mid-June, Tabak held a nonjudicial foreclosure sale in his attorney's office. Such a foreclosure provides fewer protections for the borrower and is less regulated than a standard foreclosure. There were no other bidders.



• And, as the new owner, Tabak will be responsible for paying the in-place mortgage. The whole process, from buying the debt to foreclosing, took him only about a month.



• "It's actually much simpler," said Edward Harris, an attorney in the real estate department at law firm Cozen O'Connor. Still, there are downsides to a mezzanine or other equity foreclosures. "You have all the warts, all of the mechanic's liens [and other liens], but when you foreclose on the first mortgage you extinguish most liens and other encumbrances. Some things, like unpaid taxes, survive foreclosure, of course," Harris said.

For the story, see Foreclosing on the equity, not the real estate.

Daughter-In-Law Accused Of Duping Elderly Homeowner Into Signing Refinance Papers, Pocketing $100K, Stiffing Bank, Leaving Senior Facing Boot

In Cottonwood Heights, Utah, ABC 4 News reports:

• A 91-year-old Cottonwood Heights woman is days away from losing her home of almost 50 years. [...] Gene Call is reeling from the revelation that she was duped. It first came to light last year when she got a foreclosure notice.

***

• Her daughter-in-law told Gene to sign papers to lower the interest rate. "I asked them why her name is first. They said it didn't matter," said Gene.



• The signature actually allowed the daughter-in-law to take $100,000 of the home's equity.



• Gene's son is outraged. "I wasn't aware there were no payments made. Mom wasn't aware there were no payments made," said Mike Call. He contacts Freedom Mortgage, but his calls are not returned. [...] A judge ordered a stay of ten days for the woman to try and work out a deal with the mortgage company.

For the story, see Fraud forcing 91-year-old out of home.

Court Orders Pre-Trial Shut-Down For Alleged Long Island Loan Modification Racket Accused Of Ripping Off 1,000+ Homeowners

In Nassau County, New York, the New York Daily News reports:

• A judge shut down a Long Island mortgage brokerage accused of ripping off hundreds of struggling homeowners through loan modification scams. Homesafe America Inc. and its successor corporation, United Solutions Law Firm, allegedly scammed more than 1,000 homeowners facing foreclosure by falsely promising to get mortgage reductions from banks.



• The Levittown, L.I., firms allegedly charged homeowners across the country - including some in Brooklyn and Queens - illegal upfront fees ranging from $1,500 to $4,000. Then they did little or nothing for the money.



• Nassau Supreme Court Justice John Galasso's order bars Homesafe's founders, Guy Samuel and Scott Schreiber, from engaging in mortgage-assistance services before trial. The order was sought by lawyers for 15 homeowners who hit Homesafe and United Solutions with a $1.5 million suit in June.



• "They deserved to be shut down," said plaintiff David Thorpe, a retired cop from Prole, Iowa. "I don't know how many more countless others there are out there who are in the same boat I am and made the same stupid mistake that I did." A call to Schreiber's attorney was not returned. Samuel could not be reached.

Source: Judge slams door on mortgage ripoffs Homesafe America Inc. and United Solutions.

For an earlier post on these alleged rackets, see Pair Of Alleged Long Island Loan Modification Rackets Get The 'Freeze' As Judges Limit Firms' Activities, Order Hold On Assets.