BofA To Unload Or Shutdown Countrywide Unit That Buys 'Bucket Shop-Generated' Crappy Home Loans

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

• Bank of America Corp. plans to jettison another piece of the troubled Countrywide mortgage empire — a lending arm that buys home loans from smaller institutions to then package into mortgage-backed securities on Wall Street.



• The beleaguered banking giant has shopped the business around and is in serious talks with one potential acquirer, according to spokesman Dan Frahm. If it can't strike a deal, Bank of America would shut down the business, jeopardizing 1,400 jobs, including 700 in Westlake Village and Thousand Oaks.

***

• With this, Bank of America has decided to get out of correspondent lending, a low-margin business that buys loans made by smaller institutions. Though these loans accounted for more than half of BofA's mortgage volume, the bank now wants to concentrate on those made directly with consumers.



• Analysts believe that BofA might be hard-pressed to sell the business, which is usually composed of riskier loans than those that the Charlotte-based bank would have made directly with customers. During the boom years, such purchased loans were a huge source of raw [sewage] material for the mortgage-related securities that later proved toxic.



• "Correspondent systems tend to be bucket shops that generate rotten loans," said Rochdale Securities analyst Richard X. Bove. "It is unlikely that there would be many buyers for this system."

***

• One of the stated reasons behind BofA's acquisition of Countrywide was the superior systems the Calabasas company was said to have developed for all aspects of the home lending business, including correspondent lending. But after recording tens of billions in losses related to Countrywide, Bank of America has wound up selling or shutting down many mortgage operations.



• The bank previously exited wholesale mortgage lending, which is making loans through brokers; and the reverse mortgage business, which allows older people to remain in their homes while drawing down the home equity to live on.



• It also sold Balboa Insurance, a legacy Countrywide unit. Balboa provides insurance policies that are forced upon homeowners who let their own fire insurance lapse, often because they are headed for foreclosure.

For more, see Bank of America puts Countrywide lending unit up for sale (Bank of America is looking to rid itself of a low-margin Countrywide unit that buys loans from smaller mortgage companies. Hundreds of jobs could be at stake).

Closing Agent Gets 42 Months After Copping Plea To Using Real Estate Escrow Account As Personal Piggy Bank Ending In $900K+ Swindle Of Entrusted Funds

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

• [A] former Freeborn County Commissioner who operated a real estate closing company was sentenced for converting funds from escrow accounts for her personal use. United States District Court Judge David S. Doty sentenced Linda Kae Tuttle-Olson, age 60, of Albert Lea, to 42 months in prison on one count of wire fraud in connection to the crime.



• Tuttle-Olson was charged on January 10, 2011, and pleaded guilty on April 26, 2011. In her plea agreement, Tuttle-Olson admitted that from January through June of 2010, she stole at least $920,000 from the escrow accounts of others and used the money for her own personal gain.



• From 2003 through 2010, Tuttle-Olson was the president of Freeborn County Abstract Co., also known as Albert Lea Abstract Company (“ALAC”). ALAC conducted real estate closings, held funds in escrow to be disbursed pursuant to closing instructions, and distributed loan proceeds as directed by lenders.



• As the company’s president, Tuttle-Olson received fiduciary and escrow funds from clients, which then were deposited into ALAC bank accounts. Tuttle-Olson admitted transferring funds from those accounts into other ALAC accounts. Then she wrote numerous checks to cash and herself from those accounts.



• In order to cover the funds she had stolen, Tuttle-Olson sent checks from one bank to another to produce artificial balances.

For the U.S. Attorney press release, see Former Freeborn County Commissioner sentenced for stealing approximately $1 million from escrow accounts.

Sleazy Tactic By Notorious F'closure Mill, Ostensibly Snoozing Trial Judge Headline Latest Florida Appellate Reversal Of Homeowner-Unfavorable Ruling

The latest reversal of a Florida trial judge's (Charlotte County Circuit Court Judge George C. Richards) foreclosure ruling unfavorable to a homeowner was issued by the state's 2nd District Court of Appeal.

1. The case involved a motion to set aside a default judgment granting foreclosure against an elderly homeowner (a Mrs. Joan B. Paul) who suffered from multiple physical and mental ailments who failed to respond to the foreclosure lawsuit.



2. The homeowner's nephew, who held a durable power of attorney authorizing him to act on his aunt's behalf, lived in Missouri and did not learn of the foreclosure lawsuit until it was late in the proceedings.



3. When he learned of the lawsuit, he came to Florida promptly, and assisted his aunt in retaining attorney Barbara Goolsby of Florida Rural Legal Services to file an emergency motion to set aside the final judgment and cancel the scheduled sale.



4. The foreclosure mill outfit representing the bankster involved, Wells Fargo (possibly known to some as the "Stagecoach to Hell"), refused to cancel the foreclosure sale to first allow a hearing on the motion. It went forward, foreclosed, and took title to the premises while the homeowner waited for her motion to be heard.



5. Thereafter, the trial court heard the frail, elderly homeowner's motion to set aside the judgment, which the trial judge denied. According to the appeals court, "[the trial court] felt compelled to let the foreclosure stand because the property was already sold and Mrs. Paul did not act when she should have."



6. The appeals court ruling then describes what happened next with regard to the apparently sleazy conduct by the foreclosure mill attorney and the response by an ostensibly snoozing trial judge:
   
   The trial court directed Wells Fargo's counsel to prepare an order denying the motion. Counsel stated that he would show the proposed order to Ms. Goolsby before submitting it to the court.
   
   Instead, counsel sent the proposed order directly to the trial court without notice to Ms. Goolsby. The trial court signed the proposed order.
   
   The service list attached to the order included Mrs. Paul, but not Ms. Goolsby. Ms. Goolsby was not served with a copy of the order, despite having filed numerous documents as Mrs. Paul's counsel.
   
   Within a couple of weeks, Ms. Goolsby discovered that the trial court had issued its order. She filed a motion for relief. As previously directed by the trial court, Ms. Goolsby submitted case law to allay the trial court's concern about its jurisdiction. See Sterling Factors Corp. v. U.S. Bank Nat'l Assoc., 968 So.2d 658, 665 (Fla. 2d DCA 2007) (holding circuit court has jurisdiction to set aside or reconsider foreclosure judgment upon proper motion after foreclosure sale).
   
   Ms. Goolsby asked the trial court to vacate the earlier order and grant relief from the default foreclosure judgment. Ms. Goolsby requested that if the trial court declined to set aside the default judgment, the trial court allow Mrs. Paul an opportunity to appeal.



7. The trial court denied the motion, and this appeal ensued.



8. In reversing the lower court ruling, the appeals court resolved these four points in the homeowner's favor:
   
   a) The foreclosure mill's failure to provide notice to homeowner's attorney (Ms. Goolsby) warranted judicial relief,(1)
   
   b) Contrary to his mistaken belief, the trial judge had jurisdiction to grant relief, even after the foreclosure sale had already taken place,(2)
   
   (c) The homeowner successfully established the "excusable neglect" necessary to warrant setting aside a default judgment,(3)
   
   (d) The appeals court rejected Wells Fargo's suggestion that Mrs. Paul's second motion to vacate was an improper second attempt to relitigate issues settled by a previous order denying relief'.(4)

Congratulations to attorneys Barbara Goolsby and Angela Thompson of Florida Rural Legal Services,(5) Fort Myers, on their efforts in pursuing this appeal and overcoming the apparently sleazy tactic (ie. failure to give proper notice after saying it would do so) by her adversary (Florida Default Law Group) and the sub-par efforts of a trial judge who possibly was so overworked that he may not have been thinking straight when deciding this case (after all, we all have a bad day from time to time). This type of case is tough enough to defend to begin with without also having to deal with a possibly ethically-challenged adversary and a 'tired' judge.

For the appeals court's 13-page ruling, see Paul v. Wells Fargo Bank, N.A., Case No. 2D10-3889 (Fla. App. 2d DCA September 2, 2011).

(1) From the appeals court ruling:

• The trial court stated that it found no notice of appearance by Ms. Goolsby that would require copying her with the order denying relief from judgment. Ms. Goolsby, however, was not required to file a notice of appearance.
  
  Florida Rule of Judicial Administration 2.505(e)(1) provides that an attorney may appear in a proceeding by "serving and filing, on behalf of a party, the party's first pleading or paper in the proceeding."
  
  Florida Rule of Civil Procedure 1.080(b) provides that "[w]hen service is required or permitted to be made upon a party represented by an attorney, service shall be made upon the attorney unless service upon the party is ordered by the court." Boosinger v. Davis, 46 So.3d 152, 154 n.1 (Fla. 2d DCA 2010) (reversing order denying motion for relief where counsel received no notice because court clerk failed to update service list, remanding for reinstatement of cause of action).
  
  The trial court's failure to provide Ms. Goolsby with the order denying the motion to set aside the default foreclosure judgment warrants Florida Rule of Civil Procedure 1.540(b) relief, even if for no other purpose than to reenter the order with a fresh date to preserve the right to appeal or to file a motion for rehearing. See Hall v. Dep't of Health & Rehabilitative Servs., 487 So.2d 1147 (Fla. 1st DCA 1986); see also, e.g., Smith v. Garst, 289 So.2d 774, 775-76 (Fla. 2d DCA 1974) (remanding case to trial court pursuant to rule 1.540 for reentry of order where counsel for incompetent petitioner not advised of order entry until after appeal deadline); Kanecke v. Lennar Homes, Inc., 543 So.2d 784, 785 (Fla. 3d DCA 1989) (holding where appellant did not receive notice of entry of order until after time for appeal expired, trial court as matter of law must grant rule 1.540(b) relief request to vacate and reenter it to restart time for appeal); Woldarsky v. Woldarsky, 243 So.2d 629, 630 (Fla. 1st DCA 1971) (upholding trial court's setting aside of final judgment pursuant to rule 1.540(b) and reentering it to allow appellant not timely served with copy of order time to appeal) (citing Rogers v. First Nat'l Bank at Winter Park, 232 So.2d 377 (Fla. 1970)).

(2) From the appeals court ruling:

• Mrs. Paul advised the trial court of Sterling Factors, 968 So.2d 658, in support of her position that the trial court had jurisdiction to grant relief even after a sale. Wells Fargo did not respond, and the trial court did not further question its jurisdiction after the sale. The trial court continued under the impression that, as a matter of law, it could not vacate the judgment.
  
  Sterling Factors instructs otherwise.

(3) From the appeals court ruling:

• The cases upon which Wells Fargo relies are inapposite. All address proceedings to foreclose where the mortgagor's health or ill fortune resulted in nonpayment of a mortgage.
  
  Here, Mrs. Paul argued that the trial court could grant rule 1.540 relief from a default foreclosure based on her excusable neglect in failing to respond to the complaint. See Am. Network Transp. Mgmt., Inc. v. A Super-Limo Co., 857 So.2d 313, 314-15 (Fla. 2d DCA 2003) (holding defendant's failure to respond to complaint because of kidney stones was excusable neglect); Rosenblatt v. Rosenblatt, 528 So.2d 74, 75 (Fla. 4th DCA 1988) (holding trial court has discretion to set aside default judgment for excusable neglect where husband did not answer complaint because he was shot and hospitalized); Leinberger v. Leinberger, 455 So.2d 1140, 1141 (Fla. 2d DCA 1984) (holding evidence that defendant suffered from psychosis was a sufficient ground to vacate default for excusable neglect); Jasson D. Radding, Inc. v. Coulter, 138 So.2d 380, 383 (Fla. 2d DCA 1962) (holding no abuse of discretion to set aside default judgment for excusable neglect based on defendant's affidavit that he failed to answer complaint due to illness); Jax Sani Serva Sys., Inc. v. Burkett, 509 So.2d 1251, 1252 (Fla. 1st DCA 1987) (holding default judgment could be set aside for excusable neglect where defendant was illiterate and wife was emotionally ill when served with process) (citing Leinberger).
  
  We stress, however, that as we understand them Mrs. Paul's ailments do not constitute a meritorious defense to nonpayment should the trial court set aside the default judgment and reopen the litigation. See Home Owners' Loan Corp., 178 So. at 163.
  
  Wells Fargo also relies on John Crescent, Inc. v. Schwartz, 382 So.2d 383, 385-86 (Fla. 4th DCA 1980), as precedent for its position that the trial court had no discretion to find excusable neglect. Such reliance is misguided. As illustrated above, our own cases hold that illness or psychological condition can be a valid ground for finding excusable neglect.
  
  We agree with the First District's decision in Jax Sani Serva System declining to follow Crescent's rationale. 509 So. 2d at 1252. Moreover, Crescent may be an anomaly because subsequently in Rosenblatt, 528 So. 2d at 75, the Fourth District held that the defendant's medical condition could constitute excusable neglect.

(4) From the appeals court ruling:

• Wells Fargo suggests on appeal that Mrs. Paul's second motion to vacate was an improper second attempt to obtain relief from the final judgment. We disagree.
  
  Steeprow Enterprises, Inc. v. Lennar Homes, Inc., 590 So.2d 21 (Fla. 4th DCA 1991), cited by Wells Fargo, holds that a second motion is improper if it tries to relitigate issues settled by a previous order denying relief. Id. at 23; see also Crocker Invs., Inc. v. Statesman Life Ins. Co., 515 So.2d 1305, 1306 (Fla. 3d DCA 1987). This rule provides a rationale against successive motions but is not an absolute bar; it should be ignored "where its strict application would work an injustice." Id. at 1307.
  
  For example, the Third District in Crocker affirmed a trial court's order granting a second motion that raised additional legal grounds revealing that the default judgment was erroneously entered. Id. at 1308; see also Dep't of Transp. v. Bailey, 603 So.2d 1384 (Fla. 1st DCA 1992) (holding that denial of first motion for relief from judgment, where jurisdictional argument was raised but not actually adjudicated, did not preclude review of second motion, which reasserted movant's position more clearly).
  
  Here, the issues had not been settled at the first hearing; the trial court advised Ms. Goolsby that it was sympathetic to Mrs. Paul's plight and would be inclined to set aside the foreclosure if she set another hearing and presented additional legal grounds that allowed him to intervene.
  
  At the subsequent hearing, Wells Fargo did not object that the motion was successive. Additionally, an order entered under rule 1.540, like the one appealed here, is itself subject to relief under that same rule. See Intercontinental Props., Inc. v. U.S. Sec. Servs., Inc., 515 So.2d 321, 322 (Fla. 3d DCA 1987); Nichols v. Hepworth, 604 So.2d 574, 575-76 (Fla. 4th DCA 1992).

(5) Florida Rural Legal Services is a non-profit law firm dedicated to providing quality civil legal advice, representation and education for low income people and communities, and provides free civil legal assistance to indigent families and low-income elderly people in thirteen counties in South Central Florida. FRLS also provides legal assistance to migrant workers throughout the state of Florida.

Unanswered Questions On MERS' Role In Washington State Foreclosures To Be Decided By State High Court; Fed. Judge Referral Shortcuts Drawn Out Process

In Washington State, The Oregonian reports:

• Washington state's highest court is set to determine whether thousands of pending foreclosures can proceed out of court, potentially averting months of conflicting and murky rulings. The court will hear arguments over whether lenders can file foreclosures in the name of MERS, a private company that owns a computerized mortgage registry system.



• Big lenders, including Fannie Mae, Freddie Mac and several large U.S. banks, created MERS in 1995 to get around cumbersome laws that required paperwork to be filed with county clerks when a mortgage changed hands.

***

• If the court rules against MERS, it could force thousands of foreclosures into court that would otherwise have been handled without ever going before a judge. And any decision could bring some order to a hodgepodge of state and federal rulings in wrongful foreclosure complaints -- at least, in Washington. Elsewhere, including Oregon, similar cases continue their long slog toward Supreme Court resolution, a legislative fix or a different tack by lenders.



• At issue is whether MERS meets the definition of a beneficiary under Washington law, and therefore whether it can legally file a foreclosure on a lender's behalf. "MERS cannot meet that definition because MERS is never a note holder," said Melissa Huelsman, an attorney representing Kristin Bain, one of the homeowners in the case. "They are simply a name on a piece of paper sitting there for the purposes of record keeping."

***

• In Washington, the questions went to the Supreme Court at the order of U.S. District Judge John C. Coughenour.(1) That expedites a case that could have taken years to reach the Supreme Court, Huelsman said. "This is absolutely a shortcut to get it there," she said.

For more, see Washington Supreme Court to weigh legality of MERS foreclosures.

(1) See Bain v. OneWest Bank, Case No. C09-0149-JCC (W.D. Wash. March 15, 2011) for Judge Coughenour's order deferring on ruling on this issue of state substantive law until the Washington State Supreme Court decides the issue.

In refusing get sucked into the foreclosure fraud muck and add to the nationwide confusion as to whether MERS can or can't 'soil' foreclosure proceedings with its involvement, Judge Coughenour made these comments in deciding to defer to the Supreme Court of Washington (the court most qualified to decide questions of state substantive law in Washington state) until it rules as to whether MERS has any business playing a role in foreclosures under the law of the state of Washington (bold text is my emphasis; [alteration added] to adjust an apparent judicial/administrative oversight in transcribing the text):

• This Court does [not] need to add even more pages to the legal discourse discussing whether MERS may serve as a beneficiary in deeds of trust generally. Compare, e.g., Silvas v. GMAC Mortg., LLC, No. CV-09-265-PHX-GMS, 2009 WL 4573234 (D. Ariz. 2009) (favoring MERS); Pantoja v. Countrywide Home Loans, Inc., 640 F. Supp. 2d 1177, 1188-89 (N.D. Cal. 2009) (favoring MERS), with, e.g., Mortg. Elec. Registration Sys., Inc. v. Sw. Homes of Ark., 301 S.W.3d 1 (Ark. 2009) (favoring borrower); In re Agard, No. 810-77338-reg (E.D.N.Y. Bankr. Feb. 10, 2011) (favoring borrower). See also Christopher L. Peterson, Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System, 78 U. Cin. L. Rev. 1359 (2010).
  
  Nor will the Court discern, more narrowly, whether MERS may serve as a beneficiary under Washington's Deed of Trust Act. That answer remains patently unclear. See Certification Order, Vinluan v. Fidelity National Title & Escrow Co., No. 10-2-27688-2 SEA (King Cnty. Superior Ct. Jan. 18, 2011). Because a state circuit court has recently certified this very question to the Washington Supreme Court, this Court declines to decide the issue before the Washington Supreme Court evaluates it.

***

• Plaintiff admits that she has been delinquent in her mortgage payments. A ruling favorable to Plaintiff in this case and others like it cannot and should not create a windfall for all homeowners to avoid upholding their end of the mortgage bargain—paying for their homes. But a homeowner's failure to make payments cannot grant lenders, trustees, and so-called beneficiaries like MERS license to ignore state law and foreclose using any means necessary. Whether these and similar defendants complied with Washington state law remains unclear.

***

• The Court STAYS this action pending the Washington Supreme Court's decision in Vinluan v. Fidelity National Title & Escrow Co., No. 10-2-27688-2 SEA. Counsel for the parties shall notify the Court when the Washington Supreme Court decides whether to accept certification and, if so, when it renders an opinion.

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

Note: Judge Coughenour deserves to be commended for:

• making it clear that a homeowner's mere failure to make house payments does not "grant" the banksters "license" to trample over the rule of law when carrying out foreclosure proceedings (a point that seems to fall outside the intellectual grasp of the banksters, and their enablers and apologists),



• taking this position, notwithstanding any personal feelings he may have against attempts by homeowners to score, as he put it, "a windfall" by dodging their responsibility for paying for what they bought (regrettably, many trial judges find great difficulty in setting aside their personal feelings in this regard while seemingly ignoring the fraudulent conduct by the banksters and their foreclosure mill conspirators - a point evidenced by the growing number of lower court rulings being challenged and reversed on appeal).

50-State AG Foreclosure Fraud Probe Chief: Our Settlement Won't Release Banksters From 'All' Civil Liability Or 'Any' Criminal Liability

Bloomberg reports:

• The 50-state attorney general group investigating mortgage foreclosure practices won’t release banks from all civil, or any criminal, liability in a settlement, Iowa Attorney General Tom Miller said.



• Miller said criticism of the multistate case was based on the “false notion” that its organizers were prepared to release the banks from all liability, including criminal liability. New York Attorney General Eric Schneiderman has been portrayed as resisting that position, Miller wrote in a letter to New York lawmakers who complained about Schneiderman’s removal from an executive committee working on the agreement.

For more, see Iowa Says State AG Accord Won’t Release Banks From Liability.

Federal Reserve, NYS Bank Regulator Announce Robosigner Settlements With Goldman, Loan Servicers

The Wall Street Journal reports:

• The Federal Reserve announced an enforcement action against Goldman Sachs Group Inc., saying the company's mortgage-servicing unit had engaged in "a pattern of misconduct and negligence" in its handling of home-mortgage loans.



• The Fed's action on Thursday seeks changes in mortgage-servicing practices and unspecified monetary damages. It came as Goldman reached an agreement with New York state banking regulators over wrongful foreclosures,(1) allowing it to complete the Sept. 1 sale of its Litton Loan Servicing unit to Ocwen Financial Corp. A spokesman for Goldman Sachs declined to comment.



• The Fed action is the latest response by government officials investigating mortgage-servicing irregularities including "robo-signing," in which bank employees signed foreclosure documents without reviewing case files as required by law. Federal and state officials continue to pursue a settlement with the nation's largest mortgage companies over allegations they mishandled home loans.

For more, see Fed Hits Goldman With Mortgage Order (may require paid subscription; if no subscription, GO HERE; or TRY HERE - then click the appropriate link).

(1) See Superintendent Lawsky Announces Agreement with Goldman Sachs, Ocwen, Litton on Groundbreaking New Mortgage Practices (Sale of Goldman’s Subsidiary, Litton, Conditioned on New Servicing Practices; Goldman to Significantly Reduce Loan Amounts for Those Hit by Financial Crisis).

Federal Regulator Suit: Banksters Made False Claims Regarding Compliance w/ Sound Underwriting Guidelines When Making, Peddling Securitized Home Loans

Reuters reports:

• A U.S. regulator sued a number of major banks on Friday over losses on more than $41 billion in subprime mortgage bonds, which may hamper a broader government mortgage settlement with banks.



• The lawsuits by the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, came as a surprise to the market and weighed on bank shares. The lawsuits could add billions of dollars to the banks' potential costs at perhaps the worst possible time for the industry.



• The FHFA accused major banks, including Bank of America Corp, its Merrill Lynch unit, Barclays Plc, Citigroup Inc and Nomura Holdings Inc of selling bonds backed by mortgages that should have never been packaged into securities.

***

• While the ultimate amount FHFA will seek is still unclear, [an unnamed mole reportedly familiar with the matter] said it could top the $20 billion being discussed by the banks and the state attorneys general.



• "Defendants falsely represented that the underlying mortgage loans complied with certain underwriting standards and guidelines, including representations that significantly overstated the ability of the borrowers to repay their mortgage loans. These representations were material to the GSEs, as reasonable investors, and their falsity violates (the law) and constitutes negligent misrepresentation, common law fraud, and aiding and abetting fraud," the FHFA said in the suit against Merrill Lynch.

For more, see U.S. regulator sues major banks over mortgages.

See also, The New York Times: U.S. Is Set to Sue a Dozen Big Banks Over Mortgages:

• The Federal Housing Finance Agency suits, which are expected to be filed in the coming days in federal court, are aimed at Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank, among others, according to three individuals briefed on the matter.

AP Report: Banksters' Dubious Docs Dating Back To 1990s Threaten Land Recording System Across U.S.; Title To Tens Of Thousands Of Properties Infected?

The Associated Press reports:

• Counties across the United States are discovering that illegal or questionable mortgage paperwork is far more widespread than thought, tainting the deeds of tens of thousands of homes dating to the late 1990s. The suspect documents could create legal trouble for homeowners for years.(1)



• Already, mortgage papers are being invalidated by courts, insurers are hesitant to write policies, and judges are blocking banks from foreclosing on homes. The findings by various county registers of deeds have also hindered a settlement between the 50 state attorneys general who are investigating big banks and other mortgage lenders over controversial mortgage practices.

***

• But now, as county officials review years' worth of mortgage paperwork, in some cases combing through one page at a time, they are finding suspect signatures — either signed with the same name by dozens of different people, improperly notarized or signed without a review of the facts in the paperwork — on all sorts of mortgage documents, dating as far back as 1998, The Associated Press has found.



• "Because of these bad titles, property owners can't prove they own the properties they think they bought, and banks can't prove they had the right to sell them," says Jeff Thigpen, the registrar of deeds in Guilford County, N.C. In Guilford County, where Greensboro is located, a sample of 6,100 mortgage documents filed since 2006 turned up 74 percent with questionable signatures.

***

• Widespread robo-signing that stretches back a decade or more could create problems for homeowners. Regulators have so far not asked lenders to clean up the potentially millions of suspect documents filed in the past decade or earlier. That troubles some banking experts, including Sheila Bair, who until early July was chairwoman of the Federal Deposit Insurance Corp.



• "We do not yet really know the full extent of the problem," Bair said in written remarks to the Senate Banking Committee. She and others have called for a comprehensive study on the extent of the fraudulent signatures in mortgage documents.



• If documents with robo-signed signatures are challenged in court, judges could question the ownership of the properties, says Katherine Porter, a professor at University of California Irvine School of Law and an expert on consumer credit law. The consequences extend to homeowners in good standing when they try to sell.



• If invalid documents are discovered in the chain of ownership, it could delay the sale or make it difficult for buyers to get a mortgage because title insurers won't write a policy for the property, says Justin Ailes, vice president of government affairs of the American Land Title Association, a trade association representing the title insurance industry. Banks and other mortgage lenders won't write a home loan without title insurance.

***

• "The banks are playing with the integrity of the land record system," says John O'Brien, the recorder of deeds from Salem, Mass. [...] O'Brien, the recorder of deeds from Massachusetts, says he's only responsible for one county out of more than 3,000 in the U.S. "Federal regulators with a lot more authority than me have to step up to the plate and help correct this," he says.(2)

For more, see Robo-signed mortgage docs date back to late 1990s (if link expires, TRY HERE).

(1) For additional background on the 'chain of title' problem arising by reason of robosigning, see:

• Congressional Testimony of Associate Professor Adam J. Levitin, Geo. U. L. Center, Robo-Signing, Chain of Title, Loss Mitigation, and Other Issues in Mortgage Servicing,
• Daily Finance: Why the Foreclosure Mess Settlement Proposal Can't Fix the Damage,
• Naked Capitalism: On the Clouded Title Mess and the Difficulties of Cleaning It Up.

(2) See Home Preservation Network: John O'Brien Calls On CEOs and AGs to Come to Salem:

• John O’Brien, Southern Essex County Register in Salem, Massachusetts has been leading the national effort to hold lenders accountable, and has refused to record robo-signed documents has invited the CEO’s of the nation’s largest banks and all of the state’s attorneys generals to come to the Salem Registry and view first-hand the damage that has been caused to thousands of Essex County homeowners’ chains of title.



• “It's like a tornado came through here,” said Register John O'Brien, referring to the financial havoc and damage done to property records at the Registry of Deeds. “Following any disaster, the powers that be generally show up to assess the damage. That is what I would like these major lenders and the Attorneys General to do – sooner than later,” O’Brien said.

Deed Recording Head Invites Banksters, State AGs To Survey Robosigner-Induced Wreckage To Local Land Records; "It's Like A Tornado Came Through Here!"

The Home Preservation Network reports:

• John O’Brien, Southern Essex County Register in Salem, Massachusetts has been leading the national effort to hold lenders accountable, and has refused to record robo-signed documents has invited the CEO’s of the nation’s largest banks and all of the state’s attorneys generals to come to the Salem Registry and view first-hand the damage that has been caused to thousands of Essex County homeowners’ chains of title.(1)



• “It's like a tornado came through here,” said Register John O'Brien, referring to the financial havoc and damage done to property records at the Registry of Deeds. “Following any disaster, the powers that be generally show up to assess the damage. That is what I would like these major lenders and the Attorneys General to do – sooner than later,” O’Brien said.



• O’Brien believes that a sweetheart deal, in the form of a settlement to grant lenders immunity from prosecution, is in the works.

For more, see John O'Brien Calls On CEOs and AGs to Come to Salem.

(1) For additional background on the 'chain of title' problem arising by reason of rob0signing, see:

• Congressional Testimony of Associate Professor Adam J. Levitin, Geo. U. L. Center, Robo-Signing, Chain of Title, Loss Mitigation, and Other Issues in Mortgage Servicing,
• Daily Finance: Why the Foreclosure Mess Settlement Proposal Can't Fix the Damage,
• Naked Capitalism: On the Clouded Title Mess and the Difficulties of Cleaning It Up.

Media Coverage Raises The Heat On Foreclosure Probe, Shining Light On Evidence Of Continuing Sloppy, Fraudulent Bankster Practices

From the Columbia Journalism Review's The Audit blog:

• It’s clear that the banks aren’t much chastened by the foreclosure scandal that erupted last fall and which threatens to cost them tens of billions of dollars.



• An American Banker investigation [] shows shows that several banks are still fraudulently backdating documents to foreclose on homeowners.(1) And it’s not the first to show this. Last month, an outstanding Reuters probe by Scot Paltrow showed similar behavior [...].(2)



• These stories raise serious questions for the Obama administration and states attorneys general led by Iowa’s Tom Miller who have been rushing to settle and release the banks from liability for fraud. How can you release folks who’ve repeatedly shown that they’ll ignore the law and even recent settlements promising they’ll obey it?

For more, see The Foreclosure Scandal Continues (American Banker and Reuters show banks thumbing their nose at the law).

(1) American Banker: Robo-Signing Redux: Servicers Still Fabricating Foreclosure Documents:

• Some of the largest mortgage servicers are still fabricating documents that should have been signed years ago and submitting them as evidence to foreclose on homeowners.

(2) Reuters: Special report: Banks still robo-signing.

See also:

• The Associated Press: AP Exclusive: Mortgage 'robo-signing' goes on ('Robo-signing,' at center of foreclosure probe last year, is still rampant).
• Firedoglake: Banks Continue to Fabricate Documents, Commit Foreclosure Fraud.

After Some Foot-Dragging, BofA Agrees To Waive Fees, Reimburse Legal Expenses For Elderly Couple Threatened With Foreclosure Over Early House Payment

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

• Last week, Bank of America apologized for mistakenly foreclosing on an elderly couple because they had made a mortgage payment too early. But that apology didn't include reimbursing the couple for $1,800 in legal fees or waiving late fees caused by the bank's blunder.



• After supporters of James and Sharon Bullington cried foul, the country's biggest lender decided Thursday to reimburse the legal fees and waive all late fees connected to its error.

***

• The New Port Richey couple accepted a mortgage modification this week after the case gained national attention following an Aug. 20 story in the St. Petersburg Times.

For more, see Finally: Bank of America waives fees it charged elderly couple.

Suspended Counsel Convicted Of Helping Client Break Into, Reclaim Foreclosed Home; Lawyer Faces Similar Charges In Neighboring Counties

In Orange County, California, North County Times reports:

• A San Diego attorney whose law license has been suspended was convicted [] of helping a client break into his foreclosed Newport Beach home. It took jurors about an hour to convict Michael Theodore Pines, 59, of vandalism, attempted second-degree burglary, the attempted unauthorized entry of a dwelling and obstructing an officer, all misdemeanors.



• After the verdicts were read, Orange County Superior Court Judge Andre Manssourian ordered deputies to handcuff Pines and take him into custody, Deputy District Attorney Pete Pierce said. [...] Pines, who has been declared ineligible to practice law, faces similar misdemeanor charges in Ventura County, and felony charges in San Diego County, Pierce said.

***

• Co-defendant Rene Hector Zepeda, 72, pleaded no contest before the trial started to a misdemeanor count of trespassing. He testified that thought it was OK to break into his foreclosed home, because he relied on Pines' legal advice, Pierce said.

For more, see Foreclosure attorney convicted in Orange County.

Protestor Invasion Of Bankster Headquarters Demanding Loan Mod Yields Paltry Cash For Keys Offer; Borrower Response: Take A Hike, I'll Keep Fighting!

In Pasadena, California, the Pasadena Star News reports:

• Bassett resident Rose Gudiel rejected a $4,000 cash offer to leave her home without a fight late Monday afternoon at a meeting with OneWest Bank officials. "It was a pretty short meeting and it was basically cash for keys," she said. "They were very adamant about not being able to do anything beyond that."



• The meeting came just four days after Gudiel received her evection notice and 11 days after 50 protestors invaded the lobby of the Pasadena bank. Gudiel insisted she's not budging from her home [...]. A court date on the eviction notice has been set for Sept. 6 in Los Angeles Municipal Court.



• "I'm going to keep fighting for my home and I told them that," Gudiel said. "If they bring the police to arrest me, I'm not leaving."



• Gudiel, a state employee, has been attempting to get the bank to modify her loan, which requires a $2,456 monthly payment, for almost two years. The request came after her brother was gunned down in La Puente in 2009, causing the household income to drop, she said.



• Although the income has long since recovered, the bank has consistently refused to give her a loan modification, she said. "They came into the meeting and basically said, 'we reviewed your paperwork and this is the best we can do,"' Gudiel recounted. "Which is nothing."



• Gudiel secured meeting with bank officials after she and a group of 50 protesters overwhelmed security and briefly commandeered OneWest's corporate headquarters [...] Pasadena. OneWest has declined to comment.

For more, see Homeowner rejects $4,000 deal to leave her home without a fight.

Investor Owning 57 Of 112 Apartments In Rapidly-Deteriorating Condo Complex Stiffs HOA Out Of $335K In Dues, Leaving Other Unit Owners Holding The Bag

In Nashville, Tennessee, The Tennessean reports:

• Residents of a West Nashville condominium complex could soon be forced to search for new homes because of a complicated dispute between absentee real estate investors and their homeowners association.



• The West Meade Condominium complex, located off Charlotte Pike next to the Nashville West shopping center, has become dangerously rundown because the homeowners association doesn’t have enough money to pay for repairs.



• A metal staircase to one of the buildings has nearly rusted through. External support beams have completely separated from the roof hanging above. Roofs to at least three of the buildings are crumbling away. During this summer’s record heat, there wasn’t even enough money to open the community pool.



• But despite a June court ruling saying the homeowners association is owed $335,000 by Landis Ventures, which owns 57 of the 112 condos, residents say they were told at a recent board meeting that it may soon be time to search for a new place to live. Lack of funds could force the association to declare bankruptcy and sell the condo property, according to the summary of a recent board meeting.

***

• A summary of the emergency meeting uncovered by The Tennessean showed that the association soon may not have enough funds to pay for its liability insurance or utility bills.

For more, see Dispute could force out residents of rundown condo (Investors owe $335,000 to homeowners association).

Negotiations To Keep Brooklyn Great Grandma In Home Of 40+ Years Stall; Activists Plan On Another Protest

In Bedford Stuyvesant, Brooklyn, Bed Stuy Patch reports:

• Negotiations faltered again last Wednesday for Ms. Mary Ward, the Brooklyn great-grandmother whose home was sold following a predatory lending scheme. After an eviction blockade the prior Friday, August 19, organized by non-profit housing advocates and local residents, supporters were able to postpone the eviction of Ms. Ward by city marshals.



• The successful blockade ended with Assembly member Annette Robinson volunteering to mediate a meeting on behalf of Ms. Ward and the property’s new owner, Shameem Chowdhury, set for last Monday, August 22. Lawyers for Ms. Ward submitted to Chowdhury a formal offer of $70,000—money Ms. Ward had in escrow. Additionally, Chowdury could donate the property to a land trust as a tax write off.



• However, Chowdhury has been unresponsive. After he no-showed for the Monday meeting, and the second meeting rescheduled for that Wednesday, August 24, lawyers for Ms. Ward have started preparing a contingency plan in the likely event that the property’s new owner refuses to negotiate.

***

• Lawyers for Ms. Ward offer their reason why the home's sale was illegal in the following article: An Illegal Home Sale, According to Common Law.



• And finally, Shameem Chowdhury talks! Click here to read the exclusive interview he gave Bed-Stuy Patch: Housing Speculator to Ms. Ward: "I'm Innocent".

For more, see Still no Deal for 82-Yr-Old Great Grandma; Another Protest Planned (After a second no-show by the property's owner, organizers plan another protest and march).

Over Two Dozen Mobile Home Park Residents Face The Boot As Rent-Skimming Owner Loses Premises In Foreclosure Sale

In Jonesboro, Georgia, WSB-TV Channel 2 reports:

• Nearly 30 neighbors in Clayton County say they are forced to find a new place to live, even though they have been paying rent. People living in the Royal Court mobile home park told Channel 2’s Amy Napier Viteri the bank foreclosed on the property, but no one bothered to tell them until now.



• According to court documents, the bank foreclosed on the property in May, but neighbors say they’ve been paying their rent and water bills all along. Now, they say they have being told they need to move out and have no idea what happened to the money they paid. “How dare you? How dare you do that to us. We were blinded,” renter Kayla Kennedy said.



• Kennedy wants to know where her money has been going. She paid rent on the lot for her trailer she bought last year. She showed Viteri the bill of sale, but said the woman from whom she bought it, who also runs the mobile home park, may not even have been the owner. “The bank told me she had not made a payment in over two years, so they were already in proceedings to do the foreclosure on the property,” Kennedy said.



• "We have nowhere to go. We’re fixing to lose our home, everything I’ve got,” neighbor Sheila Sheffield. Sheffield told Viteri they paid monthly rent and water bills to a woman named Wanda Nguyen, who they believed owned the property. Now, a manager told them Nguyen lost the property to foreclosure and water will soon be shut off.



• Sheffield said she and several others are on fixed incomes and live in the trailer park because it’s all they can afford. “We don’t even have a car. We don’t even have a way to leave out of here,” Sheffield said.

***

• Kennedy told Viteri the bank told her they have 30 days to move out, but she is trying to get that extended. If the water company shuts off water to the park, they will have to leave even sooner than that, Kennedy said.

For the story, see Residents forced to move out while paying rent.

Judge To Developer: Falsely Luring Condo Buyers With Promises Of Panoramic NYC Views Will Cost You $4.8M+

In Jersey City, New Jersey, the New York Post reports:

• Jamie LeFrak, heir to iconic New York real-estate company The LeFrak Organization, has been ordered to fork over $4.8 million to 16 jilted residents of one of his luxury apartment buildings in Jersey City.



• The award closes the loop on a ruling from June that found LeFrak falsely lured buyers to his tony Shore Club condominium with promises of panoramic views of Manhattan that were soon obstructed by another LeFrak building, the 32-story AquaBlu.



• New Jersey state court Judge Edward O’Connor’s order included $3.8 million in damages, plus interest, for the false advertising. Adding insult to injury, the judge also ordered the 38-year-old developer and his firm to cough up close to $1 million in legal fees -- bringing the final tally to close to $5 million.



• LeFrak has 45 days to appeal. A call to a LeFrak Organization spokeswoman of wasn’t returned.

Source: LeFrak’s view screw costs $4.8M.

Tenant Suit: Flying Rodents Drove Us Out 6 Days After Coughing Up $36K In Advance For 1-Year Apt. Lease; Pair Wind Up In ER For Series Of Rabies Shots

In New York City, the New York Post reports:

• Two Manhattan women say they fled their Washington Heights apartment in horror after discovering it was already occupied — by bats. In papers filed in Manhattan Supreme Court, Dimitra Mallarios, 56, and Irene Katehis, 23, say they were duped into paying a full year’s rent for an apartment at 640 Fort Washington Ave., only to discover that some flying rodents were already at home in the fifth floor pad.



• The pair moved into their $2,500-a-month batcave on July 25, but soon found out they weren’t alone in the fifth-floor pad, their court papers say. Two days after they moved in, "Mallarios encountered a bat" which was "flying around one of the rooms in the aprtment," the suit says. The "very scared, nervous and upset" tenant called the building’s super, who "was able to catch the bat in a plastic bag and remove it from the premises," the suit says.



• The pair "believed that the premises was free from bats and decided to remain in the apartment," the suit says — but the horror was just beginning. Four nights later, the pair came home and "were getting ready for bed when Malliaros noticed a weird bustling coming from her window," the suit says. "[T]he curtain covering the window was moving a lot," and when Malliaros went to investigate the sound, "a bat flew out from behind the curtain headed directly at" her, the suit says.



• "Malliaros screamed, exited the bedroom and slammed the door, leaving her purse, money and cell phone behind." The pair stayed at a relative’s apartment, where they’ve been living in cramped quarters ever since, the suit says. "The plaintiffs have only returned to the premises to pick up some of their personal effects" and "only during daylight hours," the suit says.



• They did get a painful souvenir from their six-day stay in their new home — their doctor noticed two marks on Katehis which they believe "were caused by a bat while Katehis was asleep in the premises."



• As a result, they had to go the ER at Lenox Hill for a rabies vaccine. "They were each given four shorts, which were very painful and involved very large needles," and they need "to get an additional shot each week for the next three weeks."



• The pair say they’d like to move, but "after paying $36,100 up front for the one year lease of the premises, which includes a security deposit and a broker’s fee, the plaintiffs do not have money to find substitute housing." The suit says they complained to the landlord about the bat problem, but he never returned their call.



• The suit seeks a refund of their rent from August on, as well as $1 million in damages for their "emotional distress," "severe anxiety" and problems they’ve had sleeping since. Landlord Fairline Management did not respond to requests for comment.



• The building’s super, Sabri Shabiu, told The Post he had taken one bat out of the apartment, but said he felt the women were exaggerating about the extent of the problem. "No infestation. No way!" he said. Other residents said they hadn’t had any bat issues in the building, although there had been problems with skunks and raccoons in the building’s garden.

Source: Bats drove us from our apartment: lawsuit.

Judge To Prosecutor: 'Nice Try, But No Dice' After Rejecting Move To Yank Bail Release For Multiple-Slay Suspect Who Stiffed Bank On Mortgage Payments

In Newark, New Jersey, The Star Ledger reports:

• Accused killer Lee Anthony Evans remains free on nearly $1 million bail following a Superior Court judge’s determination [] that he can continue to use an Irvington property on which he balanced his bail funds.



• Evans, 58, faces five murder counts for the Aug. 20, 1978, killings, and was released from jail last summer after posting bail in the form of three pieces of property



• The Essex County Prosecutor's Office filed a motion earlier this month to revoke Evans' $950,000 bail, saying the lead defendant in the 1978 slaying of five Newark teenage boys violated its terms by defaulting on a five-year commercial loan on the property and failing to pay related property taxes.

***

• Judge Patricia Costello, though, found that the property in question, 10-12 Melville Place, is in fact two parcels, and that just one is in default. Together with the two other properties also not in arrears, both owned by relatives, Evans meets the bail’s terms, she said.

For the story, see Man charged with killing five Newark teens in 1978 can remain free on bail, judge rules.

NYC Man Faces Grand Larceny Charges After Allegedly Pocketing Upfront Rent On Apartment He Didn't Own

From the New York Post NYPD Daily Blotter:

• An East Village real-estate agent turned out to be one big phony, authorities said. Renato Bardini, 48, showed an apartment seeker a place on East Third Street near First Avenue last month, authorities said.



• The victim wanted to move in and gave Bardini a $500 security deposit and a $75 “application fee.” The faux agent also showed the apartment to another victim, who gave him more than $3,000 for rent, deposits and fees. It’s not clear how the fraudster accessed the apartment.



• Bardini was charged with third-degree grand larceny, scheming to defraud and petit larceny.

Source: NYPD Daily Blotter (Manhattan).

Accused Home Title-Snatcher Faces Charges Of Forgery, Obtaining Property By False Pretenses, Breaking & Entering For Hijacking Vacant F'closed Mansion

In Raleigh, North Carolina, the News Observer reports:

• Police have arrested and charged a Tarboro man with squatting for at least seven months in a North Raleigh home valued at nearly $2 million.



• The 7,664-square-foot home in Wakefield Plantation has six bedrooms, six full bathrooms, theater and game rooms, a wine cellar, vaulted ceilings and an elevator. There is also a swimming pool and a Jacuzzi whirlpool bath.



• Thomas Everette Jr., 31, apparently enjoyed the [...] luxury home so much that he created a fake company with forged documents to transfer the property to himself at no cost, according to police reports.



• But the scam fell apart when a concerned neighbor did some investigating and called police.

***

• Everette is charged with one felony count each of breaking and entering, obtaining property by false pretenses and forgery of deeds or wills, according to arrest warrants filed at the Wake County Magistrate's Office.



• His arrest came about two weeks after state Attorney General Roy Cooper announced that a group of Triangle residents had filed bogus paperwork at the county's Register of Deeds office to try to claim ownership of six foreclosed homes in Wake County.(1)



• Anne Redd, a spokeswoman with the Wake County Register of Deeds, said she was contacted by the state Attorney General's Office before Everette's arrest. "They told me they were fixing to get him because he had been living there since December," she said.



• The neighbor, who called the 911 operator last week, said he had called earlier in February about people going into the house because he thought it was a burglary. Everette avoided arrest, however, by showing paperwork that claimed he was trustee of the property to the police officer who responded, the neighbor said.



• The house is actually owned by the New York Bank of Mellon and Bank of America after it went into foreclosure last year, according to Wake County real estate records.

***

• Investigators say Everette set up a fictitious company, International Fidelity Trust, and filed it with the Secretary of State's Office on April 20. He then created a false deed that listed International Fidelity Trust as the owner of the Victoria Park Lane house, state records show.



• Next, he filed paperwork giving the home's "occupants" 90 days to satisfy all financial obligations or waive their right to the home. The home was vacant, so there was no one to respond to the bogus claim to the home, county records show.



• Everette filed another document with the Register of Deeds on July 13, showing that International Fidelity Trust had transferred the home to him at no cost, court records show. On that document, police say Everette forged signatures of a Bank of America official and a South Carolina notary public to gain control of the $1,941,949 property for which he never paid a dime.

***

• Everette apparently is not a novice at running scams. He has a 28-page record of previous charges that include breaking and entering, trespassing, violation of a domestic violence order, impersonating a bail bondsman, identity theft, larceny, resisting arrest, obtaining property by false pretense and insurance fraud, state records show. He is being held at the Wake County jail, his bail set at $85,000, a jail spokeswoman said Tuesday.

For the story, see Man accused of being a squatter in N. Raleigh.

(1) See Criminal, Civil Charges Brought In Vacant Home Hijacking Scam; NC AG: Phony Deeds, Bogus Liens "Filled With Gibberish ... A Fraud On The Whole System".

HOA Denies Winning Bidder Title To Co-Op Unit Bought At F'closure Sale; NYS Appeals Court: Sale Subject To Association's Governing Docs, Restrictions

In New York City, Habitat Magazine reports:

• Congratulations! You're the successful bidder at a foreclosure sale of co-op shares. But wait! Can you actually take ownership of the apartment — or do you still need permission from the co-op board? Does a co-op's governing documents trump long-established precepts of property ownership? The answer may surprise you.



• The 2010 case that set the precedent on this was LI Equity Network LLC v. Village in the Woods Owners Corp.

***

• After their eviction [for failure to pay co-op maintenance fees], [the unit owners] defaulted on their loan. The lender declared the loan in default and scheduled a public auction — in this case, a "nonjudicial" sale. LI Equity was the successful bidder — but then the co-op's board of directors said that it would not approve the transfer of shares to.



• While LI Equity never filed a formal application with the board to obtain the shares, the board independently reviewed and rejected the company's proposal to close on the unit and then, well, sell it to a board-approved purchaser. What's the problem?



• LI Equity, naturally, sued the co-op in May 2007 on the ground that the company was statutorily entitled to own the apartment, regardless of the terms of the co-op's governing documents.



• It also sought damages for breach of the implied duty of fair dealing. And the company won in a lower court, which directed that the co-op transfer the shares to LI Equity. The court reasoned that the co-op board did not have the power to interfere with the transfer of the lease and shares from a "judicial" sale, so the same would hold true of "nonjudicial" sale.



• The appellate court, however, reversed that decision.
  
  What, My Money's No Good?
  


• That court found that LI Equity was subject to the approval requirements found in the co-op's governing documents. It further said that the co-op board properly exercised its business judgment when it applied the approval requirements to the LI Equity's request to close on the shares.

For more, see Who Owns a Co-op Apartment When You Win a Foreclosure? Maybe Not You.

For the ruling, see LI Equity Network LLC v. Village in the Woods Owners Corp., 910 N.Y.S.2d 97, 79 A.D.3d 26 (App. Div. 2nd Dept., 2010).

Despite Already Receiving Payment On Delinquent Dues, HOA Forces Foreclosure Sale On Homeowner Anyway

In Riverview, Florida, Fox 13 reports:

• Riverview resident Stephanie Bonefont has been a homeowner for nearly 11 years, but this week she could wind up homeless. The reason why is the tricky part. The single mother is in a twisted legal fight with her homeowners association, South Pointe of Tampa, over unpaid dues. And she says "they're making off like bandits, getting paid twice for this house. Meanwhile, I have to buy it three times."



• Back in 2008, her home was foreclosed and the title was sold. Here's the problem: Bonefont said she never got any notices. That's because they were mailed to the wrong address. Then one day she got an unexpected knock at her door. "The guy who came to my door, it wasn't in foreclosure at this point, (the house) was in his name," she said.



• The homeowners association had sold the title to a man named Pasto Angulo for $7,400 - the amount Bonefont owned on fees. She fought it. Because the notices were sent to a wrong address, a judged reversed the sale.



• And she said she paid Angulo more than $7,300 to get the deed back in her name. But the homeowners association says not so fast. It says it has no evidence that she repaid Angulo. His attorney confirmed the sale to FOX 13 by providing a copy of the check.



• But since the association never received a payment directly from Bonefont, a judge will allow the home to go up for sale Friday.



• "They are double dipping, and unfortunately, my research didn't turn up any cases where this has happened before because I don't think its ever happened, " David Jordan, Bonefont's attorney, said.



• The homeowners association said in a written statement its moving forward with the lawsuit. "The court twice rejected the legal theories advanced by Ms. Bonefont's counsel and confirmed her property should be sold for homeowners association assessments," a portion of it read.



• It seems Bonefont's only choice to stop the foreclosure is to write another big check, this time to the homeowners association. "How many people has this happened to that are too afraid to fight - that can't fight?" she said.

Source: Woman says homeowners association wrong for selling home.

Lawsuit: Bankster Violated Court Order Staying F'closure Proceedings; Went Forward & Took Title Anyway, Hired Contractor In Attempt To Take Possession

In Pittsburgh, Pennsylvania, the Pittsburgh Post Gazette reports:

• A Shaler woman filed a lawsuit in U.S. District Court [] alleging that a mortgage firm and its contractors improperly took title to her house, tried to break in and posted a foreclosure notice on her front door while she was holding a party.



• Pamela A. Vukman sued Beneficial Consumer Discount Co., the law firm of attorney Martha E. Von Rosenstiel and others, saying that actions taken in relation to her home last October violated an order by Allegheny County Common Pleas Court Judge Lee J. Mazur staying foreclosure proceedings against her.



• Ms. Vukman's attorney, Jeffrey L. Suher, said that she won a court ruling that Beneficial had violated state law when it foreclosed, and the company has appealed that to Superior Court.



• Despite her victory in the case, Mr. Suher said, the lender took title to her house. It then hired a company to enter her house, remove trash and change the locks. That company's agent was caught trying to break in, the complaint said.



• Then, a contractor posted a notice of foreclosure on her front door, causing embarrassment. Mr. Suher said that Ms. Vukman is still in the house. Ms. Rosenstiel declined comment. A Beneficial spokesperson could not be reached.

Source: Shaler woman sues over house foreclosure.

Chicago Feds Take Down Dad, Kids With Convictions, Prison Sentences In Ponzi, Phony Home Mortgage Reduction Scams Screwing 2,000 Victims Out OF $10M+

From the Office of the U.S. Attorney (Chicago, Illinois):

• A Chicago man was sentenced to 15 years in federal prison, after eight-year prison terms were imposed previously for his son and daughter, in connection with a massive "affinity" fraud scheme in which approximately 2,000 victims were swindled of approximately $10.7 million in losses.



• The father, Roy Fluker, Jr., 56, of Highland Park, who was arrested in Florida where he fled after failing to appear for sentencing last December, received the 15-year term [...] in Federal Court in Chicago.



• Fluker, his son, Roy Fluker, III, and his daughter, Ronnanita Fluker, were each convicted of multiple fraud counts following a trial in May 2010.(1)

***

• All three defendants participated in a scheme between 2005 and 2008 in which they fraudulently obtained approximately $18 million from victims, as well as some victims’ homes, through their operation of companies called All Things in Common, LLC, which did business as More Than Enough, LLC and Locust International, LLC.



• [In addition to a Ponzi scheme,] Defendants also marketed what purported to be a financial program called the "Housing Program," which they claimed provided a way for people to reduce their mortgage payments and to own their homes clear of any mortgage within five years.



• The majority of victims were individuals whom Fluker and his children targeted at gatherings in Chicago area churches and hotels. Fluker and his children marketed their programs exclusively to the African-American community.

For the U.S. Attorney press release, see Father Sentenced to 15 Years in Prison, Following Eight-year Terms Imposed on Son and Daughter, for Their Roles in $10 Million Affinity Fraud Scheme That Swindled 2,000 Victims.

(1) Roy Fluker III, 31, was sentenced to eight years in prison, and Ronnanita Fluker, 34, was sentenced to an eight-year prison term last December, according to the press release. A $9 million preliminary forfeiture judgments against all three defendants was imposed and they were ordered to pay $7,336,957 in restitution.

Nevada AG Expands Pending BofA Suit To Include Dubious Lending, Foreclosure Practices; Joins NY AG In Upping Heat On Notorious Bankster

Paul Kiel at ProPublica reports:

• The state of Nevada dramatically expanded its lawsuit against Bank of America today, turning the narrow case it filed late last year into a broadside that targets virtually all aspects of the bank's mortgage operations. Bank of America has previously denied wrongdoing.



• The sweeping new suit could have repercussions far beyond Nevada's borders. It further jeopardizes a possible nationwide settlement with the five largest U.S. banks over their foreclosure practices, especially given concerns voiced by other attorneys general, New York's foremost among them. (You can read the suit here).

***

• According to the suit, borrowers were duped into unaffordable loans and then victimized again through a misleading mortgage modification program that homeowners tried to use to avoid foreclosure. Finally, the suit alleges, the bank filed fraudulent documents to move forward with the foreclosures.

***

• The state's suit had previously been confined to the modification issue. At that time, Bank of America also said homeowners would be best served not through litigation but through reaching a multistate settlement that would "broaden programs for homeowners who need assistance."



• By expanding the suit, Nevada's Catherine Cortez Masto joins New York Attorney General Eric Schneiderman in stepping up investigations of the bank. In addition to initiating a broad investigation of banks' securitization practices, he recently filed a suit charging that Bank of America had fraudulently foreclosed on homeowners.

For more, see Nevada Wallops Bank of America With Sweeping Suit; Nationwide Foreclosure Settlement in Peril.

Go here for links to other articles by Paul Kiel on the rackets involving bank foreclosures and loan modifications.

Cops: Scam Used Title Searches To Find 'High-Equity' Homes For Rent, Tenant 'Posers,' I.D. Theft To Rip Off Landlords' Equity In Rental Homes

In Southern California, The Orange County Record reports:

• Authorities have arrested seven people, including some in the United States illegally, on suspicion of posing as owners of at least 20 homes they were renting, taking out $5.9 million in home-equity loans and pocketing the cash.



• The suspects,(1) some of whom are Korean and Chinese nationals, reportedly stole the homeowners’ identities to conduct the transactions, authorities said. One of the suspects is believed to be a resident of Garden Grove, Los Angeles County Sheriff’s Detective Christopher Derry said.



• Two of the targeted homes were in Orange County: a five-bedroom house on Spartan Street in Mission Viejo and a four-bedroom house on Threewoods Lane in Fullerton, he said.



• A loan for $200,000 was taken out on the Mission Viejo home and one for $250,000 was taken out on the Fullerton home, Derry said. The rest of the homes are in Los Angeles and San Bernardino counties. Individual law enforcement agencies had been working on their respective cases for a while and had recently begun cooperating, Derry said.

***

• Derry said the case was especially hard to crack because the suspects used prepaid cell phones and web-based email addresses, the homes were spread across several law enforcement jurisdictions, and the homeowners learned of the fraud months after the loan transactions, when lenders started the foreclosure process.

***

• In a scheme that lasted at least two years, Derry said, the suspects used title searches to find homes for rent that had small or no mortgages on them. Using fake identities and documents, they signed leases and paid security deposits and first month’s rent to gain access to the homes.



• Then, using “really good” fake IDs, Derry said, the suspects took on the homeowners’ identities, applied for home-equity loans and ordered appraisals. They typically sought loans from “hard-money” lenders who lend for shorter periods and at higher interest rates than commercial financial institutions. Hard-money lenders base funding decisions on property value, equity and salability rather than creditworthiness and income of a borrower.



• When the loans were funded, escrow companies were directed to transfer the money into several bank accounts opened by the suspects in the real homeowners’ names. From there the money was withdrawn in small amounts as cash or checks.

***

• Title companies – which insured the mortgage liens against invalidity or unenforceability – have been paying out millions of dollars to reimburse the lenders for their losses, and homeowners are spending thousands of dollars in court to clear their homes’ titles, Derry said.

For the story, see Police: Renters pose as owners, steal home-equity cash.

(1) According to the story, Federal magistrate John E. McDermott has ordered all seven suspects held without bail. According to McDermott’s order, the suspects are considered flight risks because:

• Joon Hwan Kim, 24, is a Korean national with no legal status. Kim declined to be interviewed by pretrial services staff.
• Guang Chen Jin, 37, is a Chinese national and has been unemployed for eight months.
• Hyung Kyu Lim, 48, is in the U.S. illegally. His mother and four siblings live in Korea.
• Suhua Lin, 54, is a Chinese national, has recently traveled to China and has family there.
• Kyounghoon Kim was using multiple identities at the time of arrest, unknown bail resources, family ties to Korea and immigration status issues.
• Andrew Byun Yoo, 56, has been unemployed for 10 years, has no relevant bail resources and has lived in four other states.
• Ju Young Chung, 36, has a prior failure to appear and an outstanding warrant.

Pair Pinched, Accused Of Clipping Homeowners For Upfront Fees In Mortgage Elimination Racket, Then Forging & Recording Phony Lien Satisfactions

In San Bernardino, California, The San Bernardino Sun reports:

• Two men suspected of scamming homeowners struggling to avoid foreclosure will be arraigned [] in San Bernardino Superior Court on a 45-count criminal complaint. Prosecutors say Stephen Andrew Easterly, 47, and Emanuel Percival, 36, defrauded at least 25 people with their Fontana business and affected more than $17 million in home loans. "Basically, they were getting people to try to redo their loans," Deputy District Attorney Michael Fermin said.



• The people were on the verge of foreclosure or wanted a lower payment, he said. The alleged victims reportedly paid between $3,500 and $7,000 to participate in a process they believed would pay off their home loans and save them from foreclosure, according to a news release Monday from the San Bernardino County District Attorney's Office. In the end, they would end up with two outstanding home loans and the houses went into foreclosure, prosecutors said.

***

• The search warrant was the result of an investigation into fraudulent Substitution of Trustee and Full Reconveyance and Release of Lien documents - which are usually recorded by a bank when a mortgage is paid in full - with the county Recorder's Office.



• In this case, Easterly and Percival signed documents as "authorized representatives" of various banks, according to prosecutors. Between the pair, more than 70 fraudulent documents are alleged to have been recorded.



• Prosecutors said Easterly also created fictitious checks, mailed them to banking institutions and told victims he was paying off their loans.



• Easterly faces 21 counts of forgery and 16 counts of procuring or offering a false or forged document from Oct. 25, 2010, to June 29, according to the criminal complaint. Percival faces four counts each of forgery and procuring or offering a false or forged document between March 23, 2010, and Nov. 24.(1)

For the story, see Two men accused of scamming struggling homeowners.

For the San Bernardino County DA press release, see Pair Arrested For Real Estate Fraud.

(1) According to the story, both men were being held Monday at West Valley Detention Center in Rancho Cucamonga. Bail for Easterly was set at $1 million, and Percival's bail was set at $500,000, prosecutors reportedly said.

Trio To 'Enjoy' Federal Prison Time For Scheme Designed To Steal Home Equity Out From Under Two Unwitting Property Owners

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

• A North Hollywood man was sentenced [] to 15 months in federal prison for his role in a mortgage fraud scheme in which the schemers used stolen identities to “purchase” homes that were not for sale.



• Venedie Roberto Valencia, 27, who worked at Bank of America at the time of the offense, was sentenced by United States District Court Judge Dale S. Fischer. In addition to the prison term, Judge Fischer ordered Valencia to pay $51,688 in restitution.



• Previously in this investigation, two of the Valencia’s co-conspirators were convicted and sentenced to prison. Felix Pichardo, 29, of Lancaster, was sentenced to eight years in federal prison in 2009 and Latrice Shaunte Borders, 31, of Long Beach, was sentenced to two years in federal prison in 2010 for their part in the scheme (see December 14, 2009 U.S. Attorney Press Release).



• According to court documents, Pichardo, a licensed real estate agent, and Borders participated in two separate fraudulent real estate sales transactions. Pichardo, using identities appropriated from other people, caused loan applications to be submitted to AmTrust without the property owner’s knowledge for real estate which was not for sale.

For the U.S. Attorney press release, see Former Bank Employee Sentenced To 15 Months In Federal Prison For Role In Mortgage Fraud Scheme.

Double-Talking Judge To Foreclosure Mill: "Lying Is Unacceptable!" But Then OKs Use Of False Affidavits Anyway, Proceeds To Ratify Forced Sale Of Home

In Baltimore, Maryland, The Daily Record reports:

• Lawyers at Shapiro & Burson LLP repeatedly lied by signing each other's names to foreclosure affidavits, but their actions did not alter the rights of the lender or the homeowners, a Baltimore County judge has ruled.



• Circuit Court Judge Susan Souder wrote in her Aug. 11 opinion that she did not believe monetary sanctions were appropriate, and that she would leave any punishment levied against the plaintiffs -- all lawyers -- to bar counsel at the Attorney Grievance Commission.



• Souder dismissed an order requiring the plaintiffs to show cause why the case should not be dismissed and why they should not be sanctioned and ratified the sale of the home.



• Anthony DePastina, director of litigation for Civil Justice Inc., a Maryland-based public interest legal association, said he understands that these homeowners and others in the foreclosure process have not paid their mortgages and that if another attorney had signed the documents correctly, the whole process would be "copacetic," but, he said, that's not what happened here.



• "The reality is we're lawyers. We're supposed to play by the rules and know what the rules are," said DePastina, who is not involved in this case. "When we don't, we compromise the integrity of the entire game. And it's not a game."



• Souder said she could not comment on the case or whether it was the first decision in the county regarding signatures on foreclosure affidavits, many of which have been questioned with show-cause orders.

***

• Souder wrote that the "most disturbing" revelation in this case (John S. Burson, et al. v. Grosso) was that Murphy falsely signed Yoder's name to affidavits regarding military status for Frank and Patricia Grosso, the notice of intent to foreclose and the appointment of substitution of trustees.



• She found it "very disturbing" that the plaintiffs argued that their lies were proper under Maryland rules. "No case, no statute, and no rule cited by Plaintiffs supports the argument that it is proper for a person to sign another person's name to an Affidavit. That Plaintiffs are attorneys who concluded that such lies are 'entirely proper' is astounding .... It is a lie. And lying is unacceptable," she wrote.



• Despite her shock at the lawyers' behavior, Souder agreed with the plaintiffs that the false affidavits "did not alter the rights of the parties."

For more, see Home sale ratified despite faulty affidavits (requires paid subscription; if no subscription, GO HERE).

Two Notorious Players In Nationwide Foreclosure Robosigning 'Phenomenon' Receive Appeals Court Recognition For Their 'Contributions' To The Effort

A recent federal appeals ruling from the 3rd Circuit Court of Appeals reinstating a bankruptcy judge's hammering of a foreclosure mill for its use of robosigned documents.(1)

While not directly involved in the litigation of the appeal, two notorious players in the foreclosure robosigning 'phenomenon' that's swept the nation nevertheless received recognition by the court for their apparently 'less-than-meritorious' contibutions to this once fast-growing industry.

Although the court 'buried' the recognition of these 'fine' outfits in two footnotes, the court's observations with regard to this pair arguably deserve some highlighting here.

In footnote 2 of the ruling, the court gives a foreclosure mill law firm its due (alterations in the original):

• Moss Codilis is not involved in the present appeal. However, it is worth noting that the firm has come under serious judicial criticism for its lax practices in bankruptcy proceedings. "In total, [the court knows] of 23 instances in which [Moss Codilis] has violated [court rules] in this District alone." In re Greco, 405 B.R. 393, 394 (Bankr. S.D. Fla. 2009)(2); see also In re Waring, 401 B.R. 906 (Bankr. N.D. Ohio 2009).

In footnote 5 of the ruling, a notorious foreclosure document sweatshop gets its due:

• LPS is also not involved in the present appeal, as the bankruptcy court found that it had not engaged in wrongdoing in this case. However, both the accuracy of its data and the ethics of its practices have been repeatedly called into question elsewhere. See, e.g., In re Wilson, 2011 WL 1337240 at *9 (Bankr. E.D.La. Apr. 7, 2011) (imposing sanctions after finding that LPS had issued "sham" affidavits and perpetrated fraud on the court); In re Thorne [and try here for more on In re: Thorne], 2011 WL 2470114 (Bankr. N.D. Miss. June 16, 2011); In re Doble, 2011 WL 1465559 (Bankr. S.D. Cal. Apr. 14, 2011).

For the court ruling, see In Re Taylor, No. 10-2154 (3d Cir. August 24, 2011).

(1) See Federal Appeals Court Reinstates Reversed Ruling Hammering Foreclosure Mill For Littering Courtroom With Robosigned Docs; Bankruptcy Judge Vindicated.

(2) See In re Greco, footnote 1, where U.S. Bankruptcy Judge John K. Olson lists the following nine cases filed in the Southern District of Florida which he ties to Moss Codilis 'handiwork:'

• (1) In re Kearse, 07-21486-BKC-JKO; (2) In re Nicholson, 08-11474-BKC-JKO; (3) In re Greco, 08-13051-BKC-JKO; (4) In re Kassar, 08-13077-JKO; (5) In re Morton, 08-18853-BKC-JKO; (6) In re Studer, 08-19300-BKC-JKO; (7) In re Buhagiar, 08-19610-BKC-JKO; (8) In re Vargas, 08-20302-BKC-JKO; and (9) In re Imburgia, 08-17153-BKC-JKO.

In footnote 2 of the same case, Judge Olson lists the following additional fourteen cases filed in the Southern District of Florida which he connects to Moss Codilis:

• (1) In re Cecil, 08-10925-BKC-RBR; (2) In re Bertke, 08-16351-BKC-RBR; (3) In re Woods, 08-11231-BKC-PGH; (4) In re Salandy, 08-12866-BKC-PGH; (5) In re Lissandrello, 08-13372-BKC-PGH; (6) In re Biggers, 08-13780-BKC-PGH; (7) In re Colon, 08-14903-BKC-PGH; (8) In re Noble, 08-15675-BKC-PGH; (9) In re Sao, 08-16549-BKC-PGH; (10) In re Shank, 08-18596-BKC-PGH; (11) In re Vega, 08-16381-BKC-AJC; (12) In re Espinoza, 08-21253-BKC-AJC; (13) In re Hargis, 08-21366-BKC-EPK; and (14) In re Brown, 08-23103-BKC-EPK.