Profile Of A Suspected Upfront Fee Real Estate Ripoff Scammer

From Phoenix, Arizona, the following excerpt has been taken from a recent investigative report by KPNX-TV Channel 12 and The Arizona Republic on upfront fee real estate ripoffs:

• [E]lizabeth Kingsley-Young, 57, runs a San Tan Valley firm called Insight Investment Group LLC that offers to help people with poor credit and previous foreclosures fund new-home purchases through private equity loans. All for an up-front fee.
  
  
• Kingsley-Young promises to find housing for families with bad credit, bankruptcies and low incomes. On its website, Insight Investment offers residential and commercial financing, rent-to-own properties, no-money-down loans, housing grants and financing seminars.
  
  
• Through its non-profit partner, Empowering Resources, the company's website says it offers "hope and restoration in the lives of individuals and families affected by poverty or any of life's other crippling obstacles."
  
  
• However, Kingsley-Young has about 15 aliases, a criminal history dating back at least 30 years and has served prison time in Texas, California and Minnesota for fraud, counterfeiting and forgery, records show.
  
  
• In Arizona, she has identified herself as a doctor, a lawyer and as having an MBA. Kingsley-Young was born and raised in Texas. An investigation by The Arizona Republic found she has been hired as a bookkeeper, mortgage-company clerk, grant writer and non-profit manager; records show those jobs all ended amid allegations of fraud.
  
  
• "You can't judge somebody's present by their pasts," Kingsley-Young said in an interview in late April. "This is a situation that has two sides." She has not been charged with any crime in Arizona. In interviews at her home and by phone, Kingsley-Young declined to answer specific questions about her business or about any of her clients.
  
  
• State records show neither Kingsley-Young nor her companies are licensed as mortgage lenders or real-estate agents. Her companies are also not registered as valid corporations in Arizona. And the IRS has no record of granting tax-exempt status to her companies, meaning they are not valid non-profits.
  
  
• Kingsley-Young rents "virtual office" space at a building in east Mesa, uses a post-office box as her corporate mailing address and does most of her business out of a home near Ironwood and Ocotillo roads in Pinal County, records and interviews show.
  
  
• An analysis of the Insight Investment Group website found that the biography of its president was picked up nearly verbatim from another company's website. Educational, vocational and property records searches found nobody living in the United States who matched the names and backgrounds of Insight's listed corporate officers.

***

• On her contract signature line, Kingsley-Young has identified herself as "Dr. Liz A. Kingsley, MBA, JD, PhD." In interviews, Kingsley-Young admitted that she is not a lawyer and does not have a law degree. She would not discuss her other credentials, but extensive records searches were unable to verify her MBA or doctorate.
  
  
• Kingsley-Young acknowledged arrests and convictions on white-collar fraud charges in Texas, California and Minnesota since the 1980s. She also has a string of civil judgments and liens for unpaid state and federal taxes since 1994.

For more, see Up-front fee for loan aid is a red flag.

Homeowner In Foreclosure Falls For Upfront Fee Loan Modification Scam That Used Deceptive Mailers Simulating Official Documents From HUD; Faces Boot

In Moline, Illinois, KWQC-TV Channel 6 reports:

• [D]iana Dreifurst of Moline is facing foreclosure on her home of ten years. Several months ago she received a letter in the mail. "From what I thought was HUD in February," said Dreifurst, "I called the number on there and they took my application over the phone."
  
  
• She thought she was applying for a loan modification through the Department of Housing and Urban Development, that would give her financial situation relief. The document looked official to her and so did the papers that came in the mail after that. "We got papers saying we were approved."
  
  
• Dreifurst sent checks totaling almost $2,000 to the agency for fees, and the next monthly payment. The checks were cashed at an account in California. But then Dreifurst was shocked to receive a court summons to put a sale date on the house. She tried calling the 888 number from the agency she sent the money to and only heard a busy tone.
  
  
• "He said you guys got scammed, don't send them any more money." Those are the words of an attorney Dreifurst said she consulted. She learned she's not only out $2,000, but could still be out of her home. "You don't know who to trust, you don't know where to turn," said Dreifurst.

For the story, see Scam Targets Homeowners Facing Foreclosure.

Two California Attorneys Near Disbarment, Another Faces Disciplinary Trial In Connection With Upfront Fee 'Mass Joinder' Loan Modification Racket

In San Francisco, California, The State Bar of California recently announced:

• Two Southern California attorneys are facing disbarment and a third faces a disciplinary trial after a joint investigation by the State Bar’s Office of Chief Trial Counsel and the Attorney General’s Office into a loan modification scam that targeted distressed homeowners, the State Bar of California announced [].
  
  
• The proposed discipline is the result of a coordinated effort in August 2011, when the State Bar and the Attorney General’s Office shut down law firms and marketing companies suspected of running a so-called “mass joinder” scam.
  
  
• Philip A. Kramer (bar number 113969), 52 of Calabasas, has agreed to be disbarred. In a stipulation accepted Friday by the State Bar Court, Kramer admitted to numerous counts of misconduct including his collection of illegal fees, failure to return advanced fees, and accepting employment in states where he was not licensed to practice law. Kramer also agreed to pay $122,000 in restitution to 27 former clients as part of the stipulation.
  
  
• Paul W. Petersen (bar number 170922), 51, of Irvine, is facing disbarment by default after he failed to appear in State Bar Court for a March 27 trial on various counts of misconduct including allegations of improper solicitation, unlawful collection of advance fees, failure to refund fees, and failure to perform services competently. Under the State Bar’s Rules of Procedure, unless the default is set aside, the State Bar Court will recommend Petersen’s disbarment to the California Supreme Court.
  
  
• Anthony J. Kassas (bar number 227647), 35, of Diamond Bar, faces trial on 285 counts of disciplinary charges. The formal charges, filed April 6 by the Office of Chief Trial Counsel, include allegations that Kassas improperly solicited clients, collected unlawful advance fees, failed to provide proper accounting of funds and aided the unauthorized practice of law by non-lawyers.

***

• According to papers filed in Los Angeles County and Orange County superior courts, the attorneys involved had contacted homeowners through deceptive mailers that looked like official documents from mortgage lenders.
  
  
• The mailers contained language such as “Litigation Settlement Notification” that caused homeowners to think they were potential plaintiffs in a “national litigation settlement.” Directing homeowners to a toll-free number for assistance, the mailers contained exaggerated promises.
  
  
• They stated that by joining a “mass joinder” lawsuit, foreclosures would be stayed, loan balances would be reduced and the homeowners would receive monetary benefits or their homes free and clear of their mortgage. Homeowners often paid retainer fees ranging from $3,500 to $10,000 but were never contacted by an attorney or included in a mass joinder lawsuit.

For more, see Attorneys In Loan Modification Scam Facing Discipline.

Nevada Regulator Belts Unlicensed Loan Modification Operation With $50K Fine, Demand For Refunds, Accounting Of Fees Clipped From Homeowners

In Carson City, Nevada, the Las Vegas Sun reports:

• The state is imposing a $50,000 fine on an unlicensed Las Vegas company accused of boasting that it can help troubled homeowners get relief from their loan burdens. The state Division of Mortgage Lending has issued an order for My State Processing, Minerva V. Young and David Young to stop promoting they can negotiate loans.
  
  
• The order directs My State, [...], to refund $13,475 to six homeowners who hired the company but never got any results. An attempt to reach My State or the Youngs was unsuccessful. Their listed telephone number was not in service.
  
  
• The state’s cease-and-desist order bars My State from advertising itself as a loan modification or foreclosure consultant and conducting that type of business. My State can ask for a hearing within 20 days to challenge the state order.
  
  
• The order directs My State to pay the $50,000 fine within 30 days and orders the company to submit to the state a list of every client, their contract and the amount paid to the Las Vegas firm. The division also ordered My State to reimburse the state $1,020 it spent in its investigation.

Source: State imposes $50,000 fine on company advertising mortgage relief.

NYC Attorney, Associate Use Owner Financing Scam To Swindle Elderly Woman's Multi-Million $ Harlem Building, Pocketing $1.8M In Mortgage Proceeds

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

• Preet Bharara, the United States Attorney for the Southern District of New York, [and others] announced charges [] against IFEANYICHUKWU ERIC ABAKPORO and LATANYA PIERCE for allegedly swindling an elderly woman out of her multi-million-dollar property in Harlem that she had owned for more than 40 years, and then deceiving a bank into giving them a $1.8 million mortgage loan secured by the property. ABAKPORO was arrested Monday in Queens, New York, and PIERCE was arrested yesterday after voluntarily surrendering to the FBI.

***

• Beginning in March 2006, ABAKPORO, a lawyer with an office in Brooklyn, New York, and PIERCE, who worked for ABAKPORO, cultivated a relationship with an elderly woman (“the Victim”) who owned a residential apartment building worth millions of dollars located at 1070 St. Nicholas Avenue in Harlem (the “Property”).
• As part of the fraud scheme, ABAKPORO and PIERCE earned the Victim’s trust by, among other things, offering to help her manage the Property. This included collecting rent from its tenants on her behalf. However, instead of providing the Victim with the renters’ money, ABAKPORO and PIERCE pocketed it.
• ABAKPORO and PIERCE then convinced the Victim to sell her property to them for $3.1 million. While they contracted to buy the property for that amount, at the closing, they presented the Victim with multiple fake and fraudulent checks to make it appear as if they had paid the contracted sale amount, when in fact they had not.
• Moreover, after the Victim’s attorney had left the closing, ABAKPORO and PIERCE fraudulently induced her to return all of the checks to them by representing that they would safeguard her money and give her a “private mortgage” in the Property, which they explained would include monthly payments made to her based on the money she had effectively loaned them.
• As part of the scheme, ABAKPORO and PIERCE signed and provided the Victim with a written agreement representing that she had loaned them approximately $1.9 million and in return held a “private mortgage” in the Property. Unbeknownst to the Victim, ABAKPORO and PIERCE never recorded the private mortgage and subsequently submitted a fraudulent application to Washington Mutual Bank seeking a $1.8 mortgage loan secured by the Property.

***

• As a result of the alleged fraud, the defendants obtained substantially all of the Victim’s assets, and $1.8 million in fraudulently obtained mortgage proceeds. The Property went into default.

For the U.S. Attorney press release, see Manhattan U.S. Attorney Announces Arrests Of Two Individuals In Multi-Million Dollar Scam Involving Elderly Woman.

Sale Leaseback Peddler Pinched On Multiple Larceny By False Pretense Charges In Alleged Racket Targeting Homeowners w/ Bad Credit, Facing Foreclosure

In South Easton, Massachusetts, WPRI-TV Channel 12 reports:

• After ten months of investigating, Joshua Leventhal was arrested on ten counts of larceny over $250 by false pretense. Easton Police and Norton Police officers arrested 41-year-old Leventhal after executing a search warrant of his house.
  
  
• Authorities say Leventhal would offer to purchase property from the victims and rent it to them on a rent-to-own basis - usually taking a $1,000 “commitment deposit" from the victims, police said. The victims were contacted through websites such as www.rent2ownconnect.com , www.hslhomes.com , and www.craigslist.com and lost between $1,000 and $8,000.
  
  
• Investigators say Leventhal targeted people with bad credit or those who were losing their homes. He is accused of scamming people around the country. Police say they believe there are a large number of victims. The incident remains under investigation. If you believe you have been a victim or know someone who was involved, please contact Easton Police at 508-230-3322.

Source: Suspect arrested in rent-to-own scam (Victims found on various sites lost thousands).

Homeowner, Wanna-Be Homebuyer Under Rent-To-Own Contract Left In Financial Ruins As Shady Broker Keeps Real Estate License, Faces No Criminal Charges

In San Jose, California, San Jose.com reports:

• [A]fter nearly three decades of saving, J.R. [Sandoval] and his wife, Marcelina, parents of three children, had done it. Buying a home for the first time never seemed so simple, and they put $40,000 in life savings to improving their new house. In reality, though, the Sandovals owned nothing.
  
  
• According to the Sandovals, [real estate broker Ken] Gervais told the unsophisticated homebuyers they were signing up for a rent-to-own contract, yet Gervais was pocketing at least a portion the rent—with no intention of ever transfering ownership. In early 2006, when the Sandovals started to prepare their taxes, and claim a first-time homebuyer’s credit, Gervais’ scheme started to unravel. The broker offered to file their returns for them, which seemed fishy to them.
  
  
• “I went to see my tax guy and he did a little checking for me,’ Sandoval says. “He called me up two or three days later and he said, ‘J.R., you don’t even own the home.’ And the nightmare began.’
  
  
• On April 18, 2006, Sandoval and one of his sons returned home to find the house locks changed. Almost two years later, a Superior Court judge would agree with an arbitrator’s ruling that Gervais created a fraudulent contract and illegally evicted the family.
  
  
• Gervais has not faced criminal charges. Gervais was ordered to pay half of a $469,798 judgment along with the house’s true owners—the second victim in this story.
  
  
• While Gervais duped the Sandovals, he also playing Rakesh Vazir and his wife[, the home's owners]. He told the Vazirs—who wanted to invest in property before moving from San Jose to Texas—that they qualified to buy a home without so much as a down payment. A tenant’s monthly rent, the Vazirs say Gervais told them, would cover the monthly mortgage.
  
  
• But when the Sandovals were evicted, rent payments ceased and the Vazirs found themselves not only facing a foreclosure but also liable for damages from Gervais’ fraudulent contract to sell the home to the Sandovals.
  
  
• “It’s hard for me to trust anybody now because of what happened,’ Vazir says over the phone. He says the ordeal has left him financially ruined aside from a motel his family owns in San Antonio, Texas. “We are victims to this as well. I feel bad for what happened to [the Sandovals], but we are victims of [Gervais], too.’
  
  
• John Crowley, an attorney who has represented the Sandovals since they were evicted in 2006—and is owed about $230,000 of the settlement in attorney fees, costs—is of the opinion that Gervais is “a danger to the community.’ When Crowley informed officials at the state Department of Real Estate of Gervais’ actions, they seemed to agree. Surprisingly, the agency that licenses Gervais says it’s helpless to stop him.
  
  
• Gervais didn’t return multiple messages seeking comment. He continues to sell homes in the South Bay.

***

• The [California Department of Real Estate] does offer a provisional recovery fund. If a consumer cannot collect on fraud by an broker, the license will be suspended and a maximum payout of $50,000 could be awarded. But that would still leave the Sandovals owing their attorneys more than $230,000.

For more, see Real Estate Agents Losing Licenses in California (A family loses its home, money to a shady real estate broker—one of many operating in California).

Disbarred Attorney Gets 18 Months For $1M+ Real Estate Escrow Ripoff; Funds Intended To Pay Off Clients' Mortgage, Property Taxes, Insurance

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

• A disbarred former Cranston lawyer has been sentenced to 18 months in prison for stealing about $1.1 million from his clients. The Providence Journal reports that Robert Natal of East Greenwich cried and took responsibility for his crimes during Tuesday's sentencing in Providence Superior Court. He pleaded guilty in February to 10 counts of unlawful appropriation.(1)
  
  
• Authorities say the married father of five took money his clients gave him to pay off mortgages, taxes and insurance premiums and spent it on travel, groceries and restaurant meals.One of his victims was retired Army officer Albert Rose, who hired Natal to handle a real estate closing in 2009. Rose's son, Staff Sgt. Scott Rose, had recently been killed in Iraq. Natal is set to begin his prison term June 11.

Source: Disbarred lawyer sentenced to 18 months (Convicted of stealing about $1.1M from clients).

(1) The Rhode Island Bar Association's Client Reimbursement Fund was established to provide a public service and to promote confidence in the administration of justice and the integrity of the legal profession by providing some measure of reimbursement to victims who have lost money or property because of theft or misappropriation by a Rhode Island attorney, and occurring in Rhode Island during the course of a client-attorney relationship.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (now includes Canadian recovery funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

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

Woman Who Copped Guilty Plea For Peddling Fraudulently-Obtained Mortgage Loans Used To Finance Sale Leaseback Equity Stripping Ripoffs Gets 37 Months

In Baltimore, Maryland, The Baltimore Sun reports:

• A Severna Park woman was sentenced Tuesday to just over three years in prison after pleading guilty to a mortgage scam involving $4.7 million in fraudulent loans, the Maryland U.S. attorney's office said.
  
  
• Mary Anne Dean, 60, brokered loans in a scheme pitched to homeowners trying to avoid foreclosure, according to her plea agreement. The homeowners were told they could sell to investors, stay on as renters, and then buy back their homes after getting their finances in order.
  
  
• Dean, who ran a mortgage brokerage firm called Sunset Mortgage Co. from her home, submitted falsified mortgage applications to secure the loans for the "investors" — relatives and acquaintances of a co-defendant, Charles Donaldson of Bowie. Donaldson said he would set aside most of the homeowners' equity to help with the rent and mortgage payments, but instead he spent it on himself, according to the plea agreements.
  
  
• Donaldson was sentenced in March to three years and five months in prison. As a result of the scheme, homeowners lost at least $1.2 million in equity, lenders lost more than $940,000 and 13 homes have been foreclosed on, the Maryland U.S. attorney's office said.

Source: Severna Park resident sentenced in mortgage fraud case.

For the U.S. Attorney (Baltimore, Maryland) press release, see Mortgage Broker Sentenced to over 3 Years in Prison in Fraudulent Mortgage Rescue Scheme Resulting in Losses of over $1.2 Million to Homeowners in Financial Distress.

3 Get Multi-Year Prison Terms For Roles In Mortgage Scam; One Victim Lost Equity, Title To Home After Signing Papers Purporting To Be Home Equity Loan

From the Office of the U.S. Attorney (Houston, Texas):

• Claymon “Butch” Trammell along with his wife and daughter, all of Houston, have been sentenced to federal prison for their respective roles in a multi-million dollar mortgage fraud scheme, United States Attorney Kenneth Magidson announced today. Trammell, 62, his daughter Michelle Trammell, 40, and wife Jeannettea Williams, 57, all previously entered guilty pleas for one count of conspiracy to commit wire fraud.
  
  
• Today, United States District Court Judge Vanessa Gilmore heard testimony from a an man victimized by North Belt Mortgage, the business from which defendants ran their fraud scheme until 2005. The victim reported he went to North Belt looking for a home equity loan to help him buy an 18-wheeler for his business.
  
  
• The victim, who did not speak English, had been paying on his home mortgage for 21 years and was close to having the home paid in full. He testified that Claymon Trammell and others, using a translator, told him to sign papers for a home equity loan.
  
  
• Unbeknownst to the victim, however, he actually signed papers selling the home with Claymon Trammell receiving the equity from the sale. Not only did the victim get no money, but he was later forcibly evicted from his home because he no longer owned it, leaving him and his family homeless for a period of time.
  
  
• Following the testimony, Judge Gilmore assessed the maximum punishment of 60 months each for Claymon Trammell and Williams, while Michelle Trammell was sentenced to 36 months. Each defendant was also ordered to pay $907,000 restitution to various mortgage lenders.
  
  
• There were more than 70 homes involved in the scheme, all of which went into payment default and most into foreclosure. The defendants caused lenders to fund loans to purchase more than 70 homes in the Houston area and personally benefitted, jointly, by funneling some of the loan proceeds to themselves via businesses they controlled and/or owned via bogus repair invoices and realtor and loan officer commissions.

For the U.S. Attorney press release, see Three Family Members Land in Federal Prison for Mortgage Fraud (Each Ordered to Pay Nearly $1 Million in Restitution).

Texas Man Gets 61 Months For Running Foreclosure Rescue Racket Involving Fractional Interest Deed Transfers To Unwitting Debtors In Bankruptcy

In Austin, Texas, the Austin American Statesman reports:

• A Lakeway man who pleaded guilty this year to bankruptcy fraud and aggravated identity theft after he was paid to fraudulently delay foreclosures was sentenced Thursday to two consecutive prison terms totaling 61 months.
  
  
• Frederic Alan Gladle, 53, also was ordered to pay $214,258 in restitution and was told that after his prison term he won't be allowed to work in the mortgage or financial industries during his three-year supervised release. He also had to forfeit belongings, including prepaid debit cards and cash, seized during an investigation. Gladle has 14 days to appeal the sentence.

***

• From 2007 until his arrest in October, Gladle operated a business that helped distressed property owners delay foreclosure by paying a monthly fee — usually about $750 a month, according to prosecutors and charging documents. Through the course of the scheme, Gladle and his unnamed associates collected $1.6 million from clients and delayed the foreclosure sales of more than 1,100 properties, according to the documents.
  
  
• After clients signed up for Gladle's services, one of his salespeople had them sign deeds transferring a fractional share — usually one one-hundredth — of their distressed property, the documents said. The shares were transferred to an unrelated person who had previously filed a bankruptcy petition in court, the documents said. Those people were unaware that Gladle was using their names, which were obtained from online court records, the documents said.
  
  
• Gladle, or "a co-schemer operating at his direction," would then send a copy of the fractional deed and a copy of the unrelated person's bankruptcy petition to the lender that was expected to foreclose, the documents said. Because bankruptcy proceedings automatically delay foreclosure actions, the lender would not be able to immediately foreclose on Gladle's client's property, the documents said.
  
  
• Eventually, after the unrelated debtors claimed they knew nothing about owning the fractional interest, the foreclosure continued, according to the documents. Gladle would then go through the process again, causing further delay, the documents said.

For the story, see Man sentenced to 5 years in scheme to delay homeowner foreclosures.

Cash-Out Refinance Ripoffs Among Bad Acts Leading To Conviction OF N.Virginia Real Estate Operator; Overall Scheme Involved Over Two Dozen Homes

From the Office of the U.S. Attorney (Norfolk, Virginia):

• Nadin Samnang, 29, of Ashburn, Va., has been convicted by a federal jury for his role in fraudulent mortgage loan transactions involving at least 25 homes in northern Virginia and more than $7 million in losses to lenders. Samnang is a District of Columbia real estate developer and was formerly a realtor with Monorom Realty and Fairfax Realty in Virginia.

***

• According to court records and evidence at trial, from 2006 to 2008, Samnang used his position as a realtor and the owner of a title company to engage in a scheme to defraud mortgage lenders and profit from loan proceeds, commissions, and bonus payments. Samnang and other members of the conspiracy recruited unqualified buyers — usually individuals with good credit but insufficient assets or income to qualify for a particular loan — and used them as nominal purchasers in residential real estate transactions.
  
  
• As part of the conspiracy and fraud scheme, Samnang and others falsified mortgage loan applications, created fake documents to support the fraudulent applications, and added the unqualified buyers as signatories on their bank accounts to make it appear to lenders as though the buyers possessed sufficient assets to qualify for the loans.

***

• [As part of the scheme,] Samnang would [] profit by arranging for cash-out refinances to be done for these borrowers, retaining most of the loan proceeds for himself, and paying kickbacks to the loan officer who had processed the fraudulent loans.

For the U.S. Attorney press release, see Ashburn Realtor Convicted In $7 Million Mortgage Fraud Scheme.

NJ Homeowner's State Court Class Action Civil Suit Targeting Alleged Tax Lien Foreclosure Sale Bid Rigging Racket Moves To Federal Court

In Lebanon Township, New Jersey, the Hunterdon County Democrat reports:

• Defendants in a class-action suit initiated by a Lebanon Township homeowner have until June 1 to file their answers to the complaint. Jeanne Boyer, who has been fighting to save her own home from foreclosure, filed the suit on behalf of herself and potentially thousands of other homeowners in similar situations.
  
  
• The suit was filed in Hunterdon County Superior Court on March 13 and removed to federal court on March 28.
  
  
• Boyer alleges that she is one of many victims of a bid-rigging scheme that allowed tax lien investors to charge the highest amount of interest allowed by law. Since the suit was filed, two more people and a company have pleaded guilty in federal court. Several pleaded guilty in federal court to Sherman Act violations by conspiring to eliminate any competition at tax sales.

***

• Boyer was about to lose her home on Musconetcong River Road unless she came up with a total of $113,500 by March 15. Of that amount, more than $64,000 is accumulated interest. However, Superior Court Judge Yolanda Ciccone granted a temporary restraining order in light of a class action suit initiated by Boyer through attorney Michael Perle. A decision on a motion to extend the injunction until the class action suit is resolved is still pending.

For more, see Defendants in tax lien class action suit have until June 1 to file answers.

Bankster Requests Transfer Of West Virginia Homeowner's State Court Predatory Lending, Loan Flipping Suit To Federal Court

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

• One of West Virginia's largest banks has asked that a lawsuit brought against it for predatory lending be moved to a federal court(1). Earlier this month, Huntington National Bank submitted an eight-page notice of removal to have the suit transferred to the U.S. District Court for the Southern District of West Virginia.
  
  
• Plaintiff Gary Miller sued the bank, its mortgage group and three other defendants in Kanawha County Circuit Court in December 2011. Miller accused them of "flipping," or using inflated appraisals and other unlawful practices to induce "unsophisticated" consumers into a series of unwise and expensive loans.
  
  
• Flipping maximizes fee income to banks, but strips homeowners of equity in their homes, pushing them into default and, in some cases, foreclosure.

For more, see Bank wants suit over lending practices transferred.

(1) An ABA Journal article (see Judge Says Firm Must Explain ‘Fraudulent’ Removals or Pony Up $25K) offers this observation on the legal maneuver used in this story by Huntington National Bank to find a friendlier forum to defend against this lawsuit, one commonly used in civil cases by big-time corporate defendants and their white-shoe law firms in lawsuits brought by (possibly under-financed) individuals and other plaintiffs on behalf of individuals, of moving a case from a state to a federal court:

• [I]t is widely believed that plaintiffs, particularly individuals rather than corporations, fare better in state courts where they have greater likelihood of getting to a jury and often benefit from more favorable interpretations of law. Defendants in turn tend to prefer the federal courts. Thus removals can become a cat-and-mouse game in which a plaintiff names a party having nothing to do with the matter as one of the defendants to prevent the other side from removing the matter to federal court. That court can find fraudulent joinder and keep the case or remand it.

• But studies have shown a greater increase in recent years of defendants removing cases to federal court, only for them to be dispatched back to state court for erroneous removal. One researcher, a third-year student at New York University School of Law, found that most often in such situations, the plaintiffs are individuals. And the rate of their cases being remanded back to state court is higher, too, wrote Christopher Terranova in last summer’s edition of the Willamette Law Review (PDF).

• He adds that “the delays and costs of that extra procedural step to federal court are more costly and burdensome for most individual plaintiffs than they are for bigger defendants with more assets."

For the above-referenced Willamette Law Review article, see Erroneous Removal As A Tool For Silent Tort Reform: An Empirical Analysis Of Fee Awards And Fraudulent Joinder (article also available at http://ssrn.com/abstract=1073402).

For an example of one Federal judge excoriating a lawyer and law firm for, according to the judge, their history of fraudulent removal requests of cases from state court to Federal court, see Hollier v. Willstaff Worldwide, Case 6:08-cv-01382-TLM-CMH (W.D. La. 2009):

• Sadly, the Court is not surprised by G.W. Premier’s counsels’ tactics in this proceeding as Ungarino & Eckert, L.L.C.’s reputation proceeds it. This case is but one in a long line of fraudulent and improper removals that Ungarino & Eckert, and more specifically Matthew Ungarino, have filed in this and other districts. [...] [For more, see Hollier v. Willstaff Worldwide (pp. 4-9).]

S. Fla Woman In F'closure Among 350+ Allegedly Screwed Over By Investment Peddler Who Used Faith To Target Churchgoers; SEC: Racket Was A Ponzi Scheme

In Broward County, Florida, WSVN-TV Channel 7 reports:

• A man who preached at South Florida churches is now accused of running a huge Ponzi scheme. And investigators say his victims were the church members who trusted him.

***

• Darrilyn Bryant-Hudson: "My house is in foreclosure. Devastating, devastating. I'm sorry." Darrilyn Bryant-Hudson says she lost her retirement savings of $250,000 after investing with [Ephren Taylor, Jr.]. He preached at her Pembroke Park church promising "biblically sound financial advice." "When you come to church, me especially, you are trustworthy. You don't expect anybody from the outside to come into the congregation to tell lies and to deceive you."
  
  
• And now the Securities and Exchange Commission says that's exactly what happened to Darrilyn and hundreds of others. Eric Bustillo, SEC: "This was nothing but a fraud from the beginning." In a scathing lawsuit the SEC charges Taylor "operated a Ponzi scheme to swindle over $11 million, primarily from African-American churchgoers."

***

• Calling himself a social capitalist, Taylor used faith to convince church members their money would be used to buy businesses in disadvantaged communities. Eric Bustillo, SEC: "These investors put their money in thinking that they were investing with somebody who truly wanted to do some good, who truly had a track history as he claimed he had and in reality it turned out to be it was all false." Officials say more than 350 investors were taken by Taylor.
  

For more, see Loss of Faith Follow-Up.

For the SEC lawsuit, see SEC v. City Capital Corporation, et al. (Go here for SEC press release).

See also, The Huffington Post: SEC Charges Ephren Taylor II For Allegedly Bilking Churchgoers In $11 Million Ponzi Scheme.

Florida Cop Accused Of Claiming Improper Homestead Tax Break Dodges Felony Conviction With Plea Deal; Quits Force

In Monroe County, Florida, the Florida Keys Keynoter reports:

• Although he avoided having a criminal record by entering into a plea agreement [...], whether suspended state law enforcement agent Vince Weiner will keep his police certification is still very much an open question.
  
  
• Weiner, on extended leave from his job as a Keys-based agent for the Florida Department of Law Enforcement, pleaded no contest to petit theft and paid $223 in court costs, $75 in prosecutorial fees and $40 to the FDLE in investigative fees; presiding Circuit Court Judge Mark Jones withheld adjudication.
  
  
• Weiner, 47, was charged last Aug. 17 with felony grand theft and misdemeanor homestead-exemption fraud. Here's what prosecutors allege: Weiner bought a Big Pine Key house in 2005, then got assigned to Fort Myers in 2006. While living in Southwest Florida, Weiner rented his Keys house while still claiming the homestead exemption from 2007-10.
  
  
• Florida homeowners are allowed one homestead exemption, which allows for a property-tax break on their permanent residence. It can be claimed only when the owner lives in the house.
  

For more, see Suspended FDLE agent pleads no contest to theft.

For story update, see Disgraced FDLE agent quits following plea deal (Vince Weiner, a Keys-based Florida Department of Law Enforcement agent, will resign effective May 1 following his no-contest plea on Monday to petty theft).

Cook County Officials Call On Illinois Lawmakers For Strong Laws To Pursue Real Estate Tax Cheats Making Improper Homestead Exemption Claims

In Chicago, Illinois, the Chicago Tribune reports:

• Cook County Board President Toni Preckwinkle and Assessor Joe Berrios on Tuesday urged state lawmakers to give them more power to go after property owners who improperly claim tax breaks, saying they could recover more than $150 million in three years with the new authority.
  
  
• Under legislation pending in Springfield, counties could go after back taxes from people who have wrongly received homestead exemptions. The tax break should only be applied to a property owner's primary residence, but people often also claim it for rental properties, vacation homes and secondary residences.
  
  
• Other property owners get inappropriate property tax reductions for being a senior citizen, disabled person or disabled veteran.

***

• Based on the number of exemption cheats he said he has found to date, Berrios estimated $154 million would be returned to the county, school districts and the like during the first three years the plan was in effect.

For more, see Cook leaders want property tax exemption crackdown law.

Sweep Of Improper Homestead Claims Asserting Real Estate Tax Benefit Entitlements Continues In Indiana

In Porter County, Indiana, the Post Tribune reports:

• Owners of multi-family dwellings such as apartments who live in those buildings face a bad news/good news scenario in Porter County.
  
  
• The bad news is, hundreds of them have been receiving homestead property tax exemptions for entire buildings, not just the units they live in, resulting in thousands of dollars owed to the county. The good news is, they can go to Porter County Auditor Bob Wichlinski’s office and get their exemptions straightened out without having to pay back taxes or penalties. If they put off that task until next year, though, they will have to pay those back taxes and penalties.
  
  
• Letters went out to property owners saying they were in violation of the homestead exemption late last week, Wichlinski said Thursday. Given the scope of the problem, and the fact that there is no way to know whether property owners were purposefully dishonest when filing the necessary documents at closing when they took ownership of their buildings, his office decided to give property owners amnesty — for now.
  
  
• “We’re going to notify everybody who’s in this condition, we’re not going to seek back pay but starting in ’12 — pay in ’13 — we’re going to get it right,” Wichlinski said, adding the number of property owners is “in the hundreds — that we know of.”
  
  
• That certainly provides property owners a break; Wichlinski said one owner who came in owed around $12,000 in back taxes and penalties. The county has been working to verify homestead exemptions, and the multi-unit buildings are just the most recent phase of that sweep, Wichlinski said.
  
  
• Through early April, the auditor’s office has collected more than $1.4 million from single-family home owners who were committing homestead exemption fraud, he said.

Source: Porter County finds homestead exemption problems.

Suit: Taser-Toting HOA Guards Mistakenly Storm Foreclosed Condo, Hold Unwitting Residents Against Their Will For Two Hours, Then Apologize For Error

In Sacramento, California, Courthouse News Service reports:

• Nine condo residents claim Taser-toting private security guards burst into their homes at 3 a.m. and assaulted them, forcing them into the street in their underwear, in a foreclosure the residents had never been informed of.

***

• After a default judgment was issued, "in the wee hours of April 30, 2011, defendants came onto plaintiffs' residence, uninvited, at approximately between 3 a.m. and 3:30 a.m., performing a military style raid of plaintiffs' residence," according to the complaint.

***

• Saxon says he explained to a security officer that he had been paying all of the utilities and the security officer said that, "'between you, me and the lamppost, the homeowners' association is over-zealous." "The security officers apologized and said it was all a misunderstanding, and then left," the complaint states.
  
  
• "They occupied and controlled the premises approximately two hours, holding plaintiffs against their will and preventing them by the use of force and/or the threat to use force for freely moving and entering their residence. ...
  
  
• "During this approximate two-hour ordeal, the armed men threatened arrest and incarceration, menaced the plaintiffs with weapons, engaged in intimidation, positioning themselves immediately in front of and/or behind the plaintiffs, glaring at them menacingly and invading the plaintiffs' space."
  
  
• When the plaintiffs returned to their homes, they saw that their personal belongings had been sifted through, and one man discovered that "naked photos of his girlfriend and himself ... had been taken."
  
  
• The plaintiffs seek damages for trespass, extortion, assault and battery, false imprisonment, invasion of privacy, conversion and intentional infliction of emotional distress.

For more, see The Foreclosure From Hell.

See also, CBS Local 13: Condo Tenants Suing Paladin Security Over ‘Raid’.

For the lawsuit, see Saxon, et al. v. Paladin Protection Services, Inc., Jasmine Homeowners Association, et al.

WV High Court: Lender Not Obligated To Disclose Environmental Tainting At Foreclosure Auction; Ruling Leaves Winning Bidder Holding Contaminated Bag

In Charleston, West Virginia, The State Journal reports:

• A bank was not required to disclose environmental contamination issues of a Bluefield property purchased at an auction foreclosure sale, West Virginia Supreme Court justices ruled in an April 27 memorandum decision.
  
  
• Danny E. Lusk and Gordon M. Lusk II filed their suit in Mercer County Circuit Court against First Century Bank, Regency Real Estate and Auction Co. and Cooper Industry asserting Cooper negligently contaminated the property and failed to remediate contamination. The Lusks also asserted the bank had a duty to disclose such contamination.

***

• The Lusks purchased the Bluefield property in 2006, asserting they received assurance from an auctioneer and a First Century Bank representative that the property was clean, documents stated. According to court documents, the Lusks placed a bid of $49,000 for the property and later received a notice of trustees' sale along with an advertising notice for the sale that stated it was subject to environmental regulations and the property was sold "as is." Therefore, the property would be sold without a warranty.
  
  
• The Lusks also received a notice of potential liability from the U.S. Environmental Protection Agency, which notified the Lusks they may be responsible for the cleanup of the property. Documents note the EPA had not sued the Lusks for remediation costs at the time briefs were filed.

***

• On appeal, the Lusks argued the circuit court should not have granted summary judgment in favor of the bank on assertions of intentional failure to disclose contamination and breach of good faith. The Lusks additionally argued a real estate seller has a duty to disclose a property's defects and if a seller fails to do so, it constitutes constructive fraud. The foreclosure deed, the Lusks argued, constituted a contract with the bank and would be sufficient to form the assertion of a breach of duty of good faith and fair dealing.
  
  
• According to court documents, the circuit court found a trust creditor under a deed of trust does not own an interest in the property and concluded a creditor under a deed of trust is not required to make disclosures concerning the condition of a property being sold.
  
  
• The circuit court ruling also held petitioners did not have a contractual relationship with the bank and they purchased the property with constructive notice. The circuit court's ruling noted the Lusks purchased the property "as is."
  
  
• In a 4-1 vote, West Virginia Supreme Court justices said they found no errors in the circuit court's ruling and affirmed the decision. Justice Brent Benjamin dissented from the majority's ruling.

For more, see WV Supreme Court issues memorandum decision in contaminated property suit.

For the ruling, see Lusk v. First Century Bank, NA., No. 11-0665 (WV April 27, 2012).

Up For Re-Election, Nevada State Senator/Law Partner In Firm Representing F'closure Document Mill Slips & Slides His Way Around Robosigning Questions

In Las Vegas, Nevada, KLAS-TV Channel 8 reports:

• Robo-signing left tens of thousands of Nevadans not knowing if they own their home. State leaders take a near unanimous stand against it but one Nevada politician may be voting one way, while profiting another way.
  
  
• State Senator Greg Brower joined a near unanimous vote last year in a high-profile bill combating robo-signing. The Reno-area Republican is in one of the most competitive races in the state. The power balance at the state capital is at stake. But perhaps, more important, a clear answer From Brower on the question: Is robo-signing good or bad?

***

• Brower is Nevada's former U.S. Attorney. He's now a partner at a private law firm paid to represent Lender Processing Services. Nevada's attorney general sued that company for what the state calls the largest case of illegal robo-signing. Brower's fellow attorneys filed a court paper which states robo-signing is not illegal; it is expressly permitted, and is not forgery.
  
  
• The I-Team wanted to see if Brower himself supports robo-signing. At first, he told us, on the phone, he had nothing to do with the high-profile robo-signing case. The I-Team wanted Brower to explain his position. His office canceled one interview and postponed several times. Finally the I-Team caught up to Brower at a Las Vegas legislative hearing at the end of the lunch break.

For more, see Former U.S. Attorney Questioned on Robo-Signing.

Title Industry Survey Respondents Evenly Divided On Which Type Of Real Estate Fraud Is Of Most Concern

From a recent press release from Ernst Publishing Company:

• Ernst Publishing Company has released the results of a title industry survey, revealing thoughts and perceptions held by industry insiders regarding mortgage fraud. The survey touched about 9,000 industry participants, many of whom provided detailed answers.
  
  
• About 40 percent of respondents felt that fraud in real estate transactions had increased in the last year, while the respondents were evenly divided on the topic of which type of fraud they were most concerned about. Among the choices: Robo-signing, identity theft, integrity of the record, fraud within the loan transaction, and foreclosure fraud.

For more, see Ernst Survey Reveals Industry Take on Mortgage Fraud (It’s a growing problem and players in the mortgage space are ready to take action).

Homeowner Activists Will Be Crushed Under Their Own Weight

Columnist Richard Zombeck writes in The Huffington Post:

• Homeowner activists will be crushed under the sheer weight of their gigantic egos; 11 million blogs, websites, and Facebook pages; intellectual dishonesty; Internet turf wars; and a stranglehold on information -- leaving homeowners sifting through debris for decades.
  
  
• Since 2009, which by most people's naive assessment is when the housing crisis and foreclosure fiasco began, the Internet has become littered with self-proclaimed mortgage experts and homeowner activists doing little more than drawing attention to themselves and pointing to their manufactured biographies and made up resumes. A vast majority of these bloggers do little to help homeowners and, in many cases, are doing irreparable harm with histrionics, inane screeching, disparate calls to action, and ignorant advice for struggling and desperate homeowners.
  
  
• Every once in a while someone will pop up in the news or on a blog to take personal credit for having exposed "robo-signing" or for having coined the term "mortgage servicing fraud." The media has been all too accommodating and eager to present these clowns as "citizen heroes" without a shred of research into their backgrounds, expertise, or credibility.
  
  
• As a result, these re-branded former traders, mortgage brokers, and, in some cases, convicted felons are allowed to pass themselves off as concerned citizens. In actuality, much of the mortgage mess was being discussed long before what many consider ground zero - as early as 2005 in some cases. (See: ML-Implode, MSFraud, and GetDShirtz.)

For more, see Homeowner Activists Will Be Crushed Under Their Own Weight.

Tenants Accuse Bldg Manager Of Lease-Purchase Scam After Discovery That Foreclosure Action Predated Rent-To-Own Contracts; Duped Victims Face The Boot

In Rockaway, Queens, the New York Daily News reports:

• It was supposed to be a dream home by the ocean — but instead turned into a sea of red tape. Management at the Metroplex on the Atlantic, a 15-story luxury apartment complex in Far Rockaway, offered prospective homeowners a rent-to-buy contract.
  
  
• But after a year of plunking down money on above market-rate rent and on improvements for units they hoped to someday own, some would-be homeowners now say they were duped. The building was going into foreclosure, a process that would void their contracts.
  
  
• “I was sick to my stomach when I heard,” said single mom and registered nurse Andrea Ahanonu. Residents said they were taken with building manager Jerzy Szymcyzk, a charismatic 62-year-old who would playfully demonstrate headstands for them.
  
  
• Karla Shah said she agreed to pay $1,600 a month for a one-bedroom unit, above market rate in the neighborhood, if it meant soon owning a condo in a building with a sweeping ocean view. Shah, like her neighbors, believed she was signing a contract that would let her to buy the unit in a year. She said she also had a gentleman’s deal with Szymczyk that 3% of the rent would go toward a downpayment. “I was so close to getting a loan approved,” said Shah, who teaches English as a second language.
  
  
• But last fall, the tenants were surprised to learn the building was in foreclosure and their contracts were invalid. Furthermore, court papers show the foreclosure began in September 2010, even before Szymcyzk signed up prospective buyers.
  
  
• The tenants had two options: continue paying the pricey rents without a rent-to-own agreement or leave their homes. Many of the tenants have since stopped paying rent and have received eviction notices from the property’s receiver, Walter and Samuels Inc. Residents blame the smooth-talking Szymczyk for pulling the wool over their eyes.
  
  
• But Szymczyk said the tenants didn’t read the contract carefully and denied there was a 3% gentleman’s agreement. He also blamed the foreclosure receiving company for not honoring the rent-to-buy deal. Walter and Samuels did not return a call seeking comment. “I didn’t cheat no one,” said Szymcyzk, who has an unrelated labor lawsuit pending against him filed by Metroplex employees.
  
  
• Meanwhile, the building is deteriorating. Its elevators now have four violations with the city Buildings Department, an empty pool sits on the unlocked rooftop and a broken garage door allows anyone to slip in the building unnoticed. “I just want this to be over,” said Ahanonu. “I want my money — that’s what I want and then I’m gone.”

Source: Rockaway residents say they lost thousands after rent-to-own building went into foreclosure (Tenants say Metroplex on the Atlantic manager knew their contracts would soon be voided).

Force-Placed Insurance Racket Alleged In Federal Suit Tagging GMAC, Notorious Provider w/ Charges Of Illegal Kickbacks That Screwed Homeowners

In New York City, the law firm Kirby McInerney LLP recently announced:

• The law firm of Kirby McInerney LLP has filed a class action lawsuit in the United States District Court for the Southern District of New York against GMAC Mortgage, LLC and Balboa Insurance Company in connection with an allegedly unlawful kickback scheme involving force-placed insurance.
  
  
• The case is brought on behalf of a putative class consisting of all residential mortgage borrowers who have been charged costs associated with force-placed insurance in connection with loans serviced by GMAC at any time from March 6, 2003 to the present. The case alleges that GMAC, a mortgage loan servicer, extracted kickbacks or bribes from Balboa, a provider of force-placed insurance coverage, which artificially inflated reimbursements sought by GMAC from borrowers.
  
  
• To protect the lenders' interest in secured property, mortgage loan contracts require the borrower to maintain specified levels of hazard insurance. If the borrower's coverage lapses, the lender is entitled to purchase coverage for the home, "force place" it, and be reimbursed by the borrower for the cost.
  
  
• Beginning in March 2003, GMAC entered into an agreement to buy force-placed insurance coverage with respect to its mortgage loan servicing portfolio from Balboa. Plaintiff alleges that GMAC, as a quid pro quo for awarding Balboa its force-placed insurance business, has required Balboa to pay GM kickbacks.
  
  
• These kickbacks have been in the form of bogus "commissions" paid to a GMAC affiliate, "GMAC Agency Marketing," an unincorporated division and/or fictitious "doing business as" name of defendant GMAC Insurance Marketing, Inc. Plaintiff alleges that Balboa agreed to label these payments as "commissions" -- and to funnel them through GMAC Agency Marketing -- to disguise their true nature as bribes or kickbacks.

For more, see Kirby McInerney LLP Files Class Action Lawsuit Against GMAC Mortgage Alleging an Illegal Kickback Scheme in Connection With Force-Placed Insurance on Borrowers' Homes.

For the lawsuit, see Rothstein v. GMAC Mortgage, LLC, et al.

NYS Regulator To Begin Formal Public Hearings Into Force-Placed Insurance Racket; 'Invites' Fifteen Banksters To 'Join Festivities' & Testify

In New York City, The Associated Press reports:

• New York’s Department of Financial Services has set public hearings [this] month to review whether rates for so-called “force-placed” insurance are excessive and to examine the relationships between insurers, banks, mortgage servicers, insurance agents and brokers. Banks and mortgage holders take out that insurance when a homeowner misses a mortgage payment or fails to maintain coverage required by the mortgage.
  
  
• Department Superintendent Benjamin Lawsky has said the high cost adds to struggling homeowners’ debt, making it harder to avoid foreclosure. The department plans to start hearings May 17 at its Manhattan offices. They’re expected to continue two more days and will be webcast.
  
  
• It has sent letters to 15 financial services companies directing them to provide testimony. That includes banks, mortgage servicers, insurance agents and brokers, insurers and reinsurers.

Source: New York Hearings on ‘Forced’ Insurance in Foreclosure.

Purported Clergyman Who Peddled Sale Leasebacks To Homeowners In F'closure Cops Plea To Felony Charges; Prosecutors: 3 Victims Scammed Out Of $650K

In Santa Clara County, California, the San Jose Mercury News reports:

• A San Juan Bautista man pleaded guilty to felony charges that he cheated Silicon Valley homeowners out of more than $650,000 and took title to their homes. Wesley Fort, 56, was a bishop of the Newlife Family Worship Center Church of God in Christ in Hollister when he scammed three families in San Jose and Milpitas, according to the Santa Clara County District Attorney's Office.
  
  
• He will be sentenced to no more than two years and eight months in jail, three years of supervision and may be required to make restitution to the victims.
  
  
• Fort, acting as a foreclosure consultant in 2005 and 2006, told the families he could save their homes from foreclosure. He convinced them to transfer title of their homes to him and also to make mortgage payments to him, in one case a victim paid him more than the regular mortgage payments. He told the owners he would eventually return title to them, according to prosecutors.
  
  
• But all three families lost their homes. Fort, meanwhile, made money through either refinancing the homes or by selling the properties to himself, according to prosecutors. It is a felony for a foreclosure consultant to acquire an interest in a foreclosed home from a client.

Source: DA: Man pleads guilty to cheating three South Bay families out of $650,000.

(1) For more on this type of foreclosure rescue ripoff, see:

• Criminal Prosecutions Of Sale Leaseback Peddlers In Equity Stripping Foreclosure Rescue Deals;
• Dreams Foreclosed: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (June 2005).

(2) State court prosecutors appear to be stepping up to the plate and bringing criminal charges against these scammers in these cases which, at one time, were generally thought of as being civil cases. See, for example:

• LA Sale Leaseback Peddler 'Strikes Out'; Gets 25 To Life For Equity Stripping Ripoffs That Targeted Poor, Elderly With Promises Of Foreclosure Rescue,
  
  
• Illinois AG Tags Two With Criminal Charges For Allegedly Promising To Save Homeowners From Foreclosure By Peddling Sale Leaseback Schemes (The Illinois Attorney General brought a criminal prosecution involving the following charges: organizing a continuing financial crimes enterprise, financial institution fraud and theft by deception, criminal mortgage rescue fraud, forgery by delivery, and false impersonation of an attorney),
  
  
• Sale Leaseback Equity Stripping Peddler 'Scores' Guilty Verdict In Equity Stripping Ripoff; Grand Larceny, Scheme To Defraud, Conspiracy, Says Jury (Prosecuted by the Westchester County, NY District Attorney, a scammer who swindled four local families out of their homes was convicted after a jury trial of four felony counts of second-degree grand larceny and one each of first-degree scheme to defraud and fourth-degree conspiracy),
  
  
• Convicted Foreclosure Rescue Scammer Could Face Life Sentence On New Charges In Alleged Sale Leaseback, Equity Stripping Ripoff That Fleeced 5 Victims (Los Angeles District Attorney charged alleged scammer with 23 felonies — including theft from the elderly, identity theft and real estate fraud — for allegedly tricking five people into unknowingly granting him title to their homes, and charged him under California's 'three-strikes' law),
  
  
• Foreclosure Rescue Scam Mastermind Found Guilty Of Dozens Of Felonies; Ran Upfront Fee Land Grant Scheme, Sale Leaseback Rent Skimming Racket (After an eight-week trial, and through the efforts of the San Diego District Attorney, a scammer was found guilty of 160 counts of conspiracy to commit grand theft, grand theft, rent skimming and deceitful practices by a foreclosure consultant),
  
  
• Delaware AG Levels 21-Count Indictment Against Alleged Foreclosure Rescue Racket Using "Divine" Cover In Sale Leaseback, Equity Stripping Ripoff (The Delaware Attorney General obtained an indictment alleging that the scammer ran a criminal enterprise involving theft, money laundering, and forgery in which he preyed on vulnerable homeowners who faced imminent foreclosure),
  
  
• Central Florida Sale Leaseback Peddler Linked To 50 Ripoff Deals Gets 10 Years On Racketeering Charge; Targeted Cash-Strapped, High-Equity Homeowners (A joint prosecution by the Orange County, Florida and the state attorney general (under former AG Bill McCollum) led to the scammer copping a plea to a single count of felony racketeering after initially being charged with 12 first-degree felony counts, including racketeering, conspiracy to commit racketeering and numerous counts of grand theft),
  
  
• NY AG Squeezes Guilty Pleas From 4 For Roles In Alleged Sale Leaseback, Equity Stripping Foreclosure Rescue Racket; 1 Awaits Trial On 23 Felony Counts (After a New York Attorney General prosecution, four employees of a sale leaseback racket pleaded guilty in Albany County to felony charges that included grand larceny, scheme to defraud and falsifying business records, after the Attorney General's Office filed criminal complaints),
  
  
• Queens DA Bags Seventeen Suspects In Alleged Sale Leaseback, Equity Stripping Foreclosure Rescue Racket (Queens County, NY DA (joined in the probe by the office of the New York State Banking Department and the New York State Police) variously charged the defendants with first- and second-degree grand larceny, first degree criminal possession of stolen property, first-degree money laundering, first-degree identity theft, second-degree forgery, second-degree criminal possession of a forged instrument, first-degree falsifying business records, first-degree offering a false instrument for filing, first-degree scheme to defraud and fourth-degree criminal facilitation).

Outfit Scoring Deeds In Exchange For Dubious Short Sale Promises Now Tagged By Stiffed HOAs For Assessment Non-Payment, Unit Rentals Without Approval

In West Palm Beach, Florida, The Palm Beach Post reports:

• A Palm Beach County foreclosure­-rescue company is acquiring distressed homes and renting them out, but some home­owners association leaders say it's not paying the dues vital for community upkeep.
  
  
• The for-profit Nationwide Investment Firm, which recently moved its Boca Raton headquarters to a Flagler Drive office in downtown West Palm Beach, has homeowners quit claim-deed their properties to the company with promises to broker a short sale, while also defending the case in court.
  
  
• Homeowners, who remain on the hook for the mortgage while no longer owning the home, have filed several lawsuits against Nationwide, complaining they unwittingly gave away their property without receiving the help they sought.
  
  
• And community associations say there's a deeper ripple effect in neighborhoods where Nationwide seeks to put tenants in homes without association approval or paying fees required for maintenance, security, landscaping and other services. Associations trying to recoup delinquent fees have filed tens of thousands of dollars in liens against Nationwide and properties deeded to the firm.
  
  
• Florida property appraiser records show Nationwide owns 73 homes in Palm Beach, Broward, Miami-Dade, Collier, Lee, St. Lucie and Highlands counties. Nationwide President Guilfort Dieuvil, a licensed Realtor, said his company is working with the associations to settle the bills.

***

• The Palm Beach Post first reported on Nationwide in November(1) when five lawsuits within a year's time accused the company of fraud. Two more homeowner lawsuits have been filed since then, and there have been several homeowner complaints sent to the Florida Attorney General's Office.
  
  
• The Florida Office of Financial Regulation said on Monday that it is investigating the company. The Palm Beach County State Attorney's Office had no comment when asked if it was looking into the company, said spokeswoman Christine Weiss.
  
  
• Kevin Fabrikant, a Hollywood­-based attorney who began representing Nationwide in the fall, has defended its quit claim practices, saying homeowners are explained the plan in both Creole and English. Because Nationwide advertises on Haitian television and radio stations, many of its clients speak Creole as their first language.
  
  
• Fabrikant has since withdrawn from Nationwide's cases, telling The Post he had "irreconcilable differences" with the company. Most of the lawsuits against Nationwide are from homeowners who describe questionable short-sale business models, but unsuspecting renters can also get caught up in the deals.

For more, see Short-sale firm Nationwide hit with HOA liens.

CFPB Works To Finalize Dodd-Frank Regs' Definition Of "Qualified Mortgage"; Bankster Violations To Lead To Harsh Liability

American Banker reports:

• The Consumer Financial Protection Bureau is working to finalize the definition of a Qualified Mortgage ["QM"] under the forthcoming ability-to-pay regulations. These regulations will have profound implications for the entire U.S. residential mortgage market.

***

• Under the Dodd Frank Act, the liability for violating the ability-to-repay standard is intended to be harsh. The law provides borrowers and their counsel a strong arsenal to stop foreclosure, obtain substantial compensation, and cover the attorney's fees. Adding such a significant element of legal risk to every underwriting decision a lender makes, and to every loan an investor buys, has the potential to drive capital away from the mortgage market.
  


• Recognizing this, Congress created the QM and granted legal protections to lenders making these loans in order to establish QMs as the "preferred" product in the market. Under this incentive structure, borrowers would seek out QMs, and lenders would make them widely available; conversely, lenders that originate non-QMs would be subject to significantly enhanced legal risks.

For more, see Final QM Rule Should Include Strong Protection from Lawsuits.