US Appeals Court: Not Necessary To File TILA Mortgage Rescission Suit w/in 3 Yrs Of Loan Closing, Provided Notice To Rescind Is Given Within That Time

An excerpt from a legal alert from the Consumer Financial Services Group of the law firm Ballard Spahr:

• In a decision that possibly opens the door for renewed foreclosure delays, the U.S. Court of Appeals for the Fourth Circuit has held that a lawsuit seeking rescission is timely where the consumer provided notice of rescission to the subservicer within three years of closing but did not file suit until after the three-year deadline had passed.
  
  
• The May 3, 2012, decision in Gilbert v. Residential Funding LLC is the first by a federal appellate court to hold that a borrower need only send notice of rescission within the three-year period to validly exercise a right to rescind.

***

• The Fourth Circuit’s decision represents a victory for the Consumer Financial Protection Bureau, which had filed an amicus brief in Wolf v. Federal National Mortgage Association, another Fourth Circuit appeal involving the same rescission issue. In its brief, the CFPB took the position that notice within the three-year period is all that is required to validly exercise a right to rescind. The CFPB has filed amicus briefs taking the same position in the Third, Eighth, and 10th Circuits. (To read our blog posts on the CFPB’s amicus briefs, click here and here.)

For more, see Borrower May Sue after Three Years To Rescind Mortgage Loan, 4th Circuit Rules.

For the ruling, see Gilbert v. Residential Funding LLC, No. 10-2295 (4th Cir. May 3, 2012).

BBB: Watch Out For 'Risk Free' Mortgage Audit Rackets Targeting Borrowers Implying They May Be Owed Refunds Due To Lender Overcharges

From a press release from the St. Louis, Missouri office of the Better Business Bureau:

• A Utah company charged homeowners hundreds of dollars each for “risk free” mortgage audits, then either delayed their promised refunds for months or never paid them at all, customers told the Better Business Bureau (BBB).
  
  
• Consumers from Missouri, Illinois and several other states also said AMT Auditing Services of American Fork, Utah, added unauthorized charges to their charge cards and/or forced them to deal with long, frustrating delays when the homeowners tried to contact customer service representatives to resolve their issues. “They did nothing at all, other than take my money,” said a woman from St. Charles, Mo., who said she lost $300 to the company.
  
  
• AMT Auditing Services has an “F” grade with the BBB, the lowest grade possible, with complaints and reports from 25 states. The BBB in Salt Lake City identifies Colton Moody as manager of the company. CRM Ventures LP, Enlightened, LLC and Mortgage Auditing Program are alternative business names.

***

• Several Missouri and Illinois homeowners said they received mailings from AMT similar to one sent to a Wisconsin consumer in March. That mailing said: “This notice is to inform you that you may be owed a refund of several thousand dollars from your mortgage lender. Your monthly mortgage payment may have been miscalculated and you may be due a refund from either your current or previous mortgage lender.”
  
  
• The letter says that the average refund is $1,497 and one-third of the refunds are $3,000 to $7,500.” In fine print at the bottom, the letter says it is not a mortgage modification offer, a forensic mortgage audit offer nor an offer to prevent foreclosure.

***

• On its website, www.amtdivision.org, AMT offers a mortgage audit at a sale price of $299. The site says AMT will determine whether a consumer has been overcharged and then notify the homeowner so he or she can obtain refunds from the lender.
  
  
• Some customers who filed complaints with the BBB said that AMT took months to complete audits that it promised to complete in a few weeks. They also said the company delayed or reneged on promises of full refunds if the audit uncovered no overcharges.

For more, see AMT Auditing Services Broke Agreements On Mortgage Audits, Customers Tell BBB.

Florida High Court Boots Three Attorneys, Disciplines Eight Others For Playing Fast & Loose With Clients' Cash

According to the latest issue of The Florida Bar's 'gossip sheet' which lists the names of twenty-one (21) attorneys who have been recently disciplined for a variety violations of ethical rules, the following eight (8) have been disciplined for playing fast and loose with their clients' money:

1. Andrea Ruth Bateman, P.O. Box 104, Winter Park, suspended for 30 days, effective 30 days from a March 19 court order. (Admitted to practice: 1974) Bateman was found in contempt for violating the terms of an October 2009 probation. She failed to submit quarterly trust account CPA reports and also failed to remit the quarterly monitoring fee on several occasions, accumulating arrearages of $700. (Case No. SC11-2323);
   
   
2. Jennifer Aycock Bonifield, 1025 Professional Park Drive, Brandon, suspended until further order, effective 30 days from an April 4 court order. (Admitted to practice: 2002) Bonifield was found in contempt for willfully failing to comply with a subpoena without good cause. The Bar was seeking copies of all Bonifield’s trust and operating account records. In July 2009, deposits to Bonifield’s escrow account totaled more than $856,000. Since that time, more than $575,000 has been electronically transferred from the account to Bonifield’s checking account. Bonifield failed to provide documentation for the transfers. She also failed to appear at the non-compliance hearing before the grievance committee in February. Stephan Tabano has been appointed as inventory attorney. (Case No. SC12-264);
   
   
3. Robert W. Frazier Jr., 507 S.E. 11th Court, Fort Lauderdale, publicly reprimanded following a March 8 court order. (Admitted to practice: 1977) Frazier failed to comply with a March 2, 2011, court order mandating that he immediately furnish a copy of his emergency suspension order, (which is currently in effect) to all of his clients and the bank. Frazier notified his clients 30 days later, and he failed to notify the bank of the suspension. Because of his failure to immediately inform his clients, one client wired more than $156,000 to Frazier’s law firm’s trust account while he was suspended. Multiple other deposits and withdrawals went in and out of the account during that time as well. The transactions were completed without Frazier seeking approval of the Florida Supreme Court or referee, as the court order mandates. (Case No. SC11-867);
   
   
4. Clifford Gorman, 3807 Ave. H, Unit B, Austin, Texas, disbarred, effective immediately, following a March 8 court order. (Admitted to practice: 1988) Gorman received an inquiry from The Florida Bar regarding trust account funds that were requested by a client, but not disbursed. Gorman responded to the Bar by invoking the Fifth Amendment to the U.S. Constitution. Subsequently, a trust account subpoena was served upon Gorman, with which he has failed to comply. (Case No. SC12-324);
   
   
5. Patricia A. Johnston, Calle Cesar Chavez 84, Arrecife de Lanzarote, Canary, Spain, disbarred for 10 years, following a March 8 court order. (Admitted to practice: 2001) Johnston was the subject of several Bar complaints. She misappropriated client funds and engaged in other unethical conduct. In one instance, Johnston was removed as personal representative after she failed to provide information upon request about a $3 million estate, from which she took funds without authorization. In another matter, Johnston provided false misleading testimony in a civil collection matter in an attempt to hide the true nature of her spouse’s assets. Johnston abandoned her Orlando law practice, changed her bar status to retired and moved to Spain. (Case No. SC11-1767);
   
   
6. Bruce Allan Lamchick, 9200 S. Dadeland Blvd., Suite 518, Miami, suspended for 90 days following an April 9 court order. (Admitted to practice: 1974) After being served a subpoena, Lamchick failed to provide complete bank and trust account records to the Bar. He also engaged in misconduct while serving as the closing agent for numerous real estate transactions. In another matter, while serving as a settlement agent, Lamchick notarized two signatures on a mortgage deed that were not signed in his presence. (Case No. SC11-1781);
   
   
7. Doris Wellman Sanders, 2181 Crawfordville Highway, Crawfordville, disbarred, effective immediately, following a March 27 court order. (Admitted to practice: 1997) A Bar investigation indicated theft of funds by Sanders from a client’s revocable trust. The Bar's complaint contained the following allegations: While serving as the sole trustee of the trust, Sanders gave gifts to her boyfriend and relatives totaling more than $41,000. She also paid off two personal mortgages worth $95,000 and paid herself nearly $25,000 in attorney’s fees, but failed to provide a sufficient explanation as to what she did to earn the fees. Sanders agreed to disbarment. (Case No. SC11-1990);
   
   
8. David M. Sostchin, 797 W. 18th St., Hialeah, publicly reprimanded following a March 8 court order. (Admitted to practice: 1978) Sostchin was retained to represent a client in a foreclosure proceeding in which a final order of foreclosure had already been issued and a sale date had been set. Although there were no defects in the underlying proceeding, Sostchin failed to ensure that the client was adequately informed of the status of the representation, and notwithstanding the eventual sale of the property, continued to accept monthly payments until the client ceased making payment. Upon learning of the sale of the property, the client went to the office and demanded an explanation. The firm issued a refund check in the amount of $2,295. (Case No. SC11-1471).

For the gossip sheet, see Supreme Court Disciplines 21 Attorneys.

Purchaser Buys Foreclosed Home, Sinks Thousand$ Into Fix-Up, Then Finds Out She Bought The Wrong House

In Senatobia, Mississippi, WREG-TV Channel 3 reports:

• Terry Jordan, of Tate County Mississippi, quickly fell in love with a home in Senatobia. It was a foreclosure and needed a lot of work. Her husband had just lost his job. He was going to fix it up and sell it for a profit to help them while they got through a tough time.
  
  
• Jordan says she visited the home three times, her realtor taking the keys out of the lockbox on the door, and she went through an act of sale. She says she immediately got to work, spending thousands of dollars. “I have had a new roof put on, new electrical in it, I have had plumbing done to it,” said Jordan.
  
  
• She had the property surveyed, after seeing records at City Hall that didn’t look quite right. After the survey she learned the bad news from her realtor. “She’s like I don’t know how to tell you this but we might have sold you the wrong house,” said Jordan.
  
  
• Just to the right of the home she thought she bought was another one, it’s seems that’s the one that was supposed to be sold, the one she legally bought. The home was listed by Bob Leigh Realtors. A representative told us the mortgage company gave them misinformation. We contacted the company’s namesake with no luck.
  
  
• Ms. Jordan says she’s been waiting for a solution for months, and she’s spent money fixing a house she doesn’t even own.

Source: Mississippi Woman Says She Was Sold Wrong House.

More BofA Controversies? Dubious Practices Now Include Possibly Illegal Homebuyer Steering In Connection w/ Sale, Financing Of F'closed Home Inventory

In Portland, Oregon, The Portland Tribune reports:

• [M]any Portland-area real estate agents and mortgage brokers say it's increasingly common -- and harmful to their clients -- for B of A and other large banks selling foreclosed properties to insist that buyers first get prequalified with their own lending departments. Then, critics say, the banks try to coax bidders into taking out home loans with them.
  
  
• Bank of America does require all bidders on its foreclosed properties to first be prequalified for loans with the bank's lending department, says bank spokeswoman Kris Yamamoto. It's not an uncommon practice in the industry these days, she says.
  
  
• "It's just to determine if someone is eligible to finance the property," says Yamamoto, a senior vice president for corporate communications. If a buyer comes in with a loan prequalification from another lender, she says, "We don't always understand the underwriting guidelines of the other lender."
  
  
• But critics say the big banks' practices can be costly to homebuyers who forego shopping around for the best loan terms. They also could hurt buyers' negotiating positions and delay sales of foreclosed homes at a time when the Portland real estate market is hampered by a glut of distressed properties. And, it's another potential black eye for mega banks, which helped spark the Great Recession and housing slump.

***

• David Feathers, president of Avelloe Mortgage in Lake Oswego, says he recently obtained an email that appears to document illegal steering by B of A, from David Churchill, retail sales manager at the bank's Pearl District office.
  
  
• In the email, Churchill notes that B of A's listing agent for a foreclosed property is supposed to include the "assigned loan officer contact info" for the bank with the Regional Multiple Listing Service, where most Portland-area homes are listed for sale. "Then we pick and choose the loans we want to take on," Churchill states. "If the agents don't have a good conversion rate we replace them."
  
  
• That conversion rate presumably measures the proportion of bidders who wind up taking out B of A loans. "That's blatantly illegal," Feathers says. It's saying "if we don't have enough people steering to us, we will fire them."
  

***

• Bof A spokeswoman Yamamoto denies there have been any RESPA violations and says the email is "misleading" and taken out of context from a larger string of emails. However, she declined to provide those other emails or permit the Tribune to interview Churchill. Feathers forwarded the email to the Oregon Department of Justice and to state banking regulators.
  

***

• Bank of America isn't the only Portland-area lender requiring bidders on foreclosed properties to get prequalified through its own lending arm. "Chase does it, as well," Feathers says, but in his experience B of A is being the most aggressive.

For more, see Banks’ ‘steering’ irks some buyers.

Duo Get 3 Yrs In Scam That Left Home Buyers w/ Loans On Homes That Didn't Exist; One Victim Gets 'Debt Forgiveness' 1099 For Money She Never Borrowed

In Myrtle Beach, South Carolina, The Sun News reports:

• Former Conway manufactured home dealer Glenn Vaught and his mortgage broker accomplice, Michael Fortenberry, will spend the next three years in federal prison for their roles in a fraud scheme that cost two banks more than $1.5 million and left prospective buyers with six-figure loans on homes that didn’t exist.
  
  
• Vaught and Fortenberry were sentenced last week after pleading guilty to one felony charge each of conspiracy to commit loan application fraud in a case that was first brought to light after an investigation by The Sun News in 2006.

***

• “That’s good news, but it’s not enough,” said Brenda Myers, one of the victims of the fraud. Myers thought she was buying a home from Vaught’s G&E Home Center in 2006. She learned a few months later that Vaught had taken proceeds from the $129,000 mortgage he helped to arrange but never ordered her home. By early 2007, Myers was getting past-due notices from the mortgage company for a home that did not exist.

***

• Vaught was supposed to order manufactured homes for his buyers and then close on the loans after the homes were set up on land and ready to occupy. Instead, Vaught told banks the homes were ready even though they had not yet been ordered.

***

• Vaught and Fortenberry split the money they got from banks and never ordered homes for their customers. That left buyers with 30-year mortgages for homes that did not exist, creating a credit nightmare for some customers that continue to this day.
  
  
• Myers, for example, moved out of her apartment in 2006 because Vaught kept telling her a home would be ready any day. She wound up living in a hotel room for months, with her furniture and belongings in a storage building. Myers said she has been hounded by debt collectors ever since, including one that filed a foreclosure lawsuit trying to take back a non-existent home.
  
  
• The process has been repeated each time a new collection agency purchases the debt. When Myers convinced the most recent creditor that she was not liable for the loan, the collection efforts were dropped. She then received a Form-1099 from that creditor stating that she owes federal and state taxes on the “forgiven” loan. “It’s been a nightmare,” Myers said. “You think it’ll never end.”

For the story, see Former Conway home seller, mortgage broker sentenced in real estate fraud case.

Central Florida HOA Uses Court Process To Hijack Another Homeowner's Unit, Evicts Existing Tenant, Finds New Renter

In Wesley Chapel, Florida, The Tampa Tribune reports:

• The Bridgewater homeowner's association doesn't own the house Connie Hicks rented. But that didn't stop the association from evicting Hicks, giving her 24 hours to pack up and leave. Now, a new family lives there and they're paying $250 more a month more in rent. What's more, the money is going to help pay off a lien the association filed against the homeowner.
  
  
• "It created a big mess for me," said Hicks, who lived there for seven months. "I wouldn't want any other renter to go through this." Hicks was shocked because she thought she did everything she was asked to by the association and by the courts.
  
  
• Still, she was booted from the house as part of Bridgewater's controversial legal strategy, first reported by The Tampa Tribune earlier this month and now the subject of news coverage nationwide.
  
  
• The association's aggressive interpretation of Florida law has legal experts debating how much power a homeowner's association has. [...] Court records show that so far this year, the association tried to evict tenants in six houses. The association is using a Florida law that says an association can evict a tenant if the homeowner fails to pay association fees.
  
  
• Bridgewater goes through the legal process of evicting, but what happens next has some real estate attorneys and homeowners crying foul.

For more, see Another renter evicted by homeowners' association.

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.