Undeterred By State Bar Suspension, California Attorney Continues Peddling Foreclosure Relief Services

In Modesto, California, The Modesto Bee reports:

• A Modesto attorney suspended for botching real estate cases continues offering services similar to those that got him in trouble.
  
  John Villines acknowledged Monday that his advertisements might mislead potential clients into thinking he's still practicing law. He will change wording and ask again that his landlord remove building signs indicating his office is a law firm, he said.
  
  Without running afoul of discipline imposed by the California Supreme Court, Villines intends to offer help to thousands of property owners in danger of losing their homes, he said.
  
  "I'm no longer representing anyone in court," said Villines, whose nine-month suspension began June 20 and could end in March if he passes an ethics exam and repays five former clients $46,205.
  
  Villines believes the suspension does not prevent him from negotiating to halt foreclosures or arranging loan modifications, services that landed him in hot water with prosecutors with the State Bar of California.
  
  According to court papers, four of five complaining clients lost their homes after Villines made legal blunders. The other obtained a loan modification without his help.
  
  Twice, Villines waited longer than the law allows to file lawsuits against lenders — in one case, more than a year after he was hired and three months after the property had been sold in foreclosure. In two other cases, he failed to file lawsuits for his clients but kept their money.
  
  One lawsuit was worthless because Villines "discovered that he had not named the proper defendants," a document says, and he dropped two other lawsuits without telling clients.
  
  "The suits had very little value, if any, for the clients," reads a stipulation that Villines signed in November, admitting wrongdoing as alleged. He kept fees and gave no accounting as required by California attorney Rules of Professional Conduct, the document says.
  
  Four years' probation
  
  In what amounts to a plea bargain, Villines agreed to two years' suspension with all but nine months stayed, or forgiven, if he repays the money and complies with other requirements. He will be on probation for four years, the court order says.

For more, see Suspended Modesto lawyer still offering real estate services.

Recent Court Ruling Favors TX Land Owners In Effort To Stop Pipeline Firms' Forced Easements By Invoking Purported Condemnation/Eminent Domain Rights

In Austin, Texas, The Associated Press reports:

• Pipeline operators and landowners called on Texas lawmakers [] to clarify eminent domain laws following a recent court decision that has thrown that authority into question.
  
  Representatives for pipeline companies complained that the Texas Supreme Court decision to give landowners the power to challenge a company's right to condemn property to make way for a pipeline has injected uncertainty into the industry. Before the court ruling, the company only had to check a box on a permit application to the Texas Railroad Commission to prove it should have the authority to force people to sell their land.
  
  "To go to a policy change that would make this a judicial review (instead of an administrative one) ... could severely impede the development of pipelines in this state," said Greg Schnacke, a representative for Plano-based Denbury Associates, which lost the Supreme Court case.
  
  Julia Trigg Crawford, a landowner and farmer in Lamar County, said she was sued by TransCanada Corp. when she refused to turn over part of her land for a pipeline. She complained that no state agency is thoroughly vetting whether pipelines actually qualify under Texas law for eminent domain authority as a common carrier.
  
  A common carrier is a pipeline that transports substances to or for the public and are for hire by the public. The pipeline must not operate solely for the company that owns it to have eminent domain powers.
  
  "The process lacks real oversight by any empowered and engaged state agency," Crawford said. "Why is it my responsibility as a Texas landowner to make a foreign corporation prove critical elements that should be step one in the state permitting process?"
  
  Lindale Fowler, general counsel of the Texas Railroad Commission, said the agency processes 4,400 pipeline permits a year and a little more than 200 are for new pipelines. Applicants check a box on the application form promising to be a common carrier, but the commission does not attempt to verify the claim, he said.

***

• Clayton Henry, representing the Texas and Southwestern Cattle Raisers Association, told lawmakers his members want a process where they can argue against a pipeline company using eminent domain authority.
  
  "To simply check a box on a one page form, submit a pipeline route, and post a $25,000 bond to receive condemnation authority appears to be a very low bar," he said.
  
  Pipeline operators said they would like the Legislature to give the Railroad Commission control of certifying a pipeline is in the public interest and for public use, rather than force companies to fight legal challenges in perhaps dozens of local courts if the pipeline crosses multiple counties. "The issue is whether we do it once, or will we do it 100 times," said James Mann of the Texas Pipeline Association.

For more, see Pipelines unhappy with Texas eminent domain ruling.

In a related story, see Texas Farmer Takes On TransCanada.

Go here for the State of Texas Landowner’s Bill of Rights, which applies to any attempt by the government or a private entity to take your Texas property through eminent domain (go here for Spanish version).

Go here for Pipeline Eminent Domain and Condemnation Frequently Asked Questions.

Texas Land Owner Challenges Energy Firm's Purported Common Carrier Status With Right Of Eminent Domain, Condemnation In Effort To Prevent Forced Sale

In Jefferson County, Texas, The Southeast Texas Record reports:

• Golden Triangle Properties is asking the courts to declare that Williams Field Services-Gulf Coast Co. does not have eminent domain powers in a proposed pipeline extension.
  
  According to the lawsuit filed July 23 in Jefferson County District Court, GTP is the owner of 1,116.39 acres of land in Jefferson County.
  
  WFS contends it is a common carrier with the right of eminent domain and condemnation with respect to the proposed extension of the BASF 840 pipeline.
  
  Williams Field Services-Gulf Coast Company LP is a natural gas distribution company located in Tulsa, Okla., and operates as a subsidiary of Williams Partners L.P.
  
  According to the company website, Williams is an energy infrastructure company focused on connecting North America's hydrocarbon resource plays to markets for natural gas, natural gas liquids and olefins. Williams' operations span from the deepwater Gulf of Mexico to the Canadian oil sands.
  
  "Plaintiff contends defendant does not have these rights and would show that defendant has produced no evidence establishing even a colorable claim to these rights," the suit states. "In fact, public records show that defendant is not a common carrier with respect to the proposed extension."
  
  GTP is seeking a declaratory judgment from the court that WFS has not established its status as a common carrier and thus does not have the power of eminent domain. The company is also seeking to recover court costs and attorney's fees.
  

Source: Golden Triangle Properties questions company's eminent domain powers.

In a related story, see The Associated Press: Pipelines unhappy with Texas eminent domain ruling.

Go here for the State of Texas Landowner’s Bill of Rights, which applies to any attempt by the government or a private entity to take your Texas property through eminent domain (go here for Spanish version).

Go here for Pipeline Eminent Domain and Condemnation Frequently Asked Questions.

Co-Owners' Inability To Reach Mutually Acceptable Purchase/Buyout Agreement Leads To Partition Suit

In Jefferson County, Texas, The Southeast Texas Record reports:

• Seeking to properly divide up a tract of land worth around $4 million, Susan McCurry has filed a petition for partition against Texas Mountain Ranch and Mark and Carolyn Fertitta. The petition was filed July 23 in Jefferson County District Court.
  
  According to the petition, McCurry and the Fertittas are one-third, co-owners of undivided interest in certain real estate in Bandera and Medina Counties. The other third interest belongs to Elizabeth Wadill. The land is estimated to be worth more than $4 million.
  
  "Defendants ... have expressed an interest in obtaining a one-half divided possessory interest in the tract," the suit states. "Plaintiff has attempted to negotiate an equitable division of the property. However, defendants ... have been unreasonable in proposing a division of the property, thus, necessitating this lawsuit."
  
  The plaintiff seeks the court to enter a decree as follows:
  
  Determining the share of each of the joint owners of the property; Determining that the property is susceptible to partition and directing partition; Appoint commissioners to make such partition; and Awarding of court costs and attorney's fees.

Source: Landowners in litigation over $4M tract.

Series Of Emails Between Buyer's, Seller's Attorneys Creates Binding Real Estate Contract?

In Boston, Massachusetts, the Boston Business Journal reports:

• In a case that could chill electronic correspondence among parties of a real estate transaction, the Massachusetts Superior Court ruled that a series of emails between the buyer’s and seller’s attorneys created a binding agreement.
  
  Plaintiffs Ian Feldberg and Michael Rodgers alleged that, through emails, they entered into a binding agreement to purchase two lots in Sudbury for $475,000 from Harold Coxall. In court documents, Coxall said the emails did not satisfy the state’s fraud statute, which requires contracts for the sale of real estate be, “in writing and signed by the party to be charged.”
  
  Coxall, therefore, moved to dismiss the plaintiff’s complaint as frivolous. But Judge Douglas Wilkins ruled that electronic mail may satisfy the statute of frauds and in favor of the plaintiffs.
  
  Still, whether the parties’ email exchange satisfied the statute of frauds in this case is not know in this case since the parties have settled their dispute and dismissed the case.

Source: Bay State judge rules emails are binding in real estate transactions.

Title Insurer's Duty To Indemnify Foreclosing Bank's Loss Claim, Duty To Defend Against Borrower's Affirmative Defense Addressed In Minnesota Ruling

From a newsletter from the law firm Traub Lieberman Straus & Shrewsberry LLP:

• In its recent decision in Associated Bank, N.A. v. Stewart Title Guaranty Co., 2012 U.S. Dist. LEXIS 104528 (D. Minn. July 27, 2012), the United States District Court for the District of Minnesota had occasion to consider when a loss is valued for the purpose of coverage under a title insurance policy.

***

• With respect to the indemnity portion [of the litigation], Associated Bank argued that its loss should be measured at the time the loan was initiated, not at the time the foreclosure action concluded.
  
  Stewart Title, on the other hand, contended that Associated Bank did not recognize a loss until the foreclosure action resolved, at which time it was determined with finality that the mortgage would not be repaid. By then, the property had declined in value from $450,000 to $126,000. Stewart Title argued, therefore, that “the loss sustained by Associated Bank on its loan was not due to the invalidity of the Mortgage, but rather due to a decline in the value of the Property securing the loan,” and as such, was uninsurable.
  
  While the court could find no Minnesota case law directly on point, it noted the majority view in other jurisdictions that a mortgagee’s loss cannot be measured until the note has not been repaid and the security for the mortgage is shown to be inadequate. The court found this rule to be consistent with the purpose of title insurance, explaining:
  
  A title insurance policy "does not guarantee either that the mortgaged premises are worth the amount of the mortgage, or that the mortgage debt will be repaid." … Rather, the "insurable value of a mortgage on real estate is the fair market value of the realty which secures the mortgage, and is not controlled by the original purchase-price of the mortgage."
  
  The court observed that had the borrower not challenged the validity of the mortgage, and Associated Bank simply allowed to proceed with the foreclosure, it likely only would have been able to sell the property for $126,000, which was the market value of the property at the time.
  
  Having recovered $175,000 as a result of the settlement, the court agreed that Associated Bank did not sustain a loss for which Stewart Title was obligated to indemnify.
  
  The court nevertheless concluded that Associated Bank was entitled to a defense from Stewart Title [Stewart Title stiffed its insured by never responding to Associated Bank's tender of this matter for a title defense].
  
  Notwithstanding the fact that the borrower questioned the validity of the title in an affirmative defense, rather than a counterclaim or other form of direct claim, the affirmative defense asserted a claim adverse to Associated Bank’s title, thus triggering Stewart Title’s defense obligations under the policy.(1)

Source: Minnesota Court Addresses Coverage Under Title Insurance Policy.

(1) In connection with Stewart Title's stiffing of its insured by failing to step up when Associated Bank tendered the matter to it for a defense, the court made these comments in concluding that Stewart had a duty to defend:

• The parties also dispute whether Stewart Title had a duty to defend against the Arnesons' claim in the Foreclosure Action that the Mortgage was invalid and unenforceable.
  
  Associated Bank contends the Arnesons' Answer raised a claim that was adverse to the Mortgage, and therefore Stewart Title was obligated to defend against the claim. Stewart Title argues the duty to defend was not triggered because the Policy does not require Stewart Title to litigate a foreclosure action voluntarily initiated by an insured, and because the Arnesons' claim was excluded from coverage as a defect created by Associated Bank.
  
  The duty to defend is broader than the duty to indemnify. Enron Corp. v. Lawyers Title Ins. Co., 940 F.2d 307, 310 (8th Cir. 1991); Wooddale Builders, Inc. v. Maryland Cas. Co., 722 N.W.2d 283, 302 (Minn. 2006); Rechtzigel Trust v. Fidelity Nat'l Ins. Co. of N.Y., 748 N.W.2d 312, 320 (Minn. Ct. App. 2008) (citing Franklin, 574 N.W.2d at 406).
  
  Whether a duty to defend exists is determined by comparing the allegations in the underlying claim to the relevant policy language. Garvis v. Employers Mut. Cas. Co., 497 N.W.2d 254, 258 (Minn. 1993). If the pleadings in the underlying action raise a claim arguably within the scope of coverage, the duty to defend applies. Rechtzigel, 748 N.W.2d at 320 (citing Ross v. Briggs & Morgan, 540 N.W.2d 843, 847 (Minn. 1995)). See also Enron, 940 F.2d at 310 (stating an insured "must defend a claim the policy does not cover if the allegations of the complaint state on their face a claim against the insured to which the policy potentially applies") (emphasis in original) (internal quotation marks omitted).
  
  The duty to defend is determined at the time the insured tenders defense of the claim to the insurer. Jostens, Inc. v. Mission Ins. Co., 387 N.W.2d 161, 166 (Minn. 1986). At that time, if the insurer knows of facts indicating there may be a claim, either from what is directly stated or inferred in the underlying complaint, or if the insured tells the insurer of such facts, "the insurer must either accept tender of the defense or further investigate the potential claim." Garvis, 497 N.W.2d at 258.
  
  The insurer bears the burden of proving that the claim clearly falls outside the coverage afforded by the policy. Prahm v. Rupp Constr. Co., 277 N.W.2d 389, 390 (Minn. 1979). "Any ambiguity is resolved in favor of the insured. . . . If the claim is not clearly outside coverage, the insurer has a duty to defend" Id.
  
  Stewart Title first argues the Policy does not obligate it to prosecute a foreclosure action that is voluntarily initiated by an insured, and thus the duty to defend was not triggered here. The Policy's duty-to-defend provision states that Stewart Title "shall provide for the defense of an insured in litigation in which any third party asserts a claim adverse to the title or interest as insured. . . ." Policy at AB002701 ¶ 4(a). The Arnesons' Answer challenged the validity of the Mortgage by alleging it was obtained by fraud and misrepresentation. Answer ¶ 8.
  
  Therefore, the Answer raised a claim adverse to Associated Bank's insured interest. The duty-to-defend provision does not contain an exception for adverse claims raised in proceedings initiated by insureds. Thus, the fact that Associated Bank voluntarily commenced the Foreclosure Action does not excuse Stewart Title from the obligation to defend against the adverse claim raised by the Arnesons' Answer. Cf. Enron, 940 F.2d at 309-11 (finding an insurer's duty to defend triggered by a claim raised in an answer to the insured's affirmatively filed action).
  
  Stewart Title also contends an affirmative defense does not give rise to a duty to defend. However, the Policy's duty-to-defend provision does not limit the types of pleadings that will trigger the duty; instead, the provision states generally that Stewart Title shall "provide for the defense of an insured in litigation in which any third party asserts a claim adverse to the title or interest as insured." Policy at AB002701 ¶ 4(a) (emphasis added); see also Joyce D. Palomar, 1 Title Insurance Law § 11:2 at 896-97 (2011-2012 ed.) ("Subsequent amendments to a complaint, answers, counterclaims or cross-claims all are included among the pleadings that invoke the insurer's duty to defend.").

On Verge Of Foreclosure, Arizona Man Coughs Up $21K+ To Reinstate Loan & Halt Sale; Bank Pockets Cash, Auctions Off Home Anyway

In Maricopa, Arizona, KPHO-TV Channel 5 reports:

• An Arizona man is accusing his bank of stealing his house and he wants it back. The homeowner was on the verge of foreclosure when he paid off all the money he owed, but the bank sold the house anyway.
  
  David Reed told CBS5 that he thought he had nothing to worry about when his home and 5-acre property in Maricopa was scheduled to be sold at auction, because he fell behind on his mortgage payments. "I called their payment line and asked them what is the total amount I owed to stop my house from going into foreclosure," said Reed. "They told me $21,573."
  
  The 52-year old, who's spent the past year battling health problems, sent the full amount straight to Cenlar Bank, which acknowledged receiving the money March 5. Reed was convinced his home was safe, but it wasn't.
  
  "I came home one day and had a notice on my door that somebody else owned my property and I either had to get out immediately or rent it back from them."
  
  Cenlar Bank had gone ahead with the trustee sale, March 23, even though Reed was now up to date on his mortgage and had paid all his interest and late fees. "I believe they just figured it was an easy way to make another $20,000," said Reed. "Let me make my payment, then turn around and auction it off and make more money."
  
  Reed hired a lawyer and filed a lawsuit after Cenlar failed to reverse the trustee sale. [...] Reed said that he was only able to pay off what he owed because of money he inherited recently following a death in the family.
  
  CBS5 made several calls and sent a number of emails to the attorney for Cenlar Bank to get their side of the story, but have not heard back.

For the story, see Arizona homeowner: 'Bank stole my house.'

Bankster Handiwork Underlying Foreclosure Fraud Disaster Emerges Again In Connection With Consumer Debt Collection Practices

The New York Times reports:

• The same problems that plagued the mortgage-foreclosure process -- and prompted a multibillion-dollar settlement with big banks -- are emerging in the debt-collection practices of credit card companies.
  
  As they work through a glut of bad loans, companies such as American Express, Citigroup and Discover Financial are going to court to recoup their money. But many of the lawsuits rely on erroneous documents, incomplete records and generic testimony from witnesses, according to judges who oversee the cases.
  
  Lenders, the judges said, are churning out lawsuits without regard for accuracy and improperly collecting debts from consumers. The concerns echo a recent abuse in the foreclosure system, a practice known as robo-signing in which banks produced similar documents for different homeowners and did not review them.

For more, see Problems Riddle Moves to Collect Credit Card Debt.

Fraudulent Real Estate Tax Exemption Claims For Homesteaded Property Costs One North Florida County Of Up To $1M Per Year

In Escambia County, Florida, NorthEscambia.com reports:

• Escambia County is being robbed of up to $1 million annually by property owners committing homestead exemption fraud, Property Appraiser Chris Jones said [].
  
  “Unfortunately some property owners claim exemptions to which they are not entitled,” Jones said. “These may include rental or vacation properties, second homes or other properties in which the owner does not reside.”
  
  There are currently about 650 cases of homestead fraud per year in Escambia County, Jones said. Homestead fraud occurs when a person who is not a resident of Escambia County files for and is granted a homestead exemption; when that person is not in good faith residing on the property which has been granted the exemption; or is claiming a resident benefit in some other location while at the same time claiming an exemption on the property on which they filed. Homestead fraud is punishable by up to a year in jail, a fine of $5,000, or both.

For the story, see Homestead Exemption Fraud Costing Escambia $1 Million A Year.

C. Florida Woman Named In F'closure Of Home She Sold 15+ Years Ago; Blames Problem On Title Company Screw-Up, Bank Attorney's Failure To Amend Filing

In Clearwater, Florida, The Tampa Tribune reports:

• Deloris Bell sold her house in 1995, so she was shocked when in March a bank filed for foreclosure on the house and named her in the lawsuit.
  
  She said she called the attorney's office handing the foreclosure and was told not to worry. "I called and the guy said, 'It's just an error, just file for a new deed, and we'll correct it and take your name out of the paperwork,'" Bell said.
  
  Bell called her title company and filed for the new deed right away. But two months later, more court filings showed up, and her name was still listed as a defendant. The attorney's office again said it was an oversight.
  
  "He said, 'Oh, not a problem, I see it right here, it's on the computer, it's been corrected. We'll take your name off,'" Bell said. That was in June, but her name was still on the lawsuit.
  
  Lawsuits like Bell's, real estate experts say, illustrate the complexity of foreclosure and how innocent people can get pulled into someone else's financial trouble. When Bell sold her home, the title company made an error on the deed. She should have been dropped from the suit as soon as the deed was filed.

***

• [A]fter inquires from The Tampa Tribune and News Channel 8, Bell said she got good news. "The attorney called and said they're dropping me from the suit," she said. "I'm so relieved."

For more, see Error ensnares woman in foreclosure lawsuit.

HOA Fight Against Dues-Stiffing, Deadbeat Banksters Continues As Lenders Increasingly Find Themselves On Defensive In Foreclosure Actions

In Broward County, Florida, the South Florida Sun Sentinel reports:

• South Florida homeowner associations are foreclosing on some of the nation's largest banks, accusing the lenders of failing to pay thousands of dollars in maintenance fees on repossessed properties.
  
  The foreclosure filings are a growing trend as associations become more aggressive in going after delinquent fees that have crippled HOA budgets during the housing bust.
  
  Banks owe a portion of the past-due maintenance fees and the full amount from the date they take title to the property, attorneys said. If the lenders fall behind, they're subject to foreclosure just as an individual owner would be.
  
  In one Broward County case, Deutsche Bank didn't pay maintenance fees for nearly three years on a townhome it repossessed in September 2009 at the Southbridge development in Pembroke Pines, said Ben Solomon, a lawyer for the association.
  
  The Southbridge HOA filed for foreclosure against Deutsche Bank last year. The bank finally paid $25,553 in June — and only then because it had to convey clear title to another buyer, Solomon said.
  
  "They expect payment from their customers, but once they become our customers, they don't want to pay us," said Marc Lebron, treasurer of the Southbridge HOA. "It's ironic, isn't it?"
  
  Solomon is representing dozens of other South Florida homeowner associations that have filed foreclosures against Deutsche Bank, JPMorgan Chase, Citibank and others. He expects more than 100 similar cases to be filed by the end of the year.

***

• Solomon said lenders often remain delinquent while they market the home for sale to a third party. Once those deals are completed, the banks pay what's owed out of the proceeds of the sale rather than fulfill the legal requirement of paying each month. "Every association needs to pursue delinquent owners, banks or otherwise," he said.
  
  In another case, he said, JPMorgan Chase hasn't paid the Keys Gate Condominium Association in Miami-Dade County for more than two years after it foreclosed on a condominium there.
  
  Keys Gate filed for foreclosure against the bank, saying it owes nearly $20,000 in fees. JPMorgan failed to respond, and the association entered a default against the bank and is awaiting a judge's ruling, Solomon said.

For more, see HOAs foreclose on big banks.

Woman's Effort To Stymie Foreclosure On Parents' Home By Filing Phony Documents Gets Her A Year In Jail, 3 Years Probation

In Stanislaus County, California, The Modesto Bee reports:

• A judge has sentenced a woman to a year in Stanislaus County Jail for filing false documents in an attempt to delay foreclosure on her parents' home. On June 5, Monica Whitten was convicted of two felony counts of offering to record or recording false documents, the district attorney's office reported [].

***

• Prosecutors said Whitten's case is an example of a common real estate fraud scheme in which defendants pay money for forms they believe will slow down or stop a foreclosure sale and file them at the county clerk-recorder's office. [...] Along with the jail sentence, Stanislaus County Superior Court Judge Nancy Ashley sentenced Whitten to three years of probation and ordered her to pay restitution.

For the story, see Jail time in Stanislaus real estate fraud.

Buffalo Bankruptcy Attorney Raises Questions About L.I. Foreclosure Mill's Billing Practices; Suspects Systematic Squeezing Of Homeowners Across NYS

In Buffalo, New York, The Buffalo News reports:

• A Buffalo bankruptcy attorney's attempt to investigate and call into question the fees charged to debtors by a prominent downstate foreclosure law firm has triggered a bitter defamation lawsuit.
  
  Attorney Peter Grubea, who runs the largest bankruptcy practice in Western New York by volume of cases, has raised questions about what he calls high and unnecessary fees charged by Rosicki, Rosicki & Associates P.C., of Long Island, one of the biggest foreclosure firms in the state.
  
  He accuses them of racketeering, a charge often used for organized crime and corruption. In a blog posting on his website in late March, Grubea wrote that he is "currently investigating the billing practices" of Rosicki, saying that "we believe that the charges imposed ... are unfairly high."
  
  He also wrote that he is already litigating the issue in a bankruptcy proceeding and expects additional litigation in state court, and asks for people to contact him if they've dealt with Rosicki in a foreclosure case. "You may have a claim for monetary damages," he wrote.
  
  In response, Rosicki sued Grubea for defamation and libel, accusing him of "publicly and falsely defaming plaintiffs to the whole world" by making "defamatory statements that are directed squarely at destroying both the business and reputation of plaintiffs."
  
  The battle between Grubea and the downstate firm illustrates what is already happening in the wake of the dissolution earlier this year of Steven J. Baum's firm, which had been the dominant foreclosure law firm in the state for years.

***

• In a legal memorandum, filed as part of the bankruptcy petition for a Lancaster woman to justify reducing her mortgage debt, Grubea accused the Rosicki firm and its affiliated title and legal service firms of being "engaged in the systematic overbilling of New York homeowners for all of the foreclosure-related services they provide."

***

• As a result, Grubea alleged, Rosicki actually earns more money on a case through non-lawyer paperwork - handled by the affiliated companies that are owned and run by the law firm's husband-and-wife partners - than it does from the work performed by its lawyers.

For more, see Foreclosure accusations prompt suit (Local attorney questions downstate firm's fees).

Scammer Cut Loose After 3+ Yrs Time Served For Running Rent To Own, Straw Buyer Ripoff That Left Wanna-Be Homeowners Booted, Investors Holding The Bag

In Lee County, Florida, The News Press reports:

• A man accused of being a major part of an alleged $3 million mortgage fraud scheme pleaded no contest [] in a Lee County court to five counts of obtaining mortgages by fraud, said a state attorney’s office spokeswoman. A judge adjudicated him guilty.
  
  After his 2007 arrest, Erich Heckler, now 41, faced 62 counts including racketeering, grand theft, obtaining a mortgage by false representation and scheme to defraud a financial institution. The scheme reportedly went back to around 2003, said reports at the time of his arrest.
  
  Heckler received credit for time served after spending 1,200 days in jail, said Samantha Syoen, a state attorney’s office spokeswoman. He must also pay the victims more than $56,000 and received 100 months of probation, she said. “Our main focus for doing a plea was to get restitution for the victims,” Syoen said. “It’s been a long time coming.”
  
  Heckler was vice president of Fort Myers-based Alternative Home Finance, which would find renters with bad credit ratings and allow them to pick out a house to rent and eventually own, according to court documents.
  
  The company would then allegedly find people with good credit and take out multiple loan applications in the name of one borrower while falsifying applications. After collecting money from a bank, they would allow the house to go into foreclosure, leaving renters without a home, borrowers with bad credit and banks to foot the bill.

Source: Man pleads no contest to Lee County mortgage fraud scheme.

'County Refused To Give Me Same Break It Gave Others!' Says Tax-Foreclosed Homeowner In Effort To Reclaim Home With 'Equal Protection' Lawsuit

In Livingston County, New York, The Livingston County News reports:

• A Livonia man is filing suit against Livingston County to reclaim ownership of his property from foreclosure.
  
  The lawsuit highlights a concession made for a home in Mount Morris — and claims that the same concession should have been be made for anyone whose property was seized for foreclosure auctions in 2011 and 2012.
  
  Robert E. Chabot’s home at 5147 Blank Road was among over 40 parcels destined for sale in the county’s 2011 foreclosure auction.

***

• Chabot’s suit challenges the county’s right to have disallowed his post-June 15 payment of back taxes and penalties. The case centers on the fact that [one] property [...] in Mount Morris and [another] property [...] in Lima have remained in possession of the original owners, even though those two owners likewise failed to pay their taxes before the deadline.
  
  These exceptions to what the county claims is a blanket policy violates constitutional protections, said [Chabot's attorney Derrick A.] Spatorico. “Our argument is that the county has two sets of rules. One set of rules is for most everybody, but there is another set of rules for those who protest.”
  
  Such differential treatment is a violation of both the New York and United States constitutions which insist upon equal protection of all citizens. “It’s a fairness argument. We’re arguing that the law needs to be clearly defined and equally applied — and it’s not,” Spatorico said.

***

• As a solution to the unfairness, Spatorico would hope to see something along the lines of an amnesty program — tied to a specific time frame where Livingston County would accept back tax payment beyond the redemption deadline.
  
  “Until the county rectifies this situation and starts to apply the law equally to everyone, then I think that they have an established practice of allowing exceptions to the rule,” Spatorico said.
  
  Liability implications
  
  If Chabot wins his case, will a similar challenge be opened to every property owner who has experienced loss of his or her property to foreclosure in Livingston County since 2011?
  
  “The county opened the door for this when they failed to apply the law equally to everyone in the county,” Spatorico commented. “They cannot selectively and arbitrarily apply the law.”

For the story, see County challenged with ‘equal protection’ lawsuit.

Lawsuit: 'I Bought A Property Pursuant To A Binding Contract For Deed & Now The Seller Is Trying To Unload The Premises Out From Under Me!'

In Galveston, Texas, The Southeast Texas Record reports:

• Houston resident Archie Patterson has filed suit against Andrew Murphy of Poland, Ind., in response to a dispute over a deed to real property in Galveston County, recent court documents say.
  
  A lawsuit filed July 25 in Galveston County District Court says Murphy's supposed attempt to sell the property to third parties is a breach of contract against Patterson, additionally stating the defendant trespassed to try title.
  
  The suit shows both parties entered into a written contract for deed which called for Murphy to sell the subject property to Patterson in 2008.
  
  According to the original petition, the complainant "has complied with the terms and conditions of the contract, has not received any notice of default concerning the same and is entitled to exclusive possession of the property and specific performance under the subject contract for deed."
  
  Patterson, however, recently learned that the respondent had listed the place for sale despite the covenant between them.
  
  "The defendant's listing and offering of the property for sale to third parties expresses the defendant's unequivocal intent to breach its obligations under the contract, including executing and delivering to the plaintiff's warranty deed conveying good and marketable title to the property, free and clear of any liens and encumbrances and subject only to restrictive covenants and easement of record," the suit says.
  
  Consequently, Patterson seeks a declaratory judgment, injunctive relief and unspecified monetary damages.

Source: Houston man in litigation over deed to Galveston property.

Michigan AG Scores Another Criminal Conviction In Probes Targeting Loan Modification Ripoffs; Suspect Cops Plea To Racketeering, False Pretenses

In Holly, Michigan, M Live reports:

• A Holly woman pleaded guilty for her role in a foreclosure rescue scam that bilked victims out of nearly a quarter-million dollars.
  
  Tashia L. Winstanley, who did business as TLW Mortgage Solutions, pleaded guilty to one count of conducting criminal enterprises (racketeering), one count of false pretenses more than $20,000 and one count of false pretenses from $1,000 to $20,000, according to court records. Attorney General Bill Schuette announced the charges against Winstanley,who was already incarcerated at the Huron Women's Correctional Facility, in May.
  
  An attorney general's office investigation led to the charges, showing that from September 2009 until January 2012, Winstanley operated TLW as a mortgage modification business and collected a fee from clients without making any effort to secure the modifications. Schuette's office said victims came from eight counties, including Genesee County.
  
  Winstanley is serving time for previous convictions for larceny by conversion. She is scheduled to be sentenced Sept. 14. People who believe they are victims of Winstanley or TLW can file a complaint at www.michigan.gov/ag.

Source: Holly woman pleads guilty to role in foreclosure rescue scam.

Virginia AG Reaches Civil Suit Settlement With Alleged Loan Modification Racket Operator

In Richmond, Virginia, The Virginian Pilot reports:

• The state has reached a settlement with a Chesapeake-based mortgage loan-modification company that had been accused of charging illegal advance fees to clients seeking foreclosure rescue services, Virginia Attorney General Ken Cuccinelli said [].

***

• According to the attorney general's office, the settlement with R.L. Brad Street and [company owner Rhonda L.] Wyland includes a permanent injunction prohibiting them from collecting advance fees as well as a judgment of $32,900 against them to be paid as restitution to customers. Cuccinelli said the settlement also calls for the company and Wyland to pay a combined $25,000 in civil penalties and reimburse the state $5,000 in legal fees.

For the story, see Settlement reached on mortgage allegations.

For the Virginia Attorney general press release, see Attorney general announces settlement with Chesapeake-based mortgage loan modification company and its owner.

Senior Duped Into Belief She Obtained Reverse Mortgage Now Faces F'closure; Originator Accused Of Pocketing Loan Proceeds, Making Lulling Payments

In Louisville, Kentucky, WATE-TV Channel 6 reports:

• A Louisville widow is due to lose her home to foreclosure in less than two weeks. She's a victim of an alleged investment fraud scheme that has possibly cost hundreds of people millions of dollars.

***

• Joy [Joines] and her late husband, Kenneth, built a small home in Louisville on waterfront property in a picturesque inlet 25 years ago. Before Kenneth died of cancer in 2005, he wanted financial security for his wife. So he took out a reverse mortgage, believing it would give her income for life, along with $900 a month she receives from another retirement fund.
  
  For seven years, Joy received a $500 monthly payment based on the equity from her home. But this March, PNC Mortgage wrote saying Joy was behind in her mortgage payments. "I have never done anything to hurt anyone, never in my life," she said.
  
  She is one of many investors who lost their retirement savings, as documented in court records. It was part of an alleged investment fraud involving Knoxville-based Benchmark Capital and Louisville accounting firm J. Allen and associates. A federal indictment named Joyce Allen and an associate as part of the scheme.
  
  "The bank bought the contract out, but she had taken a balloon payment and stuck it in her pocket," Joy said. According to the court documents, there's no evidence that any funds sent to Benchmark were ever invested in a legitimate annuity. [...] In July, Joyce Allen pleaded not guilty to six counts of counterfeit securities and conspiracy to commit money laundering.
  
  Foreclosure is scheduled on Thursday, August 16 for the home Joy has been fighting to keep. She says it's inevitable she's going to lose it. "I've never cried so much, and I don't want to cry anymore. I just don't," Joy said.

For more, see Louisville woman about to lose home in reverse mortgage scam.

Return Of Stolen Muscle Car Taken By Foreclosure Vendor Brings More Heat On BofA For Lack Of Oversight In Hiring Process

In Worcester, Massachusetts, the Worcester Telegram & Gazette reports:

• On Tuesday afternoon, a garage door rolled up at the Manchester Police Department in New Hampshire, and Sims Dahrooge laid eyes on a familiar rear spoiler and dual exhaust pipes bristling from the back of a vintage purple muscle car.
  
  “That’s all I had to see, and I couldn’t help it. I just started to burst into tears,” he said yesterday, back in the city with the 1973 Dodge Challenger he restored with his father, Aaron Dahrooge.
  
  As the Dahrooges towed the car back to Worcester on a trailer, on account of a blown transmission and rear tires scorched smooth from untold burnouts, two Manchester men were being held on Massachusetts warrants for receiving stolen property.
  
  The classic American muscle car had been taken from the Burncoat home of Aaron Dahrooge’s deceased mother in March, a day after a Bank of America contractor had gone to the home to winterize and secure it.
  
  Bank of America is foreclosing on the vacant Uncatena Avenue home, which is in Mr. Dahrooge’s control in the meantime as executor of his mother’s estate. He stored the Challenger in the home’s garage during the winter as he did when his mother was alive, he said.
  
  A neighbor told Mr. Dahrooge that the same crew that had winterized the home and padlocked the garage door in March returned the next day, used a key to open the garage lock and towed away the distinctive purple car, which has dual four-barrel carburetors and a chrome air scoop sticking up through the hood.
  
  Mr. Dahrooge, who immediately reported the car stolen, said his attempts to get information about the winterization crew from Bank of America were met with months of stonewalling, a characterization disputed by the bank.

***

• The Dahrooges said investigators told them the two New Hampshire men arrested have criminal records, one of them extensive. They maintain the bank should be liable for the damage to the car.
  
  “The biggest thing for me is Bank of America hired criminals. Don’t they do background checks? This is supposed to be a professional bank,” Sims Dahrooge alleged.
  
  His father’s lawyer, Thomas J. Scannell of the Worcester firm Fusaro, Altomare & Ermilio, said he’s looking into whether the Dahrooges have legal grounds to sue the bank for damages.
  
  In the meantime, Patrick Peryer, 22, and Kurtis Lavigne, 27, both of Manchester, N.H., are fighting rendition to Worcester on charges of receiving stolen property. They were arraigned Tuesday as fugitives from justice on the charges in New Hampshire.

For more, see Missing muscle car back home in Worcester amid foreclosure battle (No explanation of how it was taken, but charges against NH men).

For story update, see Car stolen from foreclosed house causes bank, vendor freeze:

• Local muscle car enthusiast Aaron Dahrooge's successful battle to get his stolen 1973 Dodge Challenger back has prompted one of the world's largest financial institutions to temporarily stop doing business with a major foreclosure vendor in Massachusetts and to require the vendor to verify that all of its employees and subcontractors have up-to-date background checks.

Central Florida Man Faces More Charges In Alleged Scam That Duped Homeowners In Foreclosure To Deed Over Their Homes To Him

In Brooksville, Florida, the Tampa Bay Times reports:

• A Brooksville man accused of trying to sell foreclosed properties he never legally owned to unsuspecting buyers is facing more charges. Three more victims in Hernando County have come forward since Gaetano Antonelli was arrested June 27 and charged with three counts of organized fraud, the Hernando Sheriff's Office said Tuesday.
  
  Antonelli, 62, faces three more fraud charges here. The case has also crossed county lines.
  
  According to the Sheriff's Office, Antonelli targeted home owners facing foreclosure, telling them he could relieve them of their mortgages by suing their mortgage company. Antonelli told them they could walk away and maybe even get money back if they signed their deeds over to him by a power of attorney agreement, said Hernando sheriff's Detective Dustin Mormando.
  
  Then, authorities say, Antonelli would list the houses for sale on Craigslist without the knowledge of the homeowners.

For more, see Brooksville man faces more charges in scheme involving home purchases, sales.

Indictments Filed Against Pair Accused Of Duping Homeowners Into Giving Up Control Of Homes To Avoid F'closure, Illegally Snatching Vacant Homes

In Denver, Colorado, The Denver Post reports:

• The Denver Grand Jury has indicted two men in connection with a series of real-estate scams targeting homeowners facing foreclosure and Spanish-speaking would-be homebuyers.
  
  Alfonso Carrillo, 50, and his associate Rudy Breda, 53, are charged with violating the Colorado Organized Crime Control Act and face multiple counts of theft, burglary and criminal trespass. Carrillo is charged with 18 counts and Breda with 10 counts.
  
  The indictment, filed in Denver District Court [], alleges that Carrillo found homeowners facing foreclosure and, for a nominal fee, persuaded them to give him control of the properties. He misrepresented it as a way to avoid foreclosure. Carrillo and Breda would then allegedly sell the properties using phony documents.
  
  The charges also allege that the duo would illegally gain access to empty homes, taking thousands of dollars in payments from unsuspecting buyers. Once the buyers were discovered by mortgage lenders or the actual property owners, they were forced to vacate the properties. Carrillo and Breda allegedly targeted Spanish-speaking homebuyers who were often undocumented, according to the indictment.
  
  Arrest warrants have been issued for both men, with bail set at $750,000 for Carrillo and $20,000 for Breda. Carrillo already faces multiple felony counts of theft and forgery, but the earlier charges will be dismissed. The next court date for Carrillo and Breda has not been set.
  
  The indictment also alleges Jose Caraveo, 39, and Veronica Fernandez-Beleta, 40, broke into a home and remained there unlawfully from April 2011 to this month. They are charged with first-degree criminal trespass and second-degree burglary.

Source: Denver Grand Jury charges that scammers sold homes they didn't own.

Albuquerque Cops, Feds 'Sting' Suspect Accused Of Hijacking Possession Of Vacant Homes In Foreclosure & Renting Them Out To Unwitting Renters

In Albuquerque, New Mexico, the Albuquerque Journal reports:

• Stephen Jay Bonner, 43, was arrested Wednesday for allegedly entering homes that were vacant and in the process of foreclosure, then renting the houses as if they were his own, according to an Albuquerque Police Department news advisory.
  
  APD detectives and agents of the U.S. Secret Service conducted a joint operation in which a resident of one of the properties used an undercover officer to make a fraudulent rent payment to Bonner, according to APD Officer Robert Gibbs.
  
  The undercover officer observed the transaction, and Bonner was taken into custody without incident by uniformed officers from the Northwest Area Command in a traffic stop, the advisory said.
  
  Bonner allegedly admitted breaking into houses on three different occasions and committed fraud in the rental scam, according to Gibbs.
  
  He was booked into the Metropolitan Detention Center [...] and was being held on a $20,000 cash or surety bond, facing three counts of residential burglary and one count of fraud over $2,500 and under $20,000, according to online MDC records.

Source: ABQ Man Accused of Rental Scam.

Fair Housing Lawsuit Accuses Rural Connecticut Town Of Using Illegal Residency Requirements To Remain "Lily White"

In Bridgeport, Connecticut, Courthouse News Service reports:

• The rural town of Winchester "systematically and unlawfully" discriminates against minorities in its Section 8 housing voucher program to keep the town's black population at statistically zero percent, The Connecticut Fair Housing Center claims in Federal Court.
  
  The Hartford-based Fair Housing Center is joined as a plaintiff by Crystal Carter, who is black, in the lawsuit against The Town of Winchester Housing Authority.
  
  Winchester, pop. 11,000, in rural Litchfield County in northwest Connecticut, is 94.4 percent white, according to city-data.com. Its estimated median household income of $56,260 is 16 percent below the state median of $67,036, according to city-data.
  
  The Winchester Housing Authority is in charge of the Section 8 housing voucher program for Winchester and 16 neighboring communities in a "Rental Assistance Alliance."
  
  The federal complaint claims that "according to the 2010 American Community Survey 5-year estimates, 94.5 percent of housing units in Winchester are occupied by white, non-Hispanic households, while only 4.5 percent are Hispanic. The number of housing units occupied by African-American households is so low that it does not register above 0 percent."
  
  This population trend holds for the other towns in the Rental Assistance Alliance, where in "the percentage of units occupied by white, non-Hispanics is greater than 91 percent," according to the complaint. Carter and the Housing Alliance claim Winchester remains lily white through illegal "residency requirements."
  
  They say in the complaint that admission to Section 8 programs cannot be based on "where the family lives before admission to the program. These requirements are unlawful because in communities with populations that are disproportionately white and/or non-Hispanic they perpetuate segregation by excluding minority applicants who live outside those communities from obtaining housing there."
  
  Carter lived Hartford when she applied for a housing voucher through the Winchester Housing Authority (WHA). She claims that "although WHA's waiting list was open to applicants, WHA refused even to send Ms. Carter an application, telling her that she was ineligible because she did not live within the Rental Assistance Alliance. WHA also told Carter that Winchester was not on a 'bus line,' there were no real jobs there, and it was in the 'woods.' WHA recommended that Ms. Carter apply to the housing programs in Bridgeport, New Haven, or Torrington, all communities with considerably larger African-American and Hispanic populations than the towns in the Rental Assistance Alliance."
  
  Carter and the Fair Housing Center seek declaratory judgment that the WHA is violating the Fair Housing Act, an injunction, and punitive damages.

Source: Rural Town Accused of Housing Discrimination.

For the lawsuit, see Carter, et ano. v. Housing Authority of the Town of Winchester.

L.I. Housing Official Pinched For Allegedly Creating Fictitious Landlord With No Actual Tenant To Illegally Pocket $120K In Section 8 Rental Benefits

From the Office of the U.S. Attorney (Central Islip, New York):

• Federal law enforcement agents [] arrested Louis Abate, the former Fiscal Director for the Nassau County Office of Housing and Community Development (from 2004 to 2012), in connection with a scheme to steal federal housing benefits intended for low-income Long Islanders in need of housing financial assistance.

***

• As charged in the complaint, between May 2009 and August 2011 Abate stole more than $120,000 in federal Section 8 rental subsidies from a Section 8 program he oversaw that serviced individuals residing in Island Park, New York.
  
  Abate allegedly created a fictitious landlord with no associated tenant, and for more than two years diverted federal Section 8 benefits for this supposed landlord to a bank account Abate personally controlled.
  
  As further set forth in the complaint, during this period Abate was successful in illegally paying himself approximately $5,000 per month – more than three times the monthly amount of federal Section 8 subsidies received by any single participating landlord in the Island Park area.

For the U.S. Attorney press release, see Former Nassau County Housing Official Arrested for Theft Of Government Funds (Louis Abate Allegedly Stole More Than $120,000 in Federal Section 8 Housing Benefits Earmarked for Low-Income Long Islanders).