Wednesday, January 23, 2013

Financially Strapped Elderly Veteran Files Suit Accusing R/E Operators Of Stripping Equity From His Free & Clear Home

In Seattle, Washington, Seattle Weekly reports:
  • With this week's $3.3 billion settlement by banks who engaged in faulty foreclosures, you might think that the worst tales of the housing bust are behind us. But the predators of the foreclosure era are still out there, still making money on other people's misery.

    According to a complaint filed last month in King County Superior Court, just such a scenario happened to Ames Larson.

    Larson is a 67-year-old Vietnam veteran and former prisoner of war who, as recently as this past December, owned his three-bedroom Lake City home free and clear. But that's about all he owned. He lived on roughly $1,100 a month, most of it coming from Social Security, according to his attorney, David Leen, who recently started a non-profit called the Northwest Consumer Law Center. Larson couldn't afford to pay his utility bills; Leen think he was using candles for light. He also couldn't keep up with his property taxes.

    Had he known about King County programs for seniors offering tax relief, he probably could have qualified, according to Leen. But he didn't. In June of last year, the county initiated tax foreclosure proceedings against Larson. To stop it, he needed to come up with $11,000.

    He didn't have it. In October, however, several representatives from a business called Northwest Home Buyers knocked on Larson's door. "We buy homes: any house any condition," declares Northwest's website, which also proclaims the ability to provide "quick cash" for homeowners facing foreclosure and other difficult situations.

    The Northwest representatives offered Larson $120,000 for his home, according to the complaint But when another company representative, by the name of Chris Lundquist, showed up at the house a month later with paperwork for Larson to sign, the offer was reduced to $70,000. Zillow estimates the house to be worth a little over $300,000.

    Leen says Larson felt he had no choice but to sign. His house was scheduled to be foreclosed upon in just two weeks. In the end, he came away with only about $40,000, after payment of back property taxes and various transaction fees, according to Leen.

    Lundquist, a defendant in the lawsuit, did not return a phone call seeking comment and the person answering Northwest's phone line said he was too busy to talk.

    What happened after Northwest got its paperwork signed by Larson is a little complicated and indicates the intricate dealings of companies who make their money on distressed properties. Northwest never bought the home, Leen says, but turned it over to another company called Lynx Development. Lynx is managed by a man named Will Heaton, the same man who manages a lending company known as Intrust Funding, which provided a $143,500 loan to finance the sale, according to the complaint. Intrust specializes in providing "fast capital" by creating "loan scenarios that cannot be adequately handled by traditional lending sources," according to its website.

    The complaint alleges that the money obtained through the loan was then distributed to an array of people and businesses that somehow participated in this deal, including Lundquist (who got $22,500) and yet another company managed by Heaton called Invest Now (which got nearly $50,000).

    It was all a way of "stripping money out of the house," says William Snell, an attorney who is working with Leen on the case.

Business Partners File Suit Accusing Their Attorney Of Forging Deed To Swipe Title To Company's Real Estate

In Galveston, Texas, The Southeast Texas Record reports:
  • Alleging a Humble attorney committed forgery to gain ownership of their company’s real estate property, Robert M. Green and Barbara Goostree pursue legal action.

    A lawsuit filed Jan. 8 in Galveston District Court asserts that J. Richard McGoey fraudulently executed a deed to transfer property belonging to Green Diesel Inc.

    The suit says the plaintiffs entrusted the responsibilities of maintaining the corporate records and the good standing of the company to McGoey, however, the defendant failed to do so.

    Plaintiffs also allege the attorney misrepresented Green Diesel, and claimed to be its president.

    Green and Goostree argue McGoey prepared the deed in January 2004, without their knowledge, using Green’s signature.

    They insist Green did not know about the document’s existence until last month, and when he saw reportedly saw it, he noticed his name was misspelled.

    The original petition adds a notary public named Dianne Lynn Abrahamsen stamped the subject paperwork which apparently carried an acknowledgment that Green appeared before her on Jan. 4, 2004.

    Green denies the meeting with Abrahamsen, who is a co-defendant along with McGoey’s spouse, and maintains she was not a notary public at the time of the supposed notarization.

    He also says that he did not approve the 2004 sale that is the focus of the litigation.

    The complainants point out that the McGoeys participated in a recent transaction with Equipment International Pension Fund for approximately $140,000, but the latter “wrongfully kept all of the funds paid for the purchase of the real estate paid by the buyer.”

$38K In Cannabis Seized From Basement-Based Mini-Pot Farm To Cost BC Couple $230K In Home Equity Through Gov't Forfeiture Proceedings

In Kamloops, British Columbia, The Kamloops Daily News reports:
  • A retired Heffley Creek couple with a mom and pop grow-op in the basement of their $660,000 log home agreed to forfeit more than a third of the value of the property after a raid by RCMP.

    Bruce and Ingrid Duncan signed a consent order giving up 35 per cent of the value of their home and acreage under a measure contained in the Controlled Drugs and Substances Act.

    Police found about 200 pot plans in a hydroponic operation in the basement of the couple’s 3,000-foot log home in a March 2010 bust.

    Bruce Duncan, 62, pleaded guilty in B.C. Supreme Court to possession of marijuana for the purpose of trafficking. Charges against his wife were stayed by the Crown. The couple, married 42 years, were arrested when they returned home in the afternoon to find police inside.

    Crown prosecutor Anthony Varesi said the forfeiture for the “moderately sophisticated” grow-op means the couple is on the hook for an equivalent of $230,000. The pot, if brought to market, was estimated to be worth about $38,000.
***
  • Varesi said those caught under forfeiture proceedings often sell their property in order to come up with the equivalent in cash. The Crown’s 35 per cent interest will be registered on the property title.

    In addition to the forfeiture, B.C. Supreme Court Justice Ian Meiklem gave Duncan an 18-month conditional sentence, including six months of house arrest.
For the story, see Grow-op bust costly for retired couple (Husband and wife give up 35 per cent of value of home and acreage).

Tuesday, January 22, 2013

Scrutiny Increases On Texas Lenders Specializing In Unpaid Real Estate Tax Refinancing Schemes That Smell Like Predatory Near-Usurious, Inflated Fee Rackets

Deep in the heart of Texas, Forbes reports:
  • The housing meltdown over the last several years claimed many victims. But in Texas, it keeps creating new ones: the thousands of homeowners who fall prey to property-tax lenders that help them pay overdue property taxes. So now there’s an effort in the new 83rd session of the Texas legislature to prevent property-tax loans from financially disabling still more Texans.

    It turns out that thousands of homeowners not only have ponied up nearly usurious rates to property-tax lenders to get themselves out of a big financial squeeze but also that this specialized group of lenders legally jumps to the front of the line — even ahead of primary mortgage holders, and state and local governments with non-property-tax liens – when it comes to disposition of assets from subsequent foreclosure or sale of the house.

    And property-tax lenders can use “expedited foreclosure,” which has limited judicial involvement and doesn’t allow for scrutiny over certain fees and costs claimed by the lender.

    “It’s a pretty significant issue here, because Texas derives lots of dollars from our property-tax system because we don’t have an income tax,” explained Robert Doggett, an attorney for Texas Rio Grande Legal Aid, an Austin-based not-for-profit consumer-advocacy organization.(1) “So property-tax bills are pretty high.”

    Under these loans, including all fees and interest and other charges by the property-tax lender, “a $10,000 tax bill can turn into a $15,000 to $18,000 bill pretty quickly,” said Steve Scurlock, executive vice president of the Independent Bankers of Texas. “We’re questioning that and looking at potential legislation to address that.”

    One key point, Scurlock said, is that while property-tax lending is legal in Texas, the marketing practices of some companies are less than savory — and, therefore, add to the problem. “Some of their marketing schemes are on the deceptive side,” he said. “They make everything look easy and official.”

    While a unit of local government might let delinquent property taxes for a hard-pressed household slip for as long as two or three years, homeowners can feel undue pressure when they get a solicitation from a property-tax lender that warns of dire consequences if the homeowner doesn’t borrow money now to pay off the tax.

    It’s not that Texas cities and counties, and bank lenders, are sympathetic figures to Texas homeowners or anyone else. The concern is that the property-tax lenders are a predatory group that only have their immediate financial self-interests at heart. Whatever anyone can say about local governments and banks, they have many reasons to include the interests and needs of taxpayers and customers in their actions concerning delinquent taxes.

    A lot of folks are tricked into getting a loan that they don’t really need that is very expensive and is serviced by an entity that doesn’t have their interests at heart and has only its own financial motives at heart,” Doggett explained, “unlike [officials of] taxing entities that aren’t going to lose their jobs one way or another if they don’t squeeze more dollars out of a low- to moderate-income family.

    Delinquent borrowers “jump from a frying pan into a fire” by succumbing to the lures of a property-tax lender, he said. “Miss a couple of payments and that lender will be all over you.”

    “And with their superior-lien status, they’re going to get their money no matter what. At least a [regular] lender has restraints. These people have none — all the benefits of government in their superior-lien status, but no checks and balances that government and elected officials have.”
For more, see Predatory Property-Tax Lenders Are Targeted In Texas Effort.

(1) Texas RioGrande Legal Aid (TRLA) is a non-profit organization that provides free legal services to low-income residents in sixty-eight counties of Southwest Texas, and represents migrant and seasonal farm workers throughout the state of Texas and six southern states: Kentucky, Tennessee, Alabama, Mississippi, Louisiana and Arkansas.

Real Estate Tax-Delinquent Hubby Challenges Town's Foreclosure, Saying It Only Notified Co-Owner/Wife Of Legal Proceedings; New Owners Took Title 3+ Years Ago, Still Waiting To Take Possession

In Portland, Maine, the Bangor Daily News reports:
  • The Maine Supreme Judicial Court is considering the case of a Madawaska man embroiled in a dispute against another man over ownership of a home lost to foreclosure more than three years ago.

    The high court heard oral arguments in the case of Jeffrey Stoops v. Richard Nelson on Tuesday at the Cumberland County Courthouse in Portland.

    Jeffrey Stoops and his wife, Jeanne, were represented by attorney Jeff Ashby of Presque Isle. Richard Nelson was represented by Richard Solman, a Caribou attorney.

    Jeffrey and Jeanne Stoops were the original owners of a home in Madawaska, which they lost to foreclosure in 2006 for failure to pay municipal taxes. The town subsequently sold the property in 2009 to Richard Nelson. Jeffrey and Jeanne Stoops have retained residency while attempting to seek relief in court.

    Before the Law Court, Jeffrey Stoops was appealing a judgment entered in Aroostook County Superior Court by Justice E. Allen Hunter. It granted summary judgment to Richard Nelson and his wife, Betty, declaring them the owners of the home lost by the Stoops to foreclosure.

    On Tuesday, Ashby argued that the Superior Court erred in granting the motion because the town of Madawaska failed to give his clients proper notice of the pending foreclosure in violation of the due process clause of the Fourteenth Amendment.

    He also argued that the town failed to strictly adhere to a state statute which outlines the steps a municipality must take in order to foreclose a municipal tax lien.

    According to court documents, a 30-day notice sent by the town of Madawaska to Jeffrey and Jeanne Stoops regarding 2004 delinquent taxes was accepted and signed by Jeanne Stoops. Such a notice is required by law and informs the party that they could lose their property if the taxes are not paid.

    Later, the town also sent a notice of impending foreclosure relating to a 2005 tax lien, which was also required by law. It was addressed to the couple and accepted and signed by Jeanne Stoops. It warned that foreclosure would occur in December 2007 and if that happened, the town would own the home.

    Solman said Tuesday that the town went “above and beyond” its statutory obligations as far as notifying the couple that their taxes were delinquent and that they were at risk of losing their home.

    Ashby, however, argued that Jeffrey Stoops was a key part of the process and the town should have done more to assure that both property owners were aware of what was taking place. The town mailed letters related to delinquent taxes to Jeffrey Stoops, but both attorneys acknowledged confusion over whether they were received. One notice sent certified mail was returned unclaimed.

    Chief Justice Leigh I. Saufley questioned Ashby about how the couple could not have understood that they were in danger of losing their home.

    “Jeanne Stoops signed the two letters sent by the town,” she said on Tuesday. “How can she say that she did know the process?”

    Solman said on Thursday that his clients were just anxious for the case to be over.

    They lawfully purchased this home back in 2009 and they have not even had a chance to live in it,” he said. “And they are paying the taxes on it. They are just hoping to get this resolved so they can take possession.”

    Ashby did not return calls seeking further comment.

Land Court Judge OKs Real Estate Tax-Delinquent Property Owner's Effort To Redeem Home & Void Tax Foreclosure; Reverses Town's Earlier Decision To Refuse Back Payments & Snatch Premises

In Middleboro, Massachusetts, The Enterprise reports:
  • A Land Court magistrate overturned a selectmen decision and granted a man’s plea to pay his back taxes and avoid losing his property to the town.

    “That’s what I expected,” selectmen Chairman Alfred P. Rullo Jr., said about the ruling, declining further comment.

    On Jan. 7, selectmen unanimously denied a request by John and Rose Ewas to vacate the foreclosure on their property.

    On Thursday, Boston Land Court Clerk Magistrate Deborah J. Patterson overturned the selectmen’s denial and granted John Ewas’ request to vacate the foreclosure.

    The issue dates back to September 2011, when the Ewases’ property at 4 Vine St. was foreclosed on and the title transferred to the town for back taxes for the years 2004, 2006, 2009, 2010 and 2011. By September 2012, Ewas began proceedings to redeem the property, which culminated in the Jan. 7 selectmen’s hearing.

    Judge Patterson said Ewas was within the one-year legal time limit to make a motion to void the foreclosure.

    “If a town opposes the motion to vacate, I will hear the argument,” Patterson said, adding it is within her jurisdiction to allow Ewas to pay the back taxes. Patterson stipulated that Ewas must pay the taxes in full and instructed the town to provide the court with an itemized bill.

Monday, January 21, 2013

Homeowner Lawsuit: Law Office Charged Me Ten$ Of Thousand$ For Foreclosure Defense, Yet Had Me File As 'Pro Se' Defendant

In Chicago, Illinois, Courthouse News Service reports:
  • A "foreclosure defense" office charged a client $41,000 for "filing fees" and charged her for filing her own legal work, telling her filing pro se would "give her an advantage" on appeal, the woman claims in court.

    Lori Lappas sued Illinois Foreclosure Defense LLC and Innocent Obi, in Cook County Court. The brief, 4-page complaint contains a welter of alarming allegations.

    Illinois Foreclosure Defense is "owned by two attorneys who provide legal services for clients," the complaint states, and Obi is and was their employee.

    The complaint does not state that Obi is an attorney, but Lappas says he was her "only contact" with the office.

    She says she hired the defendants in January 2012 to represent her in two foreclosure cases.

    "Lori Lappas paid Illinois Foreclosure defense in excess of $20,000 over the last 10 months," the complaint states.

    It adds: "That in addition to the defense of the two foreclosure lawsuits, Innocent Obi and Illinois Foreclosure Defense agreed to represent Lori Lappas in three additional lawsuits and represent her with yet a fourth matter with regard to issues with the Internal Revenue Service.

    "That for each of the cases and the issue with the IRS, Ms. Lappas paid retainer fees to the Illinois Foreclosure Defense.

    "That for each of these three additional lawsuits and with the representation Innocent Obi and Illinois Foreclosure Defense did no work and refuses to refund any of the retainers paid [by] Ms. Lappas."

    "That with respect to the original foreclosure cases Innocent Obi had, despite being paid as attorneys for Ms. Lappas, had Ms. Lappas file appeals as pro se defendant with Illinois Foreclosure Defense and Innocent Obi not only did the actual filing of the pro se filings but further cut and pasted Ms. Lappas's signature without her authority.

    "That with the pro se appeals, such appeals were prepared by Obi Innocent on behalf of Illinois Foreclosure Defense yet had Ms. Lappas file pro se and also had her pay retainer fees for those appeals.

    "That Ms. Lappas was told that filing pro se would give her an advantage in the appellate court.

    "That these appeals have not halted any prosecution of the foreclosure cases nor had any advantage to Ms. Lappas."

    To cap it off, Lappas says: "That before Ms. Lappas left town on October 23, 2012, Ms. Lappas left a blank signed check with Innocent Obi and Illinois Foreclosure Defense in order to pay any needed filing fees or her monthly $400 fee if she could not be reached.

    "That upon her return Ms. Lappas found that Innocent Obi had written out the check for $41,000 to Illinois Foreclosure Defense; further noting that the check was written the same day Ms. Lappas left town on October 23, 2012."

    Lappas says she has repeatedly asked for "copies of all work completed by Illinois Foreclosure Defense," but "was never given any copies."

    She seeks damages for fraud and breach of contract, and says her damages "include but are not limited to the loss of her homes."

Phony Real Estate Agent Pinched For Grand Theft After Allegedly Selling Home That Didn't Belong To Him; Victimized Family Coughed Up $25K To Move In, $20K More In Fix-Up, Then Got The Boot From Foreclosing Bank

In Miami, Florida, Miami New Times reports:
  • In January 2011, Renan Rico bought a home for $25,000 and moved his family in. Then, after completing tens of thousands of dollars of renovations, he started receiving notices that the home was owned by a bank and under foreclosure.

    Turns out the realtor they bought it from, Ricardo Ribas, didn't own the home. Nor did he represent the people that did. Nor was he actually a realtor. Basically, he was an "unrealtor."

    Ribas had pretended to be a realtor, and in the case claimed that he had bought the home he was selling along with several others at auction.

    Rico and his family moved in, even thought they didn't receive the title. Ribas told him that the closing was pending. In the meantime Rico had spent $20,000 upgrading the home.

    The bank eventually forces Ribas and his family out of the home.

    Police arrested Rico [] on charges of grand theft. They believe that others victims may have also fallen for his scam. Anyone who may have dealt with Ribas is asked to call Economics Crime Bureau at 305-994-1000.

Baltimore Feds Indict Six In Alleged Straw Buyer Scam Designed To Generate Cash Proceeds That Were Subsequently Pocketed While Leaving Existing Mortgages Unpaid

From the Office of the U.S. Attorney (Baltimore, Maryland):
  • A federal grand jury has indicted six defendants for conspiracy in a $4.5 million mortgage fraud scheme: [...](1)
***
  • The indictment alleges that Kreamer worked at Sanford Title Services LLC located at 8900 Snowden River Parkway, Columbia, Maryland. In 2002, her Maryland license to issue title insurance policies was revoked.

    From June 2008 to January 2010, Kreamer, Williams, Scott, Udeze and Peete allegedly arranged for individuals, including Green, to buy and sell real estate so they could improperly obtain money from the transactions.

    Kreamer, Williams, Scott, Udeze and Peete are alleged to have created multiple versions of settlement statements to deceive lenders, lien holders, buyers and sellers; and arranged for proceeds from mortgage transactions to be disbursed to shell companies created by the defendants in order to disguise that the money was really for their benefit.

    Kreamer and Sanford Title failed to make required disbursements of settlement funds to pre-existing lien holders, funneling the money instead to themselves.
For the U.S. Attorney press release, see Six Defendants Indicted in $4.5 Million Mortgage Fraud Scheme (Defendants Used Sanford Title Services and Shell Companies to Fraudulently Disburse Settlement Proceeds to Themselves).

(1) Bonnie Kathleen Kreamer, a/k/a “Bonnie Meehan,” age 47, of Riva, Maryland; Niesha Williams, age 33, of Fort Washington, Maryland; Rhonda Scott, age 51, of Oxon Hill, Maryland; Emeka Udeze, age 37, of Bowie, Maryland; Demetrius Peete, age 45, of Manassas, Virginia; and Gregory Green, age 49, of Waldorf, Maryland.

Sunday, January 20, 2013

Prosecutors To Push For 14 Years For Scam Head Who Used Control Of Entire R/E Closing Process To Pocket Refinance Procceds From 40+ Victimized Homeowners, Leaving Dozens Of Existing Mortgages Unpaid; Squealing Confederates Expect Probation, Dodge Jail

In Freehold, New Jersey, the Monmouth County Prosecutor's Office recently announced:
  • Frederick Tropeano pleaded guilty [] to laundering millions of dollars through an extensive mortgage refinance fraud scheme that victimized more than 40 homeowners in New Jersey and New York, Acting Prosecutor Christopher J. Gramiccioni announced.

    Tropeano, 46, of Holmdel, pleaded guilty to first-degree financial facilitation of criminal activity (money laundering) before Monmouth County Superior Court Judge Ronald L. Reisner.

    Tropeano, who has been incarcerated in lieu of bail since the date of his arrest on July 21, 2010, was remanded to the Monmouth County Correctional Institution. Tropeano’s sentencing was scheduled for March 22.

    In accordance with his plea agreement, the Monmouth County Prosecutor’s Office will recommend that Tropeano is sentenced to 14 years in prison, with a 7-year period of parole ineligibility. The Office will also recommend that Tropeano be required to make full restitution to his victims as a condition of his sentence.

    The year-long investigation revealed that Tropeano and a number of his associates from Hawthorne Capital Corporation (Hawthorne), formerly of Manalapan and New York City, engaged in a systematic scheme to defraud dozens of homeowners and financial institutions throughout New Jersey and New York – a fraudulent investment system often referred to as a “Ponzi” scheme.

    The investigation began in May 2010 after a homeowner contacted the Office regarding concerns she had about her home refinance with Hawthorne. The homeowner indicated that a check sent by Hawthorne, that was intended to pay off her original mortgage, had bounced with non-sufficient funds to support its deposit.

    Further investigation uncovered widespread and ongoing fraud within the company, to include 11 additional homeowners who were defrauded by Hawthorne in the refinance of their homes, as well as an attorney in New York whose identity had been stolen and used in furtherance of the fraud.

    The president of Hawthorne was identified in corporate filings as Silvano Tropeano, the father of Frederick Tropeano. Hawthorne had offices in New Jersey, New York and Pennsylvania, although the principal location of its operations was in Manalapan. Frederick Tropeano was identified as the individual responsible for the daily business operations at Hawthorne.

    The mortgage refinance fraud scheme was perpetrated by Tropeano and his conspirators’ ability to manipulate and control the entire property settlement process. An example of the fraud scheme is as follows:

    Homeowners would refinance with Hawthorne and banks would thereafter issue mortgage funds at settlement to refinance the properties. Rather than using these funds to appropriately pay off a homeowner’s original mortgage, Tropeano and his conspirators diverted and stole settlement funds and used the money to enrich themselves or members of their families, or alternatively used them to pay other outstanding and unrelated business debts.

    Two title [companies] directly involved with Hawthorne - “Hawthorne Abstract” and “Rapid Abstract” – intentionally failed to conduct proper records checks to determine whether prior mortgages were being paid.

    Title companies are required to ensure that original mortgages are paid in full, and new refinance mortgages are properly recorded as an existing mortgage debt. Since Tropeano and his associates operated these related title companies, they effectively controlled the entire “vertical” refinance process and were therefore able to defraud homeowners who expected their homes to be refinanced, and banks that expected to have mortgage debts repaid or new debts properly recorded.

    As the investigation progressed, investigators determined that more than 40 homeowners had been victimized by Hawthorne’s refinance scam. In some instances, funds that were intended to pay off the homeowners’ original mortgages were significantly delayed, resulting in negative reports on their credit scores and the need to hire legal counsel.

    In other instances, payoffs never occurred, leaving the homeowners with two mortgages attached to their properties.

    Tropeano and his associates also stole the identities of two homeowners who had filled out initial refinance applications, and illegally used these identities to cause financial lending institutions to fund refinances that never actually occurred.

    The total amount of calculated theft perpetrated by Tropeano and his associates was more than $7.5 million.

    To further the refinance fraud scheme, Frederick Tropeano and Silvano Tropeano established fraudulent bank accounts in the names of two attorneys, and listed them as the settlement agents on mortgage refinances without their knowledge or consent.

    Co-defendant John Kosta conducted the closings on the new mortgages and also notarized documents required for the closings, despite the fact that Kosta was not a notary or licensed to conduct such closings.

    As a further part of the scheme, co-defendant Krista Selig, Esq., was listed as the settlement attorney on 12 fraudulent closings and facilitated the fraudulent transactions on behalf of Hawthorne.

    Silvano Tropeano, John Kosta, and Krista Selig, Esq. all pleaded guilty earlier last year to third-degree conspiracy charges before Superior Court Judge Thomas F. Scully and are pending sentence. Selig also pleaded guilty to a single third-degree theft count.

    All defendants agreed to cooperate in the prosecution of their co-defendants and are expected to receive probationary sentences.(1)
For the Monmouth County Prosecutors's Office press release, see Fraudster Admits To Laundering More Than $7.5 Million, And Defrauding Dozens In Widespread Mortgage Refinance Fraud Scheme.

(1) "When a conspiracy is exposed by an arrest or execution of search warrants, soon-to-be defendants know that the first one to "belly up" and tell what he knows receives the best deal. The pressure is to bargain and bargain early, even if an indictment has not been filed." United States v. Moody, 206 F.3d 609, 617 (6th Cir. 2000) (Wiseman, J., concurring) (referring to the not-uncommon 'race to the prosecutor's office' that breaks out among participants in an 'about-to-fall-apart' criminal conspiracy).

Misapplication Of Entrusted Property Lands Ex-Closing Attorney Four Years After Pocketing $237K+ In Client's Refi Cash; Failed To Pay Off Existing Lien, Leaves Homeowner With Two Mortgages & Facing Foreclosure

In Freehold, New Jersey, NJ.com reports:
  • A former Freehold attorney was sentenced to four years in prison for misappropriating her clients mortgage funds, the prosecutor’s office said Friday.

    Deirdre Przygoda, 48, was representing a client who was refinancing her home and was given more than $237,000 to pay off the original mortgage, Acting Prosecutor Christopher Gramiccioni said in a news release. The attorney removed the funds, which had been deposited in her trust account, he said.

    Since the original mortgage was not paid off, the homeowner now has two mortgages attached the property, and it’s in foreclosure, Gramiccioni said.

    Przygoda pleaded guilty Nov. 13, 2012 to second-degree misapplication of entrusted property. In addition to the prison sentence, she was ordered to pay $237,444 in restitution.(1)
Source: Former attorney sentenced to prison for misusing client's money.

(1) To the extent the victimized homeowner can't collect any money on its restitution judgment from the attorney, he/she may consider filing a claim (if one hasn't already been filed) with the New Jersey Lawyers' Fund for Client Protection, which was established to reimburse clients who have suffered a loss due to dishonest conduct of a member of the New Jersey Bar. According to the Fund's website, for loss claims that are determined to be eligible for a reimbursement there currently is a limit of $400,000 per claimant for claims arising after January 1, 2007 and an aggregate maximum for claims against a single attorney of $1,500,000. Lower per claimant maximums apply to claims arising prior to January 1, 2007, its website states.
For similar funds established to reimburse clients who have suffered a loss due to the dishonest conduct of attorneys in other states and Canada, see:

NYC HOA Tags Unit Owner With Suit Claiming Smoke From Pot Parties Goes Through Walls, Air Vents & Wafts Into Neighboring Units

In New York City, the New York Post reports:
  • This co-op says its going to pot, thanks to one of its residents.

    The board of The Fontaine, on the Upper East Side, is suing the longtime occupant of Unit 8B, claiming the man’s guests spark up so much marijuana in his apartment that the acrid smoke wafts into neighboring units.

    In the lawsuit filed in Manhattan Supreme Court yesterday, a property manager for the co-op at 353 E. 72nd St. blamed all the purple haze in the building on Richard Kempter, 73, who has lived in the apartment for 12 years.

    “Problem is that the stepson and a group of his friends use the apartment as a place to smoke marijuana when Richard is away,” the manager said in the filing.

    There’s so much pot smoke coming from 8B, the suit alleges, that one neighbor opened thedishwasher on a clean load of dishes and the smell was overwhelming,” court documents claim.

    “The smell of VERY strong marijuana is wafting in through the vent in the bathroom and the stench goes right to my bedroom. This is so offensive, you have no idea,” one resident complained in the suit.

    Another griped, “It is 10:45 p.m. and my apartment smells like a party was going on while I was out for the evening . . . The stench of musty pot that is lingering in my closet is unbearable.”(1)

Saturday, January 19, 2013

NH Supremes: Tenant To Pocket $1K Plus Add'l $1K/Day For Each Day Landlord Willfully Failed To Provide Heat After TRO Issuance; State Statute Also Sticks Landlord With Tab For Renter's Legal Fees

From Justia US Law:
  • Respondent [landlord] Nahla Abounaja appealed a district court order that awarded petitioner [tenant] Myla Randall, $18,000 in damages because of the [landlord]'s willful failure to provide heat to the [tenant]'s apartment for eighteen days. [Tenant] rented an apartment from the [landlord] in Rochester. At some point before March 23, 2011, [tenant] complained to the city's plumbing and health inspector that her apartment lacked heat.

    An inspector came to the premises and discovered that there was no heat in the [tenant]'s master bedroom because neither the radiator nor the electric heater worked. The inspector called [landlord] about this issue and met with her two days later.

    The inspector then sent a letter to the [landlord] about this problem, giving her fourteen days to remedy it. The [landlord] did not respond to the letter, nor did she return the inspector's subsequent telephone calls.

    [Tenant] then filed suit on April 12, and the trial court issued a temporary order requiring [landlord] "to immediately restore and maintain all utility services" to the [tenant]'s apartment. Following the hearing on the petition, the trial court found that the [landlord] was aware that the heating units did not work and that she failed to have them repaired until April 18, and that her actions were willful.

    In her brief, [landlord] argued that her conduct was not "wil[l]ful" because she did not cause the petitioner's apartment to lack heat in the first instance. She argued that, at most, she merely "allow[ed]" the heating service to be interrupted; she did not "cause" the interruption itself. Her merely "negligent omission" did not constitute a willful act.

    Based upon the evidence at trial, the [New Hampshire] Supreme Court concluded the trial court reasonably found that the [landlord]'s failure to have the units repaired was intentional, and, therefore, willful.

    However, because the trial court committed plain error when it awarded the [tenant] $1,000 per day for at least some days that the [landlord]'s violation of RSA 540-A:3, I, the Court vacated $17,000 of the damage award and remanded the case for further proceedings.

    On remand, the trial court was tasked with determining whether [landlord] willfully violated RSA 540-A:3, I after April 12, and, if so, the court was instructed to award [tenant] $1,000 per day for each day that the [landlord]'s violation continued.(1)
Source: Justia.com Opinion Summary: Randall v. Abounaja.

For the ruling, see Randall v. Abounaja, No. 2011-456 (N.H. January 11, 2013).

(1) According to the court:
  • Under the version of RSA 540-A:4, IX(a) in effect when the events giving rise to this appeal occurred, a violation of RSA 540-A:3, I, entitled the petitioner to "the civil remedies set forth in RSA 358-A:10 for the initial violation, including costs and reasonable attorney's fees incurred in the proceedings." RSA 540-A:4, IX(a) (Supp. 2012).

    RSA 358-A:10 (2009) provides for recovery "in the amount of actual damages or $1,000, whichever is greater." Because we have upheld the trial court's finding that the petitioner willfully violated RSA 540-A:3, I, we also uphold its determination that the petitioner was entitled to damages of $1,000 for that initial violation.

    RSA 540-A:4, IX(a) also entitled the petitioner to damages for "[e]ach day" that the respondent's violation continued "after issuance of a temporary order." RSA 540-A:4, IX(a) (emphasis added); see Wass, 158 N.H. at 283. The temporary order in this case was issued on April 12, 2011.

Civil Rights Feds, Property Manager Agree To $15K Slam To Settle Allegations That He Sexually Harassed Female Tenants In Violation Of Fair Housing Act

From the U.S. Department of Justice (Washington, D.C.):
  • The Justice Department [] announced that property manager Rudy Ferrante agreed to a $15,000 civil judgment against him, to resolve allegations that he sexually harassed female tenants in Portland, Maine.

    The department’s complaint alleged that Ferrante subjected his female tenants to unwanted sexual comments and touching, granted tangible housing benefits in exchange for sexual favors and took adverse actions against female tenants when they refused his sexual advances.
***
  • “The women involved in this case were subjected to intimidating and severe acts of sexual harassment in their homes, where they have a right to feel safe,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This order sends the message that the Civil Rights Division does not tolerate such conduct and will enforce the right to equal access to housing when it learns of violations of the Fair Housing Act.”

    The department began investigating Ferrante after Pine Tree Legal Assistance,(1) a Portland-based legal aid organization, notified the department of sexual harassment complaints it had received about Ferrante.
For the DOJ press release, see Justice Department Obtains Judgment Against Maine Landlord for Sexually Harassing Tenants.

(1) Pine Tree Legal Assistance provides free legal help to Maine people with low incomes, and has offices in every part of the state.

Co-Conspirators Variously Get A Few Months Prison Time &/Or House Arrest For Hanging Dead Raccoon From Noose On African Family's Porch, Interfering w/ Their Housing Rights Under Fair Housing Act

From the Office of the U.S. Attorney (Baltimore, Maryland):
  • U.S. District Judge Ellen L. Hollander sentenced James Nowicki, age 29, of Baltimore, [] to five months in prison followed by three years of supervised release, with five months of the supervised released to be served as home detention, for conspiring to deprive a person of civil rights and violating the Fair Housing Act, in connection with his involvement in hanging a raccoon on the porch of a family from Africa.

    Judge Hollander also sentenced Dena Whedbee, age 43, to seven months of home detention as part of two years probation, and sentenced her daughter Brittany Whedbee, age 21, [] to six months of home detention. Judge Hollander also ordered the Whedbees, both of Baltimore, to each perform 100 hours of community service for their involvement in the conspiracy.
***
  • According to their plea agreements, Nowicki conspired with Dena and Brittany Whedbee, Joshua Wall and Billy Pratt to hang a dead raccoon from a noose on the porch of an African family, in order to frighten the family and interfere with their housing rights. Dena and Brittany Whedbee encouraged their co-conspirators to hang the raccoon on the family’s porch. On April 29, 2010, Nowicki and Dena Whedbee found a dead raccoon and gave Wall a rope to make a noose. Later that night, Pratt acted as a look-out while Nowicki and Wall hung the raccoon on the porch of the home.

    Billy Ray Pratt, age 24, of Halethorpe, Maryland and Joshua Wall, age 21, of Essex, Maryland, previously pled guilty to their involvement in the conspiracy, and both were sentenced to four months in prison.
For the U.S. Attorney press release, see Final Three Conspirators Sentenced for Civil Rights Violation (Used a Noose to Hang a Dead Raccoon on a Family’s Porch).

Michigan Bank Settles Race-Based Home Lending Discrimination Charges With Feds For $165K

In St. Charles, Michigan, MLive reports:
  • A Michigan bank based in Saginaw County will open a loan office in a black Saginaw neighborhood as part of a $165,000 settlement in a racial discrimination lawsuit, the U.S. Justice Department announced.

    The deal, which requires court approval, was announced on Tuesday, Jan. 15, on the same day the DOJ complaint was filed.

    The Justice Department claims that St. Charles-based Community State Bank served the needs of white Saginaw- and Flint-area neighborhoods "to a significantly greater extent than" majority black neighborhoods from 2006 to 2009.

    Documents: Complaint and Settlement

    The FDIC visited the bank in 2010 and referred the case to the DOJ for investigation.

    The bank disputes many of the claims, chief executive Bob Wolak said, but decided to settle to avoid a lengthy court battle.

    Under the settlement, the bank will invest $75,000 in a special financing program to increase the amount of credit the bank extends to majority black neighborhoods in and around Saginaw, $75,000 in partnerships with organizations that provides credit, financial, homeownership, and/or foreclosure prevention services to the residents of these neighborhoods, and $15,000 in outreach that promotes its products and services to potential customers in these neighborhoods.

    The bank also will open a loan production office in a majority black neighborhood of Saginaw and conduct fair lending training for its employees. The agreement also prohibits Community from discriminating on the basis of race in any aspect of a credit transaction.

Friday, January 18, 2013

California Supremes: Oral Promises Not Appearing In Written Contract Admissible In Court When Trying To Prove Bankster Fraudulently Tricked Borrower Into Signing Agreement

In Sacramento, California, the San Francisco Chronicle reports:
  • Borrowers facing default on a loan can try to prove that the lender orally promised them an extension that didn't appear in the written contract, the state Supreme Court ruled Monday while overturning a 1935 decision that restricted evidence of fraud in contract disputes.

    A lawyer for the borrowers, a Fresno County couple, called the unanimous ruling a victory for consumers. The lender's lawyer said the court had eliminated important protections for written contracts.

    The couple, Lance and Pamela Workman, fell behind on repaying a $776,000 loan from the Fresno-Madera Production Credit Association and signed an agreement in March 2007 pledging eight properties as security in return for a three-month extension.

    The lender sought foreclosure after the Workmans failed to meet the three-month deadline. But the couple said the credit association's vice president had told them two weeks before the agreement was signed, and repeated at the time of signing, that they would actually have two years to make the payments and would have to put up only two ranches as security.

    The Workmans later repaid the loan - selling the eight properties at a loss, according to their lawyer, Steven Paganetti - and then sued the lender for fraud for allegedly misleading them about the terms of the loan.

    The credit association argued that the vice president's alleged promise to the couple was inadmissible because, under the law, a written contract overrides any previous oral statements between the signing parties.

    The California Bankers Association and other lending organizations took the same position when the case reached the state's high court. Arguing that contracts should be enforced as written, they asked the court to reaffirm the 1935 ruling that allowed oral evidence in such cases only to prove that a contract was procured by fraud and not to contradict any of its stated terms.

    But the court, in an opinion by Justice Carol Corrigan, said the 1935 ruling was poorly reasoned, had been rejected by other states and "may actually provide a shield for fraudulent conduct."

    Monday's decision allows the Workmans to offer the lending officer's promise as evidence that the credit association had deceived them into signing the agreement or misled them about its contents.

    The ruling will "protect consumers from the old bait-and-switch" and should allow the Workmans to take their case to a jury, said Paganetti, their lawyer.

    Scott Ivy, the credit association's lawyer, said the ruling allows California courts to refuse to enforce written contracts "based upon alleged oral statements that directly conflict with the written terms." He said the lender will now try to get the suit dismissed on the grounds that the Workmans acted unreasonably by failing to review the contract before signing it.

Feds Pinch Eleven In Vegas-Area Scheme To Fraudulently Take Over Control Of Local HOAs

From the Office of the U.S. Attorney (Washington, D.C.):
  • A federal grand jury in Nevada today returned an indictment against 11 individuals for their alleged roles in a scheme to fraudulently take control of homeowners’ associations in the Las Vegas area.
***
  • The charged defendants, all from the Las Vegas area, include: Jose Luis Alvarez, 45; Rodolfo Alvarez-Rodriguez, 44; Ricky Anderson, 49; David Ball, 44; Leon Benzer, 46; Edith Gillespie, 51; Keith Gregory, 59; Maria Limon, 45; Barry Levinson, 45; Charles McChesney, 47; and Salvatore Ruvolo, 84. Each is indicted on one count of conspiracy to commit mail and wire fraud. Most of the defendants are also variously charged with individual counts of mail fraud and/or wire fraud. Limon is additionally charged with making a false statement to law enforcement.

    According to court documents, the fraud scheme operated from approximately August 2003 through February 2009 to direct construction defect litigation and repairs at condominium complexes to a particular, conspiring law firm and Benzer’s construction company, Silver Lining Construction (SLC).

    In order to accomplish the scheme, according to the indictment, Benzer and co-conspirators identified homeowners’ associations (HOAs) that could potentially bring construction defect cases. They then allegedly enlisted real estate agents to identify condominium units within the HOA communities for purchase.

    According to court documents, Benzer and others, including Gillespie, then enlisted “straw purchasers” to use their names and credit to purchase condos in the complexes. The indictment alleges that Alvarez, Alvarez-Rodriguez, Anderson, Ball, Gillespie, Limon, McChesney and Ruvolo acted as straw purchasers.

    On at least 37 occasions, Benzer and certain co-conspirators allegedly provided the down payments and monthly payments on behalf of the straw purchasers, including HOA dues and mortgage payments, and various false and misleading statements were made to secure financing for the properties. To manage the properties, Benzer and others allegedly conspired to open at least five bank accounts through which they moved more than $8 million. Eventually, 33 of the 37 units went into foreclosure.

    According to court documents, on several occasions and at the direction of Benzer, co-conspirators transferred a partial interest in particular condominiums to other co-conspirators to make them look like homeowners who could stand for election to the HOA board of directors, which many of these individuals and the straw purchasers agreed to do.

    To ensure conspirators won the elections, according to the indictment, the defendants employed deceitful tactics, such as submitting fake and forged ballots, some of which were sent through the U.S. mail.

    Co-conspirators also hired complicit attorneys to run the HOA board elections as “special election masters,” to preside over the HOA board elections and supervise the counting of ballots.

    Once elected, according to the indictment, the conspiring board members met with Benzer and other co-conspirators in order to manipulate board votes and process, including the selection of property managers, contractors, general counsel and attorneys to represent the HOA – including Benzer’s construction company and the conspiring law firm. Gregory and Levinson, both attorneys licensed in Nevada, allegedly agreed to become the general counsel for the Vistana and Sunset Cliffs; and Park Avenue and Pebble Creek complexes, respectively.

    Limon, Benzer and others also allegedly agreed to open a property management company in order to provide services at Chateau Nouveau and other condo complexes in furtherance of the scheme. According to the indictment, Limon falsely told law enforcement officials she did not communicate with Benzer about this and did not know he funded and controlled her company.

    At the conclusion of the scheme, millions of dollars of Vistana’s construction defect settlement proceeds were transferred to Benzer and SLC, according to the indictment. According to court documents, the defendants were each given cash or things of value from Benzer and others for their alleged roles in the conspiracy.

Delusional Feds On Surrendering To Banksters On Latest Foreclosure Fraud Deal: We Drove A Hard Bargain

American Banker reports:
  • The abrupt and embarrassing end of the independent foreclosure review raised many questions that policymakers didn't bother to answer.

    Until now.

    In an interview Tuesday, Morris Morgan, the federal government's point man for the painstaking review of 3.8 million mortgage loans, provided new details about the $8.5 billion deal regulators cut with 10 servicers last week.

    "The settlement idea was certainly initiated by the regulators," said Morgan, who joined the Office of the Comptroller of the Currency in 1985.

    That runs counter to conventional wisdom, which says the servicers moved to shut the costly review process down. Mike Heid at Wells Fargo Home Mortgage is widely credited with spearheading the settlement.

    But Morgan not only insisted government officials drove the deal, he said the negotiations were tough and nearly collapsed.

    "I was more active in" the negotiations "than any other individual from the regulatory side," Morgan said. "Did we drive a hard bargain? I think yes."
For more, see OCC Defends Foreclosure Deal, Says It Drove 'Hard Bargain' (The abrupt and embarrassing end of the independent foreclosure review raised many questions that policymakers didn't bother to answer).

Thursday, January 17, 2013

Screwed Over S. Florida Houseboat Owner Scores Big Win In U.S. High Court; Supremes Say Contraption Used As Floating Home Was A Non-Vessel Not Subject To Federal Maritime Law; City Wrong In Seizing, Auctioning, Destroying It

In Riviera Beach, Florida, The Palm Beach Post reports:
  • Fane Lozman, a Marine turned multi-millionaire inventor turned thorn in the side of Riviera Beach officials, has won his long-running legal battle against the city over his floating home.

    In a 7-2 decision, the U.S. Supreme Court on Tuesday declared that Lozman’s 60-foot, two-story home that was once anchored at the Riviera Beach Marina was not a vessel. As Lozman has argued for years, the court ruled that the city shouldn’t have been able to seize it using centuries-old maritime law.

    The decision sets the stage for Lozman to return to court to seek damages against Riviera Beach for destroying his home, which he valued at more than $50,000. He said he will also ask the city to reimburse him for more than $300,000 in legal fees he spent since the fight began nearly seven years ago.

    “It’s an amazing day in my life,” said Lozman, who represented himself in the early stages of the legal battle. “Today is a day to celebrate that the legal process works. It shows if you’re a stubborn enough son of a b—— you can win. You have no idea what’s going through my mind. Just to actually get a reversal — it kind of blows your mind.”

    City officials were understandably less effusive about the decision. “We are disappointed with the Supreme Court’s ruling,” City Attorney Pamala Ryan said in a statement. “However, we respect and accept the decision, and we will abide by legal implications that flow from it.”

    Maritime lawyers, who have been watching the case closely, said the ramifications are potentially far-reaching. In deciding the case, the high court struck down lower court rulings(1) that turned on a simple concept that if it floats, it’s a boat.

    Writing for the majority, Justice Stephen Breyer said such an interpretation is overly broad. “Not every floating structure is a ‘vessel,’ ” Breyer wrote.

    To state the obvious, a wooden washtub, a plastic dishpan, a swimming platform on pontoons, a large fishing net, a door taken off its hinges or Pinocchio (when inside the whale) are not ‘vessels,’ even if they are ‘artificial contrivances’ capable of floating.”

    Instead, he wrote, the key is whether a “reasonable observer, looking to the home’s physical characteristics and activities, would consider it designed to a practical degree for carrying people or things over water.” Because Lozman’s strange craft had no engine, no steering ability and could neither generate nor store electricity it clearly was not designed as a means to transport people or cargo, he said.

    The test as outlined by Breyer, which came with a sharply worded dissent written by Justice Sonia Sotomayor and joined by Justice Anthony Kennedy, is likely to spur additional litigation, predicted Boca Raton attorney Michael McLeod, chairman of the Admiralty Law Committee for the Florida Bar.

    By midday, his email box was filling up with messages from attorneys across the nation who said they would be advising marinas, marine bankers and others they represent to review their operations in light of the ruling. It could arguably be a factor in the types of vessels allowed to dock at marinas and the types of non-traditional craft that are approved for maritime loans. It could also affect how creditors can recover unpaid bills.

    The distinction — what is and isn’t a vessel — is important because of laws that have developed since the nation’s founding to deal with the unique characteristics of boats, namely that they can be easily moved, leaving workers stranded or creditors unpaid. As a result, people have been given the power to “arrest” boats to recover debts. In some cases, that option may no longer be available.

    To illustrate the import of the case, dozens of groups, such as the National Marine Bankers Association, the American Gaming Association, the United Brotherhood of Carpenters and Joiners of America, and Floating Home Associations in Seattle and Sausalito, Calif., filed briefs.

    Even the U.S. Solicitor General chimed in. He worried that if the court found Lozman’s home was a boat, the U.S. Department of Homeland Security, the U.S. Coast Guard and myriad other federal agencies could be forced to change policies and possibly increase manpower to regulate and inspect floating structures that were never intended for navigation.

    Breyer acknowledged that the new test of what constitutes a boat isn’t exact. Admitting it is “neither perfectly precise nor always determinative, it is workable and consistent and should offer guidance in a significant number of borderline cases,” Breyer wrote.

    Sotomayor disagreed. In a 12-page dissent, she countered that the court muddied the waters. “In its haste to christen Lozman’s craft a non-vessel (the court) delivers an analysis that will confuse the lower courts and upset our longstanding admiralty precedent,” she wrote.

    Like McLeod, Lozman said the case’s legal questions are complex. His own legal path isn’t clear-cut. But, he said, he is prepared to do whatever he can to recover the money he lost simply because, he claims, the city wanted to silence him.

    The high court noted that lower courts forced Riviera Beach to post a $25,000 bond which Lozman could seize if he ultimately proved the city wrong. Ryan made no mention of the bond in her prepared statement Tuesday. Instead, she said, the city would reimburse Lozman the $300 he spent filing the case with the nation’s high court and pick up some of his printing costs. City spokesman William Jiles said city officials aren’t certain about the fate of the bond.

    Lozman said he’s not surprised the city isn’t ready to give up the fight.

    Vindictiveness has fueled the battle from the start, he said. Upset by his vociferous opposition to their failed plan to transform the poverty-wracked city into an upscale yachting community, Riviera Beach officials just wanted to get rid of him, he said. The easiest way was to use maritime law to tow his home out of the city.

    “To punish someone just because they’re a city activist, that’s not what America is all about,” he said. “Where does the city get off saying we’re just going to squash this guy?”

Ex-State AG's 11th Hour 'Sellout' Of Utah Homeowners In Foreclosure On Eve Of Joining Law Firm Representing BofA Not Binding On Successor In Future Cases

In Salt Lake City, Utah, The Salt Lake Tribune reports:
  • Despite former Attorney General Mark Shurtleff’s decision to personally sign onto a settlement in a foreclosure lawsuit that Bank of America seemed to be losing, his successor will continue to pursue other suits pending against the bank.

    It isn’t clear what new Attorney General John Swallow thinks about Shurtleff’s reversal of the state’s position in a suit brought by Holladay homeowners Timothy and Jennifer Bell that ReconTrust- — BofA’s foreclosure arm — illegally began foreclosure proceedings against their property when their $3 million loan went into default.

    But Shurtleff’s change of mind in the last weeks of his term disheartened lawyers in his office, which previously had intervened in the case as a plaintiff, arguing that ReconTrust had violated state law by carrying out foreclosures on its own instead of going through a Utah attorney or title company.

    "Mr. Shurtleff made the decision that he did. Not everyone in the office would agree to that, and people would come to different conclusions about whether or not the state should dismiss the case," assistant attorney general Thom Roberts said after a hearing Tuesday before U.S. District Judge Bruce Jenkins to decide whether the settlement between BofA and the Bells should be approved.

    Shurtleff’s about-face came some time between Dec. 17, when the Bells agreed to settle without support from the Attorney General’s office, and 11 days later when a BofA lawyer filed documents carrying Shurtleff’s signature to dismiss the case.

    Shurtleff’s term ended Jan. 7, and he will go to work for a law firm that regularly represents BofA. Shurtleff has said his new job had nothing to do with his decision, adding that he changed his mind because it made no sense for Utah to continue to be involved at taxpayer expense in a case that the Bells had settled.
For more, see Shurtleff’s BofA about-face won’t bind new A.G. (State intends to fight other foreclosure suits involving bank).

U.S. Army Dentist's Suit Accuses BofA Of Violating Sevicemember's Rights When Foreclosing On Her Home While On Active Duty

In Los Angeles, California, KNBC-TV Channel 4 reports:
  • For two years, U.S. Army reservist Diana Zschaschel has been fighting foreclosure against the West Los Angeles condo she shared with her husband, citing the Servicemembers Civil Relief Act, which protects active military personnel from financial hardship while on duty.

    Zschaschel and husband Paul Garcia have filed a lawsuit against Bank of America, which claims was exempt from abiding by the Servicemembers Civil Relief Act because Zschaschel wasn’t eligible for the protection at the time.
***
  • The Servicemembers Civil Relief Act protects active military personnel from financial hardship while on duty and specifically denies banks the ability to foreclose on a property during that time.

    Zschaschel said she's willing "to embarrass myself and expose my personal situation to help other people going through the same thing. Because it sucks."

    In a statement to NBC4, Bank of America said it checked Zschaschel’s status with the Department of Defense. Because she was in her two-week training, the bank said, the U.S. Army dentist was not considered active military and therefore she did not qualify for the benefits.

    An NBC4 investigation into the code found that "active duty" does include training, a point now under scrutiny in the lawsuit filed by Zschaschel against the bank.
For more, see Citing Federal Protection, Army Dentist Fights Foreclosure (U.S. Army reservist Diana Zschaschel has filed suit against Bank of America, which claims she was not eligible for federal protection while a foreclosure went through).