Another Federal Suit Implicating Constitutionality Of Colorado Foreclosure Law Surfaces; Despite Dismissal Of Entirety Of Complaint, Judge Says Inartful Pleading Was Nevertheless Good Enough To Grant Pro Se Homeowner A 'Do-Over'

In Denver, Colorado, The Denver Post reports:

• A second federal lawsuit contesting the constitutionality of Colorado's foreclosure laws has emerged.
  
  Unlike the case of an Aurora woman who obtained an interim federal injunction against the foreclosure auction of her house, the other involves a federal judge who decided a Denver man's 14th Amendment guarantee of due process was in question.
  
  U.S. District Judge Philip Brimmer last week dismissed the entirety of John Mbaku's complaint against Bank of America that challenged the bank's right to foreclose on his condominium.
  
  However, Brimmer determined there was a constitutional issue, though Mbaku didn't bring it up specifically.
  
  Because Mbaku, a law-school graduate who doesn't practice law, is representing himself, the judge is given wider latitude to read between the lines of a complaint since plaintiffs might not be as sophisticated or well-versed in the complexities of law.(1)
  
  In the introduction to his lawsuit filed last year, Mbaku noted how Colorado law allows a bank or lender to foreclose without showing how it obtained ownership of the loan.
  
  More important, because loan ownership is determined by who has possession of the document — known as indorsement in blank — Mbaku said anyone could come by that right, even a thief.
  
  "Plaintiffs could illegally obtain or otherwise steal a promissory note ... from any bank ... and present themselves at a ... hearing and be deemed ... to be the proper party to foreclose," Mbaku wrote.
  
  Brimmer thought that was enough to keep the lawsuit alive.
  
  The state hearing Mbaku is challenging is called a Rule 120 for the civil procedure that governs it. Brimmer liberally read the complaint and decided Mbaku's introduction was enough to merit attention. And because Bank of America didn't address it in a motion to dismiss, Brimmer let it stand.
  
  The judge on Thursday advised Colorado Attorney General John Suthers that a state law was under constitutional review and that Suthers has 60 days to respond.

For the story, see Second federal suit challenging Colorado foreclosure law emerges.

(1) For a couple of the many Federal court rulings mandating that trial judges cut pro se litigants a considerable amount of slack when hearing their cases, see:

Haines v. Kerner, 404 U.S. 519 (1972), in which the U.S. Supreme Court reversed the rulings of two lower courts, the court stated:

• The only issue now before us is petitioner's contention that the District Court erred in dismissing his pro se complaint without allowing him to present evidence on his claims.
  
  Whatever may be the limits on the scope of inquiry of courts into the internal administration of prisons, allegations such as those asserted by petitioner, however inartfully pleaded, are sufficient to call for the opportunity to offer supporting evidence. We cannot say with assurance that under the allegations of the pro se complaint, which we hold to less stringent standards than formal pleadings drafted by lawyers, it appears 'beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.' Conley v. Gibson, 355 U.S. 41, 45—46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). See Dioguardi v. Durning, 139 F.2d 774 (CA2 1944).
  
  Accordingly, although we intimate no view whatever on the merits of petitioner's allegations, we conclude that he is entitled to an opportunity to offer proof. The judgment is reversed and the case is remanded for further proceedings consistent herewith.

Platsky v. Central Intelligence Agency, 953 F.2d 26 (2d Cir. 1991), in which a Federal Appeals Court ruled:

• Pro se plaintiffs are often unfamiliar with the formalities of pleading requirements. Recognizing this, the Supreme Court has instructed the district courts to construe pro se complaints liberally and to apply a more flexible standard in determining the sufficiency of a pro se complaint than they would in reviewing a pleading submitted by counsel. See e.g., Hughes v. Rowe, 449 U.S. 5, 9-10, 101 S.Ct. 173, 175-76, 66 L.Ed.2d 163 (1980) (per curiam); Haines v. Kerner, 404 U.S. 519, 520-21, 92 S.Ct. 594, 595-96, 30 L.Ed.2d 652 (1972) (per curiam); see also Elliott v. Bronson, 872 F.2d 20, 21 (2d Cir.1989) (per curiam). In order to justify the dismissal of a pro se complaint, it must be " 'beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.' " Haines v. Kerner, 404 U.S. at 521, 92 S.Ct. at 594 (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)).
  
  In light of these principles, we think that the district court should not have dismissed Platsky's complaints without affording him leave to replead.

***

• The district court also dismissed the complaints for their failure to plead facts that were sufficiently specific. The district judge held that Platsky failed to allege the concrete and particularized injury required to establish standing and to state a claim upon which relief could be granted.

***

• We think that Platsky should have a chance to state his claim more clearly. It is not "'beyond doubt that the plaintiff can prove no set of facts in support of his claim[s],' " Haines v. Kerner, 404 U.S. at 521, 92 S.Ct. at 595, and therefore we hold that the better course would have been for the district court, in dismissing Platsky's pro se complaints, to grant him leave to file amended pleadings. See Elliott v. Bronson, 872 F.2d at 22. We have instructed Platsky that his complaint must set out, with particularity and specificity, the actual harms he suffered as a result of the defendants' clearly defined acts.
  
  Accordingly, we vacate the judgment and order below, and remand the case to the district court with instructions to allow the plaintiff to replead.

See also Estelle v. Gamble, 429 U.S. 97 (1976), which supports the mandate that trial judges cut pro se homeowners slack when bringing their cases:

• The handwritten pro se document is to be liberally construed. As the Court unanimously held in Haines v. Kerner, 404 U.S. 519 (1972), a pro se complaint, "however inartfully pleaded," must be held to "less stringent standards than formal pleadings drafted by lawyers" and can only be dismissed for failure to state a claim if it appears "`beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Id., at 520-521, quoting Conley v. Gibson, 355 U.S. 41, 45 -46 (1957). [429 U.S. 97, 107]

Loan Officer Gets 42 Months For Role In Scam That Included Identity Theft In Connection With Processing Mortgage Applications; Suspect Sold His Own Home To One Unwitting Victim For A $320K Profit; Another Swindled Victim Took $193K+ Hit

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

• Kenneth H. DiPasquale, 38, of Morgantown, W. Va., was sentenced [] to 42 months in prison, followed by three years of supervised release, for his role in a series of fraudulent mortgage loan transactions, including one in which he stole an individual’s identity and “sold” that individual his home for a nearly $320,000 profit. DiPasquale was also ordered to pay a total of $3,354,773 in restitution to his victims and to forfeit $529,098 in proceeds from his crimes.

***

• According to court records, DiPasquale was employed in 2007 as a loan officer at Landover, Md., mortgage lender Citywide Mortgage. DiPasquale used that position to process loans based on false and fraudulent information, including for borrowers who had not applied for loans and who had no idea their names and identities had been used as borrowers in the transactions.
  
  In particular, DiPasquale processed fraudulent loans in exchange for kickbacks from a co-conspirator. When he had trouble selling his own home in Bowie, Md., in October 2007, he stole the identity of an individual living in Arlington, Va., and “sold” this victim his house at a nearly $320,000 profit.
  
  He also engineered a series of transactions involving a homeowner in Hyattsville, Md., whom he swindled out of over $193,000.
  
  Co-conspirator Nadin Samnang, a former Virginia realtor and title company owner, was convicted of mortgage fraud-related charges following a trial in April 2012 and was sentenced to 84 months in prison.
  
  Co-defendant Lyle C. Williams pleaded guilty to conspiracy and identity theft charges in November 2012 and was sentenced to 18 months in prison.

For the U.S. Attorney press release, see Former Maryland Loan Officer Sentenced To 42 Months In Prison For Mortgage Fraud And Identity Theft.

C. Florida R/E Operator Lacks Needed Cash To Take Prosecutor Up On 'Jail Time Buy Out" Offer; Gets 36 Months For Duping Homeowners In Foreclosure To Sign Over Their Deeds, Then Pocketing Cash By Selling/Renting To Unwitting Victims Without Paying Existing Liens

In Brooksville, Florida, the Tampa Bay Times reports:

• Gaetano Antonelli promised to make dreams come true by selling foreclosed homes to buyers with bad credit.
  
  The problem, prosecutors say: Antonelli didn't own the homes, and in some cases the buyers didn't realize that until after they had moved in and made renovations.
  
  On Thursday, the 63-year-old pleaded no contest to fraud and selling real estate without a license. He was sentenced to 36 months in prison, with credit for time served since November. As part of a plea agreement, Circuit Judge Daniel B. Merritt Jr. ordered Antonelli to pay five victims a total of $40,667 in restitution. Payments owed to a sixth victim who recently died would have brought the total to nearly $50,000, Assistant State Attorney Mark Simpson said.(1)
  
  If convicted at trial on both counts, Antonelli faced up to 20 years in prison.
  
  Simpson said it's unclear if Antonelli has the money to pay restitution. During plea negotiations, however, Simpson offered to seek a more lenient sentence if Antonelli came up with money to repay the victims. When he didn't, Simpson pushed for the prison term. "This wasn't somebody who just found a bag of money that fell of a Wells Fargo truck and made a mistake," he said. "This is somebody who systematically went out and started doing this to folks knowing he had no right to do so."
  
  Investigators say Antonelli found homeowners facing foreclosure, telling them he could relieve them of their mortgages by suing their mortgage company. He 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. Then he listed the houses for sale on Craigslist without the knowledge of the homeowners.
  
  But Antonelli's scheme was based on a false premise: Once the foreclosure process begins, as it had in these cases, the owner has no legal right to sign over the deed. Antonelli later told Hernando Sheriff's detectives that he had the right to sue banks and mortgage companies because mortgages are not legally binding contracts.

For the story, see Man gets 36 months for selling homes he didn't own.

(1) Did death disentitle this scam victim (or more specifically, this scam victim's estate) from receiving restitution?

Pair Peddling Nationwide "Walk Away Today" Foreclosure Rescue Racket Admit Scheme Was Nothing More Than Giant Rent Skimming Operation That Reaped Million$; 100s Of Duped Homeowners Signed Over Deeds; Perpetrators Then Pocketed Cash From Subsequent Tenants While Filing Phony HAMP Loan Mod Requests To Prolong Stiffing Lenders Out Of House Payments

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

• Mark S. Farhood, 49, formerly of San Diego, Cal., and Jason S. Sant, 37, of Lecanto, Fla., pleaded guilty [] to conspiracy charges in connection with their operation of a nationwide online foreclosure rescue scam that went by various names, including Home Advocate Trustees and Walk Away Today, and used various web sites, including walkawaytoday.org and sellfastusa.com, to deceive hundreds of vulnerable, distressed homeowners into surrendering their properties to the company.

***

• According to court records, Farhood and Sant co-owned Home Advocate Trustees, which also went by the names Walk Away Today, First Equity Trustees, Home Security Consultants, Sell Fast USA, Short Sale Buyer, USA Sell House Fast, and USA Rental Housing. They marketed the businesses nationwide as purchasers of distressed real estate and a means by which vulnerable homeowners could avoid foreclosure and the accompanying negative effects on their credit.
  
  The companies told homeowners they were in the business of negotiating with lenders to purchase mortgage notes at a discount and falsely claimed to have been in business for seventeen years, to have experienced a 90% success rate in purchasing such notes, and to be the nation’s largest volume buyer of short sale and over-leveraged real estate.
  
  As Sant and Farhood admitted in connection with their pleas, the businesses were a fraud, no such negotiations with lenders ever took place, and the scheme was merely a way for them to take possession of hundreds of residential properties, including homes within the Eastern District of Virginia, at virtually no cost and then reap millions of dollars in profits by renting the homes to unsuspecting tenants.
  
  Farhood and Sant further admitted that as part of the scheme, they submitted fraudulent loan modification applications to mortgage lenders under the U.S. Department of the Treasury’s Home Affordable Modification Program (“HAMP”) in the name of homeowners, without the homeowners’ knowledge or consent.
  
  Farhood and Sant used the fraudulent applications to stall foreclosures on the properties under their control and for which no mortgage payments were being made and to maximize the time period during which they could collect rental income.

For the U.S. Attorney press release, see Two Perpetrators Of Nationwide Foreclosure Rescue Scam - Walkawaytoday.Org - Plead Guilty.

SC Appeals Court Reinstates Criminal Charges Against Sale Leaseback Peddler; Continuing To Prosecute Scammer After Earlier Contempt Convictions In Same Case Not Double Jeopardy

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

• Appeals court orders new trial for man in scam that targeted homeowners facing foreclosure
  
  Robert Steve Jolly, who operated an illegal foreclosure rescue scam through his Socastee-based Jolly & Associates, will face another trial on charges that he obtained clients’ property under false pretenses, the S.C. Court of Appeals ruled on Wednesday.
  
  The court reversed an earlier ruling by Judge Benjamin Culbertson, who in 2011 dismissed two of five felony charges that Jolly obtained property under false pretenses. Culbertson said in his ruling that prosecuting Jolly on the two charges would amount to double jeopardy because Jolly previously had been found guilty of contempt of court related to foreclosure actions in those two cases.
  
  The appeals court said the contempt charges were separate and different from the fraud charges, even though all of the charges stemmed from the same activity, clearing the way for another trial.(1)
  
  Jolly, 64, was convicted during a jury trial of the other three charges of obtaining property under false pretenses. He is serving a 10-year prison sentence at MacDougall Correctional Institution in Ridgeville. The appeals court dismissed Jolly’s appeal of those convictions earlier this year.
  
  No new trial date has been scheduled for the two felony charges Jolly still faces.
  
  Court documents show Jolly targeted home owners who were in danger of defaulting on their mortgages, saying he could save their homes if they would sign the properties over to him through a quit-claim deed. Jolly told the home owners that he would pay off their mortgages once they transferred the property. He also told the home owners to submit future mortgage payments to him instead of the original mortgage holder.
  
  Jolly never paid the mortgages and kept the money for himself, causing foreclosure lawsuits to be filed against at least 45 of his clients. Once the properties were in foreclosure, Jolly filed multiple frivolous actions in the cases to stall the lawsuits, according to court documents. Jolly’s filings created such a backlog of cases that Judge Michael Baxley was assigned to clear them.
  
  Baxley eventually voided all of the quit-claim deeds Jolly had filed and issued an order holding Jolly in criminal contempt of court. In his order, Baxley said Jolly’s actions through court filings and during hearings exhibited disrespect for the court and hampered witnesses and “were calculated to obstruct, degrade and undermine the administration of justice.” Jolly was sentenced to six months in jail on the contempt charge.

For the story, see Appeals court orders new trial for Myrtle Beach area man convicted in foreclosure rescue scam.

For the ruling, see State v. Jolly, No. 2011-190688 (SC App. May 8, 2013).

(1) A short excerpt from the court's ruling:

• The State argues the trial court erred in dismissing two indictments for obtaining property by false pretenses based on double jeopardy because the elements of obtaining property by false pretenses were distinctly different from the elements of criminal contempt and each required a proof of fact the other did not. We agree.

***

• "A defendant may be severally indicted and punished for separate offenses without being placed in double jeopardy where a single act consists of two distinct offenses." Brandt, 393 S.C. at 538, 713 S.E.2d at 597 (internal quotation marks omitted).

BofA Feels Sharp Teeth Of Newly-Minted California Homeowner Bill Of Rights; Borrower's Successful Arguments In Scoring Injunction Could Cost Bankster Upwards Of $60K In Legal Fees & Costs Alone

Housing Wire reports:

• A California man successfully halted a foreclosure sale on his property using the newly minted California Homeowner Bill of Rights to obtain a court injunction against two foreclosing parties: Bank of America and its ReconTrust Co. subsidiary.
  
  For simply obtaining the HBOR injunction, the homeowner’s attorney is requesting $20,255 in legal fees and costs – a compensation request that is permissible under HBOR since the legislation allots borrowers reasonable attorneys fees and expenses for successfully obtaining an injunction.
  
  Attorney Robert Jackson with Jackson and Associates out of California says the injunction alone may cost BofA/Recontrust upwards of $60,000 when calculating in attorneys fees and expenses from both sides.
  
  "The biggest problem with the HBOR from the investor standpoint is the litigation risk of having to pay legal fees," Jackson said. "The way the thing breaks down is when you get an injunction, the prevailing borrower gets all of their legal fees paid by the servicer and the investor."
  
  This is one of the first legal disputes to show the real strength of HBOR and it’s effectiveness in stalling proceedings and increasing expenses for servicers that are accused of violating one of the provisions of HBOR.
  
  Jackson has spent months warning servicers about the hidden litigation expenses facing firms when they pursue nonjudicial foreclosures in an HBOR world.
  
  The new case in question – Singh v. Bank of America (Recontrust Co.) – was filed by a borrower who accused BofA and Recontrust of violating HBOR’s ban on dual-tracking.
  
  Singh claimed the bank failed to respond to his request for a loan mod before filing for a foreclosure sale.
  
  Using the HBOR provision against dual-tracking, Singh filed suit in the U.S. Eastern District of California, requesting injunctive relief to prevent the sale of his home during the pending dispute.
  
  The court granted his motion and even noted the California Homeowner Bill of Rights "offers homeowners greater protection during the foreclosure process."
  
  In evaluating HBOR and the plaintiff’s allegations, the court said the homeowner "has adequately shown he is likely to succeed on the merits in light of California’s new Homeowner Bill of Rights."
  
  The court granted the injunction, which is loaded with potential attorneys fees.
  
  If you add in the bank's own attorney fees, the injunction alone could carry a $60,000 price tag, Jackson estimates.
  
  "They now have to file an answer to this thing, and they have to produce evidence showing they are in compliance before this case can go on," he added.
  
  Not to mention, the bank is now subject to discovery – with those costs possibly running the financial firm another $50,000 at least, Jackson said.
  
  The servicer also will have to pay legal fees and expenses to make a factual showing to set aside the injunction, which could be another $50,000 to $60,000 in legal expenses, Jackson suggested.
  
  Meanwhile, the property in question has an online estimate of around $273,000, the veteran real estate attorney pointed out. So when you assess legal fees long-term, servicers could face $100,000 or more in legal expenses on a property not worth much more.
  
  Jackson predicted early on that more servicers and investors would file judicial foreclosures, fearing litigation expenses stemming from HBOR. He believes the $20,000 in automatic attorneys fees for a successful injunction alone is proof of a legal landmine.
  
  "This is just one motion that was granted," he said.
  
  "Under HBOR, the injunction is in place until Bank of America proves that it didn’t violate the HBOR to the satisfaction of the court. They have to file an answer to this thing, and they have to produce evidence that they are in compliance before this case can go on," Jackson concluded.

Source: California Homeowner Bill of Rights blocks BofA foreclosure.

Thanks to Deontos for the heads-up on the story.

Nebraska Supremes: Special 3-Month Statute Of Limitations When Seeking Deficiency Judgments Applies Only To Non-Judicial Foreclosures; Lenders That Go To Court Seeking Trust Deed Enforcement Get Five Years To Initiate Deficiency Proceedings

From Justia.com US Law:

• Defendants gave a promissory note to Bank and secured a loan with a trust deed on real property. Defendants defaulted on the note, and Bank initiated foreclosure proceedings. The property was sold after a sheriff's sale. Bank subsequently filed a complaint to recover the deficiency.
  
  The district court granted Defendants' motion for summary judgment, holding that because Bank filed its complaint ninety-nine days after the sheriff's sale, the action was barred by the three-month statute of limitations in Neb. Rev. Stat. 76-1013.
  
  The Supreme Court reversed, holding (1) the special three-month statute of limitations on actions for deficiency set forth in the Nebraska Trust Deeds Act applies where a lender elects to judicially foreclose upon the real estate, but the special limitation applies only where the property has been sold by exercising the power of sale set forth in the trust deed; and (2) because the judicial foreclosure of the trust deed in this case did not result in the sale of property under a trust deed, it did not fall under the statutory language in section 76-1013, and the deficiency action was governed by the general statute of limitations for actions on written contracts.(1) Remanded.

Source: Opinion Summary - First Nat'l Bank of Omaha v. Davey.

For the court ruling, see First Nat'l Bank of Omaha v. Davey, 285 Neb 835 (Neb. May 3, 2013).

(1) Excerpts from the court ruling's Introduction and Conclusion:

• In this appeal, we must determine whether the special 3-month statute of limitations on actions for deficiency set forth in the Nebraska Trust Deeds Act (Act)[1] applies where a lender elects to judicially foreclose upon the real estate. We conclude that the special limitation applies only where the property has been sold by exercising the power of sale set forth in the trust deed.
  
  As we will explain, our conclusion follows from our previous decisions under the Act, is faithful to the plain language of the statute, avoids absurd results, and is consistent with decisions in other states. We therefore reverse the contrary decision of the district court.

***

• Based on a previous interpretation by this court, we conclude that the statute of limitations in § 76-1013 applies only to deficiency actions filed after the exercise of the power of sale provided in a trust deed.
  
  A deficiency action brought following the judicial foreclosure of a trust deed is governed by the general 5-year statute of limitations for actions on written contracts in § 25-205.
  
  Because First National's deficiency action was brought within 5 years of the judicial sale of the real property, the district court erred in granting the Daveys' motion for summary judgment on the ground that the action was barred as untimely. Accordingly, we reverse the judgment and remand the cause for further proceedings consistent with this opinion.

Nevada Supremes: Little Downside For Banksters Engaging In Mediation-Associated Bad Faith; Trial Judge's Failure To Impose Loan Modification OK; Well Within Court's Discretion To Limit Lender Sanctions To Simply Withholding FMP Certificate & Granting $3,500 In Homeowner Attorney's Fees

From Justia.com US Law:

• Homeowner attended a first Foreclosure Mediation Program (FMP) mediation with Citimortgage, after which Defendant was denied a loan modification. The district court subsequently ordered a second mediation.
  
  PennyMac Corp. later obtained beneficial interest in the deed of trust and promissory note and attended the second mediation.
  
  The mediator determined that PennyMac failed to bring the promissory note, deed of trust, and other documents to the mediation and that PennyMac's representative lacked authority to negotiate.
  
  Homeowner filed a petition for judicial review, requesting sanctions, attorney fees, and a judicially imposed loan modification.
  
  The district court imposed sanctions against PennyMac but declined to impose a loan modification or monetary sanctions beyond the amount of attorney fees.
  
  The Supreme Court affirmed, holding (1) Homeowner had standing to challenge the district court's order on appeal; and (2) the district court acted within its discretion in denying an FMP certificate and in determining sanctions.(1)

Source: Opinion Summary - Jacinto v. PennyMac Corp.

For the court ruling, see Jacinto v. PennyMac Corp., 129 Nev. Advance Opinion 32 (May 2, 2013).

(1) From the Nevada Supreme Court ruling:

• A deed of trust beneficiary seeking an FMP certificate must attend the mediation, participate in good faith, bring the required documents, and if attending through a representative, the representative must have authority to modify the loan or have access at all times to such a person. NRS 107.086(4), (5); Leyva, 127 Nev. at ___, 255 P.3d at 1279.
  
  If the district court finds noncompliance with these requirements, the bare minimum sanction is that an FMP certificate must not issue. Holt v. Reg'l Tr. Servs. Corp., 127 Nev. ___, ___, 266 P.3d 602, 607 (2011). In the absence of factual or legal error, the choice of any further sanctions in addition to withholding the FMP certificate is committed to the district court's sound discretion. Pasillas v. HSBC Bank USA, 127 Nev. ___, ___, 255 P.3d 1281, 1287 (2011).
  
  In Pasillas, we set forth a nonexhaustive list of factors for the district court to consider in weighing the appropriate sanctions to impose when a party has violated the FMP requirements. 127 Nev. at ___, 255 P.3d at 1287.
  
  Relevant to this matter is "whether the violations were intentional, the amount of prejudice to the nonviolating party, and the violating party's willingness to mitigate any harm by continuing meaningful negotiation." Id.
  
  Here, the district court found that PennyMac violated NRS 107.086(4) by failing to bring certified copies of the promissory note and deed of trust, although it did provide noncertified copies, and the district court found that PennyMac failed to provide an appraisal, violating FMR 11's document-production requirements. The court further concluded, consistent with the mediator's findings, that PennyMac's representative lacked sufficient authority to negotiate a modification. The district court found that PennyMac was a flagrant violator of the document-production requirements, and concluded that PennyMac had participated in the FMP process in bad faith.
  
  It therefore granted Jacinto's petition for judicial review, denied an FMP certificate, and imposed additional sanctions of $3,500, which represented the attorney fees incurred by Jacinto for the second mediation and hearing on the petition for judicial review, but the district court denied Jacinto's request for a loan modification.
  
  Having reviewed the record and considered the parties' arguments, we conclude that the district court made sufficient findings and conclusions, it properly considered the nonexhaustive Pasillas factors, and it acted within its sound discretion in determining the amount and nature of sanctions. Pasillas, 127 Nev. at ___, 255 P.3d at 1286-87.
  
  The district court found that PennyMac acted in bad faith and violated the document-production requirements. Based on those findings, it ordered the FMP certificate withheld as required, but it also imposed monetary sanctions against PennyMac, thus imposing more than the minimum sanction. Holt, 127 Nev. at ___, 266 P.3d at 607.
  
  We perceive no abuse of discretion with regard to the district court's decision to decline Jacinto's request for the imposition of a loan modification or with regard to the amount of monetary sanctions imposed against PennyMac. Pasillas, 127 Nev. at ___, 255 P.3d at 1286-87.

State AG's Claims That Bankster Abused Probate Process To Name Itself Personal Representative Of At Least 25 Dead Homeowners' Estates To Screw Heirs & Fast-Track Foreclosures Gets Nowhere; Agrees To Accept $140K Settlement Along With Servicer's Promise To Never Do It Again In NM

From the Office of the New Mexico Attorney General:

• Attorney General Gary King [] announced a settlement with Green Tree Servicing, a major lender and servicer of consumer loans, resolving claims that Green Tree abused the probate process to fast-track foreclosures against the estates and families of deceased homeowners in New Mexico.
  
  AG King alleges that in at least twenty-five (25) cases in New Mexico, Green Tree became the personal representative of a deceased homeowner’s estate in order to quickly complete a foreclosure against the home of the deceased consumer. As part of the settlement, Green Tree agreed to never again be appointed as the personal representative of a homeowner’s estate in New Mexico.
  
  The AG alleges that Green Tree would file documents in court stating that it was unaware of any heirs with legal priority over Green Tree when, in some cases, Green Tree clearly knew that a surviving spouse or children existed and could be located. The Attorney General’s Complaint asserts that such false statements to the court were misrepresentations in the collection of a debt in violation of the Unfair Practices Act.
  
  As a result of the unlawful acts, AG King alleges that Green Tree would complete the foreclosure without giving the lawful heirs an opportunity to save the home or to defend the foreclosure case. Green Tree would then sell the home and pay itself the proceeds.
  
  Green Tree agreed to pay $140,000.00 to the Attorney General to resolve the claims. The funds will be used for consumer protection enforcement and education. The parties agreed to the settlement terms in a Consent Decree that must be approved by the Court.
  
  Green Tree denies that it engaged in unlawful conduct. The claims settled by the proposed Consent Decree are allegations only, and liability was not determined in a trial.

For the New Mexico AG press release, see Mortgage Lender Accused of Foreclosing on Deceased (AG Stops Practice by Green Tree Servicing In New Mexico).

Sleazy Bankster Backs Down When Confronted On Use Of Dubious Foreclosure Paperwork; Abruptly Withdraws Action In Apparent Attempt To Dodge Pro Se Homeowner's Constitutional Challenge To Provision In Colorado Foreclosure Law By Rendering The Controversy Moot

In Denver, Colorado, The Denver Post reports:

• US Bank on Friday backed down from its efforts to foreclose on an Aurora woman whose federal court battle against it has taken on the constitutionality of Colorado's foreclosure laws.
  
  Just days after lawyers for the bank told a federal judge they've always had the original documents necessary to foreclose on Lisa Kay Brumfiel's tri-level house legally — and U.S. District Judge William J. Martínez said to produce them — the bank rescinded the whole thing.
  
  Despite the move to make a nearly two-year nightmare to save her house go away, Brumfiel on Friday insisted she's pressing on.
  
  "I would rather risk losing my house again than to selfishly watch this corrupt process continue for others," said Brumfiel, a 43-year-old part-time saleswoman who took on the court battles without a lawyer. "I know too much, and I don't want the blood of it on my hands."
  
  But the ultimate decision might now be out of her hands.
  
  US Bank on Friday told the Arapahoe County public trustee to withdraw the foreclosure case it filed in September 2011, then filed a request with Arapahoe County District Court Judge J. Mark Hannen to dismiss the order he signed last December to sell Brumfiel's house.
  
  Closing the foreclosure case is automatic. The motion to the judge is not.
  
  The bank's move could be a tactical one, legal experts said, designed to make not just Brumfiel's foreclosure go away, but her federal lawsuit, too.
  
  Theoretically, US Bank could get Hannen to dismiss his order — whether Brumfiel agrees or not — and then ask for the federal case to be dismissed. Should Martínez agree, the bank could start a new foreclosure case against Brumfiel, forcing her into a whole new cycle of court battles.
  
  But Martínez could also choose to ignore the request and move ahead with Brumfiel's claim that Colorado foreclosure law violates her constitutional right to due process.
  
  Brumfiel's federal lawsuit initially sought to enjoin the county foreclosure sale of her house. To obtain that, Brumfiel must first prove she's in danger of imminent harm if the sale occurred.
  
  Martínez issued an interim preliminary injunction Monday and scheduled a hearing for Wednesday. But with no foreclosure, there might be no case.
  
  "It's a tactic that would allow you to argue there's no longer any immediate harm because there's no longer a foreclosure," Keith Gantenbein, a foreclosure lawyer not involved in the case, said of the bank move to rescind.
  
  "But then you turn right around and file again, forcing the homeowner to go through it all for another two years. It's designed to wear you down," he said. "Sadly, it happens a fair bit." Attorneys for the bank refused to comment.(1)

***

• In an order filed Thursday, Martínez told US Bank that he wanted to see original endorsements on the note and deed of trust by Friday. Endorsements are the signatures that appear on the back of the documents showing the chain of ownership.
  
  The bank told the court Friday that it had only the blank undated indorsement on the loan from First Franklin.

For the story, see US Bank walks away from foreclosure on Aurora woman.

See also, Banks' right to foreclose in dispute (The bank foreclosing on an Aurora woman challenging the constitutionality of Colorado's foreclosure laws did not formally own the right to take her house until a month after it filed its case to do so, public real-estate records reviewed by The Denver Post show).

(1) It appears that by rescinding the foreclosure, the bankster is attempting rendered moot the homeowner's Constitutional challenge to the relevant provision in the Colorado foreclosure law at issue. If so, the bankster could then argue that no actual case or justiciable controversy is left to be decided and, consequently, would ostensibly leave the federal court without jurisdiction to hear the case. To go forward and hear the case at this point may lead to a judicial pronouncement that does not affect the rights of the litigants in the case before it, but merely represents an impermissible advisory opinion.

See, for example, North Carolina v. Rice, 404 U.S. 244 (1971), in which the U.S. Supreme Court made this observation in this regard:

• Early in its history, this Court held that it had no power to issue advisory opinions, Hayburn's Case, 2 Dall. 409 (1792), as interpreted in Muskrat v. United States, 219 U. S. 346, 351-353 (1911), and it has frequently repeated that federal courts are without power to decide questions that cannot affect the rights of litigants in the case before them. Oil Workers Unions v. Missouri, 361 U. S. 363, 367 (1960).
  
  To be cognizable in a federal court, a suit "must be definite and concrete, touching the legal relations of parties having adverse legal interests. . . . It must be a real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts." Aetna Life Ins. Co. v. Haworth, 300 U. S. 227, 240-241 (1937).
  
  However, "[m]oot questions require no answer." Missouri, Kansas & Texas R. Co. v. Ferris, 179 U. S. 602, 606 (1900). Mootness is a jurisdictional question because the Court "is not empowered to decide moot questions or abstract propositions," United States v. Alaska S. S. Co., 253 U. S. 113, 116 (1920), quoting California v. San Pablo & Tulare R. Co., 149 U. S. 308, 314 (1893); our impotence "to review moot cases derives from the requirement of Article III of the Constitution under which the exercise of judicial power depends upon the existence of a case or controversy." Liner v. Jafco, Inc., 375 U. S. 301, 306 n. 3 (1964). See also Powell v. McCormack, 395 U. S. 486, 496 n. 7 (1969).
  
  Even in cases arising in the state courts, the question of mootness is a federal one which a federal court must resolve before it assumes jurisdiction. Henry v. Mississippi, 379 U. S. 443, 447 (1965). Liner v. Jafco, Inc., supra, at 304.

---------------------------------------------

On the other hand, if it can be demonstrated that the bankster's withdrawal of the foreclosure is nothing more than a blatant attempt to abort the homeowner's challenge to the bankster's allegedly illegal or unconstitutional conduct and thereby evade judicial review, the case may not be considered moot.

In United States v. WT Grant Co., 345 US 629 (1953), the U.S Supreme Court made these comments in this regard:

• Both sides agree to the abstract proposition that voluntary cessation of allegedly illegal conduct does not deprive the tribunal of power to hear and determine the case, i. e., does not make the case moot. United States v. Trans-Missouri Freight Assn., 166 U. S. 290 (1897); Walling v. Helmerich & Payne, Inc., 323 U. S. 37 (1944); Hecht Co. v. Bowles, 321 U. S. 321 (1944).
  
  A controversy may remain to be settled in such circumstances, United States v. Aluminum Co. of America, 148 F. 2d 416, 448 (1945), e. g., a dispute over the legality of the challenged practices. Walling v. Helmerich & Payne, Inc., supra; Carpenters Union v. Labor Board, 341 U. S. 707, 715 (1951).
  
  The defendant is free to return to his old ways.[4] This, together with a public interest in having the legality of the practices settled, militates against a mootness conclusion. United States v. Trans-Missouri Freight Assn., supra, at 309, 310.
  
  For to say that the case has become moot means that the defendant is entitled to a dismissal as a matter of right, Labor Board v. General Motors Corp., 179 F. 2d 221 (1950). The courts have rightly refused to grant defendants such a powerful weapon against public law enforcement.[5]
  
  The case may nevertheless be moot if the defendant can demonstrate that "there is no reasonable expectation that the wrong will be repeated."[6] The burden is a heavy one. Here the defendants told the court that the interlocks no longer existed and disclaimed any intention to revive them. Such a profession does not suffice to make a case moot although it is one of the factors to be considered in determining the appropriateness of granting an injunction against the now-discontinued acts.
  
  Along with its power to hear the case, the court's power to grant injunctive relief survives discontinuance of the illegal conduct. Hecht Co. v. Bowles, supra; Goshen Mfg. Co. v. Myers Mfg. Co., 242 U. S. 202 (1916).
  
  The purpose of an injunction is to prevent future violations, Swift & Co. v. United States, 276 U. S. 311, 326 (1928), and, of course, it can be utilized even without a showing of past wrongs. But the moving party must satisfy the court that relief is needed. The necessary determination is that there exists some cognizable danger of recurrent violation, something more than the mere possibility which serves to keep the case alive.

See also, ACLUM v. Conference of Catholic Bishops, 705 F. 3d 44 (1st Cir. January 15, 2013) (discussing the 'voluntary cessation doctrine'  which provides for an exception to mootness):

• The voluntary cessation exception "traces to the principle that a party should not be able to evade judicial review, or to defeat a judgment, by temporarily altering questionable behavior." City News & Novelty, Inc. v. City of Waukesha, 531 U.S. 278, 284 n. 1, 121 S.Ct. 743, 148 L.Ed.2d 757 (2001).
  
  This is to avoid a manipulative litigant immunizing itself from suit indefinitely, altering its behavior long enough to secure a dismissal and then reinstating it immediately after. See Already, LLC v. Nike, Inc., ___ U.S. ___, ___, 133 S.Ct. 721, ___ L.Ed.2d ___, 2013 WL 85300, No. 11-982, slip op. at 4 (U.S. Jan. 9, 2013); Brown, 613 F.3d at 49; see also United States v. W.T. Grant Co., 345 U.S. 629, 632, 73 S.Ct. 894, 97 L.Ed. 1303 (1953) (noting that if a court declares the case moot, "[t]he defendant is free to return to his old ways").
  
  As the Supreme Court stated last term, "[s]uch ... maneuvers designed to insulate a decision from review ... must be viewed with a critical eye" and, as a result, "[t]he voluntary cessation of challenged conduct does not ordinarily render a case moot." Knox v. Serv. Emps. Int'l Union, Local 1000, ___ U.S. ___, 132 S.Ct. 2277, 2287, 183 L.Ed.2d 281 (2012) (citation omitted).
  
  However, even in circumstances where the voluntary cessation exception applies, a case may still be found moot if the defendant meets "the formidable burden[[9]] of showing that it is absolutely clear the allegedly wrongful behavior could not reasonably be expected to recur." Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 190, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (citing United States v. Concentrated Phosphate Exp. Ass'n, Inc., 393 U.S. 199, 203, 89 S.Ct. 361, 21 L.Ed.2d 344 (1968)); Parents Involved in Cmty. Sch. v. Seattle Sch. Dist. No. 1, 551 U.S. 701, 720, 127 S.Ct. 2738, 168 L.Ed.2d 508 (2007).

Go here for links to other cases discussing the stringent test in determining mootness in cases where the party alleged to have engaged in illegal conduct voluntarily ceases said conduct under threat of a pending lawsuit.

Ex- Homeowner Who Lost Home To Foreclosure Nearly 20 Years Ago Discovers He May Be Victim Of Recently-Revealed NYC Surplus-Snatching Scam

In Brooklyn, New York, WNYC News reports:

• William Easterling and his wife used to own 165 Forbell Street, a two-family home in Brooklyn on the border of Cypress Hills and Ozone Park. The couple raised their four kids there. But they haven’t lived there in almost 20 years.
  
  Easterling had been violently mugged on his way to work in 1992 and his wife said, "enough." They moved. But his troubles didn't end there. He had to file for bankruptcy and was forced to surrender the Brooklyn property.
  
  What he didn't know was that his old property was listed in the indictment against Senator John Sampson, who's accused of keeping money that came from the foreclosure sale.
  
  He also didn’t know that years ago he may have had a right to claim some of the $80,000 Sampson reported from the sale of 165 Forbell Street.
  
  “Otherwise I would have the attorney looking into it with all the money I had to spend, plus with the money I lost in the home,” he said. “But I had no idea, no.”
  
  Sampson is accused of embezzling $440,000 from the foreclosure sales of four properties. In each case, he was appointed by the courts to serve as the referee. In that role, he was overseeing the foreclosure auction and making sure that any surplus funds were returned to the Kings County clerk for disbursement. Sampson is accused of keeping that money for himself. He has pleaded not guilty to the charges.
  
  Josh Zinner, co-director of NEDAP, a nonprofit that works on economic justice issues, says the extra money from foreclosure sales often represents the families' leftover equity — and possibly their only source of wealth after they had lost their homes in foreclosure.
  
  Easterling thinks someone should have told him there was money out there owed to him.
  
  “I'm 70 years old, okay. I wasn't born yesterday. I mean I look in the mirror and I don't think I look that stupid,” he said. “If I should have been owed something, I feel like it should have been up to the court to inform me.”
  
  A spokesman for the Office of Court Administration admitted there is no system in place to make sure referees actually deposit surplus funds from a foreclosure sale to families. And, technically, it wasn't up to the court to notify Easterling.
  
  Even if Easterling had known he should claim it, prosecutors are saying, the money wasn't there to give. Sampson allegedly kept it.(1)

Source: Sampson Corruption Scandal Hits Home for One Family.

(1) According to the indictment, by helping himself to the surplus proceeds, Sampson, an attorney, allegedly violated a fiduciary duty to the Brooklyn Supreme Court. If true, and if the funds ultimately cannot be recovered, and assuming that only licensed attorneys can act as court-appointed referees in New York, it may be that the violation of this duty may be enough to enable the court, as well as the ultimate victims (ex-homeowners and subordinate lien holders of the four foreclosed homes) to recover some or all of the pilfered proceeds from The Lawyers’ Fund For Client Protection Of the State of New York, the state's attorney ripoff reimbursement fund.

For information on "attorney ripoff reimbursement funds" in other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

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

Missing S. Florida Lawyer's Antics Cost Client His Home; Victim Loses $72K Held In Trust, Another $40K Non-Refundable Deposit On Residence Being Bought On Rent To Own Basis

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports;

• The day before Boca Raton attorney Timothy McCabe disappeared last month he blindsided a Broward County couple with a request to wire him $60,000 to complete their deal to buy a new home, the couple's attorney said Wednesday.
  
  George and Lori Miquel didn't send the money because they thought they had enough cash in McCabe's trust account — up to $72,000 — for the closing. They soon discovered the money was gone and so was McCabe, said the Miquels' attorney, H. Dohn Williams.
  
  The Miquels have become the first to file what is anticipated to be a series of lawsuits related to McCabe's April 2 disappearance. The Florida Bar has alleged that more than $3 million is missing from his law firm's trust account and his title company's escrow account.

***

• The Miquels knew McCabe's family through North Broward Preparatory School in Coconut Creek, where the attorney's three daughters go to school, Williams said.
  
  The couple had been depositing money in a trust account controlled by McCabe since April 2011 with some of it to be used to buy a new home, according to the Palm Beach County Circuit Court lawsuit. The Miquels recently had moved into a house near North Broward Preparatory with an agreement to lease it before buying, Williams said.
  
  They put down a $40,000 nonrefundable deposit for the home, Williams said.
  
  With McCabe's disappearance, the deal to buy the house collapsed, they lost the deposit and they had to quickly move out, Williams said.(1)
  
  The April 29 lawsuit, seeking $112,000 plus punitive damages, is not only against McCabe and his law firm, but also names McCabe's wife, Donna, and his law partner, Steve Samiljan, as defendants. Williams alleges that some of the Miquels' missing trust money was used to pay off a $386,000 mortgage on the McCabes' Boca Raton home.(2)
  
  Samiljan said Wednesday that he had not seen the lawsuit. He said he hasn't heard from McCabe since the April 2 email and he's unaware if McCabe was trying to get clients to wire him money before he left.

For the story, see Boca Raton attorney's disappearance leads to lawsuit.

(1) The victimized client may be able to assert an equitable claim against the home seller that a lease-purchase, contract for deed, installment land sale contract, rent-to-own, or any other similar such arrangement where the victim and his family paid a substantial deposit and has already taken possession of the premises constituted an equitable mortgage, whereby the victimized client would be deemed the equitable owner.

In the event a court deems the arrangement an equitable mortgage, the home buyer will be treated as the holder of equitable title and the home seller's only recourse to recover said title and possession of the premises would be to file a full blown foreclosure action; a simple landlord tenant eviction procedure would legally not be sufficient to recover equitable title & possession..

See, generally., H & L Land Company v. Warner, 258 So. 2d 293 (Fla. App. 2d DCA 1972):

• The doctrine of equitable conversion is established in Florida. See Arko Enterprises, Inc. v. Wood, Fla.App. 1966, 185 So.2d 734, and cases cited therein. If a land sale contract is specifically enforceable, and is free of equitable imperfections, the vendee becomes the equitable owner of the land and the vendor holds legal title as security for the vendee's performance.
  
  Moreover, we concur with the decision of the District Court of Appeal for the First District in Mid-State Investment Corporation v. O'Steen, Fla.App. 1961, 133 So.2d 455, holding that an installment land sale contract is in essence a mortgage, and pursuant to Fla. Stat. § 697.01, F.S.A., the safeguards for the debtor and the remedies for the creditor are the same as those between a mortgagor and mortgagee.
  
  Appellant urges us to disregard the Mid-State holding, on the ground that the installment seller in that case was really no more than one who financed the buyer's purchase from a third party, whereas in the case now before us the installment seller made a direct sale to the buyer. We are unwilling to declare that the Mid-State reasoning is inapplicable here.
  
  By way of dictum, the Supreme Court of Florida in Huguley v. Hall, Fla. 1963, 157 So.2d 417, recognized that in Florida a defaulting purchaser pursuant to a contract for deed is ordinarily entitled to an opportunity to redeem (sometimes inaccurately called an "equity of redemption"), subject to the protection of a court of equity.

See also, Henry v. Ecker, 415 So. 2d 137 (Fla. App. 5th DCA 1982):

• [A]s between the parties, when no rights of a third party are involved, such equitable title and interest in the land should not be summarily terminated as forfeited, nor should it be adjudicated in a possessory action at law, but should be terminated only by an action in equity, in which action the purchaser, even one who has defaulted, is always judicially given one last fair equitable opportunity to redeem his right in equity to a conveyance of the legal title to the property by payment of all sums due and by himself "doing equity" as may be necessary.

Go here and go here for a non-all-inclusive survey of some Florida case law on the court-created doctrine of equitable mortgage.

(2) The Florida Bar's Clients' Security Fund was established to reimburse clients who have suffered a loss due to misappropriation or embezzle­ment by a Florida-licensed attorney.

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

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

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

Banksters, Other Wrong-Doers Continue Making Gov't Look Stupid When Collecting On Financial Settlement Deals; Feds Response: Merely Announcing Big Monetary Penalties Deters Wrongdoing More Effectively Than Collecting Them Would!

From an op-ed column from ThompsonReuters News & Insights:

• Uncle Sam may be good at many things - but collecting fines and paying them out isn't one of them. U.S. federal agencies corral only a small fraction of the penalties they levy. Foreclosure-abuse settlements with domestic banks show they're just as bad at doling out lawsuit proceeds to victims. Government glitches are always to be expected. But such widespread incompetence only encourages scofflaws.
  
  The latest blooper involves beneficiaries of more than $9.5 billion in settlements that the Federal Reserve and the Office of the Comptroller of the Currency struck with the mortgage servicing units of Goldman Sachs, JPMorgan Chase and other big financial institutions. Some of the borrowers received less than owed under the deals designed to compensate them for improper home foreclosures and other processing mistakes. The snafu comes a month after a number of compensation checks bounced.
  
  The culprit may actually be the private firm that manages the checks, but regulators bear blame for hiring it. And these aren't the only instances of the federal government mucking up the follow-through on payments extracted from alleged wrongdoers.
  
  Though more than $65 billion in monetary penalties are owed to U.S. agencies, only pennies on the dollar are ever paid, according to a study published in the Yale Law & Policy Review. America's chief mining regulator has collected about 5 percent of fines levied; Customs, about 31 percent. And the payment rate for criminal court judgments has been a measly 4 percent.
  
  Agency officials argue that merely announcing big monetary penalties deters wrongdoing more effectively than collecting them would. Perhaps, though deterrence can be a problem even when the amounts are paid. Consider the New York state attorney general's recent allegations that Wells Fargo and Bank of America have failed to comply with their obligations under a separate, $25 billion mortgage-servicing settlement with five banks last year.
  
  The issue under the most recent settlements, however, isn't deterrence, but compensation for borrowers whose homes were, in some cases, wrongly repossessed. Having won such compensation, the feds should at least make sure it gets properly paid. The failure to do so risks giving miscreants - as well as their victims - yet another reason not to take law enforcement seriously.

Source: Breakingviews: U.S. flops at collecting fines and paying them out.

Nevada AG Bags Four For Allegedly Running Racket That Peddled Forensic Audits, Other Scams Purporting To Help Financially Strapped Consumers Obtain Their Homes Free & Clear Of Mortgages

From the Office of the Nevada Attorney General:

• Nevada Attorney General Catherine Cortez Masto announced that three Nevada residents and one California resident have been indicted by a grand jury on several felonies in connection with their operation of a mortgage lending fraud scam.
  
  A 15 count indictment was returned by a grand jury on April 22, 2013, charging the following individuals:
  
  Lynda Finch-Estrada, 54, of Las Vegas, Nevada
  William Chrissikopoulos, 43, of Las Vegas, Nevada
  Alan Dornhuber, 63, of Las Vegas, Nevada
  William Patterson, 51, of El Monte, California
  
  “Mortgage and foreclosure rescue scams continue to threaten Nevadans and their homes,” said Masto. “Our office cannot investigate or prosecute cases like this without hearing from possible victims. I encourage potential fraud victims to submit complaints to our office.”
  
  Operating under the name USFP, Estrada, Chrissikopoulos, Dornhuber, and Patterson pushed a so-called “forensic audit” promising clients that if a “forensic audit” of their mortgage uncovered one or more “Real Estate Settlement Procedures Act (RESPA)” violations, clients would be entitled to a legal remedy resulting in the elimination of their mortgage obligation.
  
  Defendants also peddled an “administrative process” by falsely claiming that sending documents to various entities signed and fingerprinted in accordance with specific instructions including the use of multi-colored inks had legal significance which would result in clients obtaining their home free and clear of their mortgage.
  
  Finally, defendants sold a program whereby clients would obtain their home free and clear of their mortgage by quitclaiming their home to a nonprofit, “American Home Rescue”, paying rent to the alleged nonprofit for a period of time, and then having the nonprofit deed the home back to the clients.

For more, see Attorney General Masto Announces Four Indicted in Mortgage Fraud Scam.

For the indictment, see State v. Finch-Estrada, et al.

Bible-Thumping Suspect Pinched For Allegedly Targeting Homes In Foreclosure, Hijacking Title & Possession Through Forged Grant Deeds, Then Pocketing Cash By Renting Them Out To Unwitting Tenants; Early Homeowner Complaints To Cops Met With "It's A Civil Matter!" Dodge

In San Bernardino, California, The Press Enterprise reports:

• A man who authorities say persuaded potential renters to trust him by writing Bible verses on fake grant deeds is scheduled to appear in court in San Bernardino on Monday, May 6, for a preliminary hearing.
  
  Bob Frierson, 42, has been charged with six counts of recording a false document, six counts of forgery and one count of residential burglary. An arrest warrant was put out March 27. He was arrested by San Bernardino County district attorney investigators assigned to the Real Estate Fraud Prosecution Unit.
  
  Senior Investigator Ed Nyberg said in an interview that Frierson drove around North Fontana, Rancho Cucamonga and Victorville the past three years to find vacant homes that were in foreclosure. Frierson would then forge fake grant deeds and show them to unsuspecting renters as proof that he owned the properties, Nyberg said.
  
  The Bible verses, which Nyberg said he saw on seven fake grant deeds, were often two or three sentences and contained themes of personal rights of staying on a property or giving property to other people.
  
  “I’ve never seen anything like that,” Nyberg said. “This guy is just a con artist. I think he was using (the verses) as a lure.”
  
  Frierson would collect rent until the properties were foreclosed on, and the banks would then evict the renters, who would lose their deposits, he said.
  
  Also, the true property owners in some cases lost their homes to foreclosure because they could not evict the tenants in time to sell the homes. Homeowners seeking evictions would call police, but the officers, unaware of what the DA is calling a criminal scam, would tell the homeowners to pursue the evictions through the civil courts, Nyberg said.
  
  Some of the property owners had been seeking loan modifications in hopes of keeping their homes, Nyberg said.

Source: Forgery defendant used Bible to lure rent victims, DA says.

For the San Bernardino County District Attorney press release, see Rental Scam Artist Arraigned on Forgery and Burglary Charges.

For the Felony Complaint, see People v. Frierson.

Use Of Flawed 'Honor System' Approach To Oversight In Connection With Judge-Appointed Lawyers & Their Handling Of Million$ In NY Foreclosure Sale Surplus Proceeds Now Under Review By State Office Of Court Administration

In New York City, the New York Daily News reports:

• The case of a Brooklyn state senator charged this week with embezzling $440,000 in escrow funds has exposed a stunning flaw in how sales of foreclosed properties are handled.
  
  Lawyers appointed by judges to oversee foreclosure cases are handling millions of dollars, with no oversight.
  
  Stunned by the indictment of state Sen. John Sampson (D-Brooklyn), charged with embezzling $440,000 from sales of foreclosed properties, the state Office of Court Administration launched a review Tuesday of how foreclosure sales are handled.
  
  Changes are likely.
  
  “Clearly there is a statutory weakness that needs to be strengthened for greater accountability,” said OCA spokesman David Bookstaver. “In the interim, we’re examining ways to add accountability.”
  
  Prosecutors say Sampson, an attorney, was appointed by Brooklyn judges to serve as a referee in several foreclosures.
  
  His job was simple: to receive the proceeds from sales of foreclosed properties, and then pay off the mortgage, lawyers and any other creditors. Any remaining money was supposed to be turned over to the homeowner.
  
  But beginning in 1998, prosecutors say, he kept surplus funds from four foreclosure sales — $440,000 in all — and used some of it to bankroll a failed campaign for Brooklyn district attorney in 2005.
  
  Courthouse insiders say the honest disbursement of this surplus cash is up to the lawyers appointed as referees. There are no audits. “We rely on the referee to be truthful about the amount of surplus funds,” said Brooklyn County Clerk Nancy Sunshine.(1) “The clerk has no authority to question that. It’s on the homeowner and creditor to check on what’s left over.”

Source: State Sen. John Sampson embezzled $440G in foreclosure funds: prosecutors (Sampson has been indicted for taking the funds from sales of foreclosed properties as the state Office of Court Administration reviews the process. Sampson was an attorney and appointed referee to handle foreclosure sales).

(1) While the "honor system" may have a place when one deals with 5-year olds in a kindergarten classroom,  it generally tends to be somewhat less ineffective when dealing with other "grown-ups," especially if they're handling substantial sums of money, in my view.

Steady Stream Of Lawyers Pour Out Of Woodwork Offering Pro Se Homeowner Free Help After Judge 'Green-Lights' Her Constitutional Challenge To Colorado Foreclosure Laws; She Finds Sudden Turn Of Events "Mildly Amusing" But Is "Grateful"

In Denver, Colorado, The Denver Post reports:

• More than a dozen lawyers have surfaced with offers to help an Aurora woman in her constitutional challenge of Colorado's foreclosure laws, a case she has battled on her own for about two years.
  
  After a federal judge's temporary injunction Monday that looks to take on whether homeowners facing foreclosure are treated unfairly, Lisa Kay Brumfiel said her solo plight is finding new followers.
  
  "There's just been a steady stream of them," the 43-year-old part-time saleswoman said of the attorneys offering to take on her case for free.
  
  She says she's not bitter that they weren't there to help her before — "Everyone wanted to be paid, but you're facing foreclosure because you can't even meet your house payments," she said — and hopes she can have a team of them take on Colorado's foreclosure process.
  
  U.S. District Judge William Martinez issued an interim preliminary injunction stopping the foreclosure auction of Brumfiel's four-bedroom house, saying she had prevailed enough to challenge the constitutionality of state law.
  
  That law allows a lender to foreclose with only the signature of its lawyer saying it has the right to do so. That happens with only a photocopy of the mortgage — which in Colorado is called a note — not the original or even a certified copy, and the lender doesn't have to prove it owns the note.
  
  Brumfiel said that lawyer's signature, called a statement of qualified holder, violates her constitutional rights to due process under the 14th Amendment. The bank should be required to provide proof that it owns the note and the right to foreclose, she said, not just possess a copy.
  
  "This theory of 'show me the note' has been tried in many courts without success, but Colorado law is unique in that a lawyer's signature is simply good enough," said Keith Gantenbein, an attorney who has offered to help Brumfiel. "This is an extremely important chance to change a very bad law."
  
  Martinez set a hearing for May 15 to take on the issue.
  
  Said Brumfiel: "I find it mildly amusing (the lawyers) show up now, but I'm grateful the table is turning and they're interested."

Source: Lawyers offer help in challenge of Colorado foreclosure law.

Texas-Based Real Estate Slum Operator Notorious In Houston & Buffalo For Peddling Crappy Rent-To-Own Deals To Unwitting Wanna-Be Homebuyers Hit With Baltimore Suit Alleging His Business Model Presents Nuisance That Threatens Communities' Well-Being

In Baltimore, Maryland, Baltimore City Paper reports:

• Backed by the non-profit Community Law Center,(1) six Baltimore neighborhood associations have sued a Texas-based property speculator for $8 million, saying his business model presents a nuisance that “threatens the well being of the communities.”
  
  The defendant, Scott Wizig, owns about 140 city properties, plus dozens more in Houston, where he is based. In the early 2000s he was charged criminally by the state of New York and dubbed “Buffalo’s worst slumlord,” eventually settling the case for several hundred thousand dollars. He started buying in Baltimore in 2001; City Paper took note of him three years later and not much has happened in the nine years since then.
  
  “He first got our attention with the ‘We buy houses’ signs,” says Kristine Dunkerton, the Community Law Center’s executive director. “He racked up quite a bill with the city for posting the signs. But he never did anything with the properties.”
  
  (Baltimore city strengthened its ordinance against so-called bandit signs in 2006. The city’s housing department enforces the ban, though with difficulty according to this 2009 City Paper story).
  
  Wizig buys run down houses via tax sales, paying just a couple thousand dollars each for houses that are arguably worth even less, because most need expensive rebuilding to be habitable. In the early 2000s he was renting them to tenants for about $500 a month through a local property manager. City Paper found tenants who said promised repairs were never made. The manager and Wizig blamed each other and Wizig said he was getting out of the rental business then: “We don’t anticipate doing any more rentals with new customers [in Baltimore], but we are certainly going to look into and make sure the existing customers are being taken care of.”
  
  In Buffalo and Houston, Wizig’s business model revolved around a lease-to-own contract, often one that required the lessee to rent for a couple of years before being able to exercise their option to buy the property. Houses Wizig picked up for a couple grand would routinely be sold for ten times that—though the buyers often defaulted, beginning the cycle anew.
  
  New York prosecutors called the scheme deceptive; Wizig eventually pleaded guilty to hundreds of violations of state housing laws there. The Houston Press, an alternative weekly, wrote about Wizig’s deals in Houston, though he has apparently faced much less legal trouble there.
  
  Land records indicate that Wizig has sold many houses in Baltimore, financing the purchase through one of his companies. It is unclear in the documents whether these are rent-to-own deals. But Wizig’s buyers do not always fare well, and Wizig is himself a defendant in five open foreclosure actions listed in Baltimore courts. The oldest, filed in August of 2011, involves 4046 Park Heights Ave., which a Wizig company called Compound Yield Play sold to Joan E. Lilly in 2008 for $43,200. Wizig had bought the property two years earlier for $2,202.
  
  Another house Wizig sold to Lilly, 1419 E. Federal St., is now in receivership after city action. Wizig’s bought it for $4,396 in 2006 and sold it to Lilly in 2008 for $39,900.
  
  Wizig did not return City Paper’s phone call.
  
  Wizing’s buyers and business partners are not party to the suit. Instead, neighbors of the dilapidated properties are suing under a law called The Community Bill of Rights. The law is more than a decade old, but amended only last year to make it usable to community associations, Dunkerton says. “We decided with the new Community Bill of Rights legislation . . . to put the community in the shoes of code enforcement.”

For the story, see Fed Up: Community associations sue problem landlord for millions.

(1) Community Law Center, a nonprofit law firm, provides legal services to community and nonprofit organizations throughout Maryland to promote stronger nonprofits and more vibrant neighborhoods.

Would-Be Tenant Gets Quick Boot After Paying Thousand$ To Rent Four Bedroom Home From Foreclosed Owner/Real Estate Agent

In Fort Lauderdale, Florida, WPLG-TV Channel 10 reports:

• "I'm angry... I'm really angry. I'm so frustrated and so exhausted," Jeff Sandler said while packing.
  
  On his moving day, while surrounded by movers, Sandler still had baggage that wouldn't fit into any box and anger that he couldn't keep a lid on. "It's a huge financial and emotional drain," he told Local 10's Ross Palombo. The drain, though, began as a dream.
  
  It started when he found a half-million dollar, four-bedroom, three-bath, 3,000-square-foot home to rent in Fort Lauderdale. Owner and realtor Sheri Edewaard leased it to him for $2,700 a month. "And, I rented the home from her. I did everything I was supposed to do legally," Sandler said.
  
  He thought the deal was signed, sealed, and delivered until something else arrived: an eviction notice.
  
  "I had a very abrupt knock at my front door... They demanded I leave the premises in 24-hours," Sandler said. The demand came from a "Writ of Possession." He was being evicted because the house was foreclosed upon. "She didn't tell me that her house was in foreclosure and I had been evicted," he added.
  
  Court records show that the bank began foreclosure in February 2012. By October, a judge finalized the foreclosure. According to the lease obtained by Local 10, Edewaard then signed an agreement in November to rent that house to Sandler. "I just feel ridiculously violated and I don't understand how people can get away with that," Sandler said.
  
  State record show that Edewaard has been a licensed real estate agent for 13 years and has no formal history of complaints. Local 10 tried several times to locate her at her home and office without success and left several messages asking for her side of the story. Edewaard never agreed to an interview to tell her side of the story.
  
  The one person who did call to comment was the man who she works with: successful realtor John Castelli. "You don't believe your agent did anything wrong?" Palombo asked. "I don't believe she knowingly did anything wrong," Castelli said.
  
  "You don't think a licensed realtor should have know that her home was, one, in foreclosure and, two, foreclosed upon? You don't think she should have known that as a realtor before she signed a lease with someone?" "I don't believe she knew it was in foreclosure," Castelli said several times.
  
  Edewaard, he said, still works with him.
  
  Assistant State Attorney Al Guttmann can't speak directly about that case, but said Broward County has seen plenty of foreclosure cases. "Broward has had more than its share of foreclosure and fraud," Guttmann said.
  
  Foreclosures are on the rise in Broward, according to the County Clerk's office. There were 19,651 in 2011 and 24,076 in 2012, an increase of 18 percent.
  
  "You're entitled to rent in foreclosure," Guttmann said. "But, here's the catch... you've got to tell your renter." If you don't, he said, it could be fraud or felony fraud. "It's unfortunate. It's a shame, and it could be a crime," Guttmann said.
  
  "Is that something your office would prosecute?" Palombo asked. "We'd certainly take a look at it," Guttmann replied.
  
  Edewaad herself hasn't formally been accused of any crime. But S andler is speaking with prosecutors and the state agency that granted Edewaard her license. "Something should be done about it," Sandler said.
  
  For him, though, nothing could be done in time. After spending thousands of dollars on moving and attorneys, there is now nothing left for him to do but move on. "Unbelievable that we have no rights," Sandler said. "I absolutely feel helpless. I just don't get how we're not protected."

Source: Renter evicted from half-million dollar home (Man evicted because Fort Lauderdale home was foreclosed upon).

Ohio AG Indicts Seven In Home Repair Scam Primarily Targeting Seniors Mostly In Their 80s & 90s; Two Suspects Tied To Similar Earlier Racket That Landed Them Prison Time 10+ Years Ago

From the Office of the Ohio Attorney General:

• Ohio Attorney General Mike DeWine stood beside Central Ohio law enforcement officers to announce the indictments of seven people who ripped off elderly victims in Fairfield, Franklin, Pickaway, and Ross counties with their door-to-door home improvement scheme.
  
  “These scammers preyed on people mostly in their 80’s and 90’s,” said DeWine. “They not only preyed upon them once, but in most cases, they continued their lies to get more money. And that has added up to a loss of $102,000 for more than a dozen victims. We know there are more victims, which is why this investigation is not over.”
  
  The suspects typically would approach a homeowner with a story about something that needed to be fixed like a roof or chimney. The homeowner would agree to the work, only to learn later the bill was much higher than expected and little or no work was performed. Sometimes the suspects would approach a homeowner declaring they’d already fixed the issue on the home (without permission), and they were owed money for the work.
  
  After the payment check was written, the suspects would return later saying they’d overcharged the homeowner. They’d ask for a second check to be written, ensuring the homeowner that they hadn’t cashed the first check when, in fact, they had. The suspects pulled the check story scam over and over. One 89-year-old woman wrote 14 checks totaling $23,400. One 86-year-old man lost nearly $50,000 writing 29 checks.
  
  Bruce McFarland, Herschel Mumaw, Mark Christman, Mark Kitchen, Michael Fausnaugh, David Ramey, and Thristian Harding, all from the Circleville area, were indicted in Fairfield County on multiple felony counts including: Engaging in a Pattern of Corrupt Activity; Conspiracy; Money Laundering, and Theft from an Elderly Person.
  
  McFarland and Mumaw, both of whom were sent to prison as part of the “Circleville 30” convictions more than a decade ago, now face a maximum of 57 years in prison if convicted.
  
  “Twelve years ago, the Attorney General’s Office sent more than thirty people to prison for robbing senior citizens in this same kind of scam,” Attorney General DeWine said. “When we learned that some of the same people had served their prison time, gotten out, and were continuing their hunt for elderly victims in a new home repair scam, our investigators, along with so many other law enforcement detectives, worked tirelessly to put a stop to this.”
  
  The “Circleville 30” was a group of relatives and friends who stole hundreds of thousands of dollars from elderly homeowners, after claiming they’d done some type of home improvement work. In 2000, a taskforce led by the Attorney General’s Office convicted more than 30 people.

For the Oho AG press release, see Attorney General DeWine Announces Indictments in Central Ohio Home Repair Scam that Targets Elderly Victims.

Disbarred Attorney Indicted For Allegedly Ripping Off 83-Year Old Woman Of $400K+ In Connection With Complex Real Estate Deal

From the Office of the Ohio Attorney General:

• Ohio Attorney General Mike DeWine and Hamilton County Prosecutor Joseph Deters announced [] the indictment of a disbarred attorney who allegedly stole more than $400,000 from an 83-year-old woman from Morrow, Ohio.
  
  William G. Goetz, of Cincinnati, was indicted Tuesday by a Hamilton County grand jury on two counts of Theft from the Elderly, two counts of Money Laundering, and one count of Tampering with Records. If convicted, Goetz faces a maximum of 31 years in prison.

***

• According to investigators, Goetz prepared legal documents and participated in a complex real estate transaction for the homeowner.
  
  He allegedly took more than $400,000 from the homeowner that was intended for future tax payments stemming from the land deal. Goetz is accused of depositing the funds into his business accounts for his own personal use.
  
  As part of the deception, Goetz also created a fake letter from the Ohio Attorney General's office to further his crimes.
  
  Goetz was disbarred by the North Dakota Supreme Court in 1991 for fraudulent dealings with his clients. He is not and has never been an attorney admitted to the practice of law in Ohio. The Ohio Supreme Court sanctioned Goetz for unauthorized practice of law and fined him $30,000 in 2005.
  
  A warrant has been issued for Goetz's arrest.

For the Ohio AG press Release, see Attorney General DeWine and Hamilton County Prosecutor Deters Announce Indictment of Disbarred Attorney.

Stockbroker, Hubby Get Seven Years For Conning Dementia-Stricken, 94-Year Old Woman Into Signing Over Control Of Her $10M Estate

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:

• A Hollywood stockbroker and her husband will spend the next seven years in prison after a jury found them guilty of conning a 94-year-old friend into signing over her $10 million estate to them.
  
  Cynthia Franke, 52, and her husband, Tyrone Javellana, 48, were convicted on March 19 of exploitation of the elderly, a charge that carries a maximum 30-year prison term. The couple were accused of befriending Josephine Troisi, then becoming her financial advisers.
  
  According to prosecutors and witnesses, Franke and Javellana persuaded Troisi to disinherit her own family members and turn her fortune over to them.
  
  But Troisi, who suffered from dementia, lacked the capacity to make sound decisions when Franke took her to an attorney to change her will and her trust in 2009.
  
  Troisi's son, John, had been keeping track of his mother's finances and contacted police when he noticed payments to Franke and Javellana ranging from $500 to $5,000. In all, police said the couple tricked Troisi and her sister, Mary Teris, out of more than $100,000 and set themselves up to inherit even more.

For the story, see Broward couple sentenced in elderly exploitation case.

Vet Who Claims He Was Victimized By Local Police Dept. Employee In Land Contract Ripoff That Led To Foreclosure Says Latter Allegedly Invited Her Co-Workers To Loot Premises While He Was Out-Of-Town; Cops Then Placed Alleged Victim Under Arrest For "Misuse Of 911" Saying Reported Burglary Is Only A Civil Matter

In Mt. Pleasant, Michigan, Salem-News.com reports:

• U.S. Navy veteran Ted Visner and his wife, Kathy Smith of Mt. Pleasant, Michigan, have been living out a nightmare. It started two and a half years ago, when the family fell victim to an apparent real estate scam by a local sheriff's department employee.
  
  Ted Visner says they bought their former home on a land contract, only to learn seven months later, that the seller, Isabella County Sheriff's Dept. employee Shelly Sweet, was not making monthly payments on the house. A bank foreclosed on the property, all unbeknownst to the Visner/Smith family.
  
  Ted Visner, who builds custom homes for a living, said, "Although we were paying Sweet every month on the purchase of the property, she had not been paying the underlying mortgage and the home fell into foreclosure." I asked Visner if he had records of those payments, he said he does, including canceled checks. You won't believe what happened next.
  
  "On a weekend Sweet knew that we would be out of town, she offered the contents of our home to her friends and coworkers at the Isabella County Sheriff’s Department, claiming we had abandoned the home. Many took her up on her free offer deal and took over $55,000 dollars worth of our personal property."

***

• The story seems blatantly criminal in nature, with police banding together to help off their property in its entirety. Visner said, "She just put a sign out and let anybody have what they wanted, she didn't remember who was there. In her own disposition she admits to giving our stuff away."
  
  Visner says Sweet told her employer, the sheriff's department that Visner and his wife weren't making payments, while Visner is able to prove via canceled checks to Sweet that they were indeed paying. "It was blatantly untrue," Visner added. "There is no evidence to support what the county did, it all shows what we are saying though."

***

• Visner, Smith and their kids, returned from their weekend away on Monday September 27, 2010, to discover that they were locked out of their own home. Visner called the law enforcement agency that Sweet worked for. [...] It would take a day before the family was allowed to go back inside of the home, and that is when Smith and Visner learned that 95% of the home's contents had been stolen.
  
  "A sheriff deputy named 'Steinert' came to our home three times that day and only assisted his coworker while the under-sheriff, sheriff and PA refused to help us after they recognized the totality of the situation," Visner said, adding that the "situation" was 6+ coworkers of Sweet having entered their home and receiving stolen property, which for anyone else in the world is Theft.
  
  Instead, Visner was arrested for "Misuse of 911" on the deputy's third visit. "The county investigated the crime for almost four months and during this time, I moved my family out of Isabella County for safety, I could not move with them because my indefinitely delayed arraignment still loomed over my head."
  
  Visner says after losing the home he shared with his family, and 95% of their belongings to the sheriff's department, that the prosecutor's office ignored their complaints and still refused to investigate "their employees". In his words, "Over two and a half years have passed now with law enforcement officials doing nothing except covering for one another."

For the story, see Sheriff's Department Takes Family's Home and Contents Using a Fake Eviction.

See also, The Morning Sun: Isabella man to appeal lawsuit judgement.