Cops Hunt Man For Allegedly Scamming Two Unwitting Families In Rent Ripoff Involving Vacant Home In Foreclosure

In Marietta, Georgia, WSB-TV Channel 2 reports:

• Two Cobb County families are searching for a man who collected thousands of dollars for a rented home and disappeared. It turns out the two-story Marietta home was in foreclosure. Local investigators have since joined the hunt for the man.

• "Unfortunately, lost $1,100,” victim Laura Price told Channel 2 Action News reporter Ross Cavitt. [...] After seeing a roadside ad, she contacted the advertised real estate agent, Celyon “Lonnie” Barclay, who she said took the deposit and told her to move in. “For the first month’s rent, I tried to meet him and he never showed up,” Price said.

• After filing a report, Price, and Cavitt, discovered that Barclay has been in and out of jail on various charges and has a list of companies he’s incorporated that don’t seem to exist, with phone numbers that go nowhere.

• To top it off, the home was rented to another family who found the ad on Craigslist and moved in a few weeks ago. “I found out since then the house was in bankruptcy, and I can no longer get in contact with him,” resident Jeff Germany told Cavitt. Germany said Barclay apparently has no rights to the house, and the property will be sold on the courthouse steps in a few weeks.

Source: Man Accused In Rental Rip-Off.

Southern California Attorney Arrested For Threatening "Armed Confrontation" In Defending Client From Losing Home To Purportedly Illegal Foreclosure

In La Costa, California, KGTV Channel 10 reports:

• A local attorney known for going to extreme measures to save his clients' homes was arrested on Wednesday and an exclusive video obtained by 10News reveals the threat that led to one of the attorney's arrests.

• Encinitas attorney Michael Pines was arrested on Wednesday for violating a restraining order against him. Before he was arrested, Pines was in the process of fighting for clients who he said were illegally evicted from their La Costa home.

• Wednesday's arrest was Pines' third arrest in less than a week. On Saturday, Pines was arrested when Carlsbad police said he became violent with a security guard at a La Costa home. Pines was also arrested the day before for trespassing and threatening the security guard, which was caught on video.

• "I'm going to precipitate an armed confrontation … Want me to say it again? I'm going to force an armed confrontation," Pines said on the video.

For more, and the link to the video, see Local Anti-Foreclosure Attorney Arrested After Threat (Michael Pines Arrested While Trying To Save Clients' La Costa Home).

Ongoing Nevada AG Criminal Probe Has 200+ Possible Foreclosure Rescue, Loan Modification Rackets On Prosecutorial Radar

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

• More than 200 companies are under criminal investigation for mortgage fraud with ties to such things as identity theft and prostitution, Attorney General Catherine Cortez Masto says. Edith Cartwright of the attorney general’s office said many of those companies have 50 to 100 complaints against them.

***

• Masto said the investigations center on mortgage foreclosure rescue scams or loan modification scams. “They are looking at various ways to scam people,” the attorney general said. “This is the easiest to set up shop and try to start taking dollars from mortgage fraud. But they are organized and they engage in other types of crime besides the mortgage fraud."

For more, see AG: 200 companies under investigation for mortgage fraud.

Plumber Allegedly Pocketing $5K From Homeowner w/out Doing Any Work Is No 'Civil Matter'; DA Treats Transaction As Home Improvement Trust Fund Ripoff

From the Office of the Rockland County, New York District Attorney:

• Rockland County District Attorney Thomas P. Zugibe [] announced that Jerry Cioffi (DOB 02/21/69) of [...] Thiells, New York has been charged with one count of Grand Larceny in the Third Degree, a class "D" Felony. Cioffi, a plumbing contractor who conducts his business under the company name of Cioffi Services, Inc., is alleged to have stolen $5,000 from a Nyack homeowner with whom he had contracted to construct a sewer connection from her home to a main sewer line.

***

• According to the charges, the victim contracted with Cioffi in April, 2010 to construct the sewer line. The customer gave the defendant a down payment of $5,000, which represented half of the $10,000 total cost of the project.

• The defendant allegedly assured the victim that he would procure the applicable permits and complete the work on or about May 1, 2010. In reality, Cioffi applied for no permits and performed none of the work by the time the victim contacted the County Department of Consumer Protection in late September.

• Cioffi is accused of walking away from the job and failing to provide an accounting or return of the victim’s money.(1)

For the Rockland County DA press release, see Home Improvement Contractor Arrested For Scamming Nyack Resident Out Of Thousands Of Dollars.

(1) According to the press release, the defendant will be prosecuted for Grand Larceny through application of the New York State Lien Law, which mandates that, upon acceptance of funds in connection with a contract for improvement of real property or home improvement, those funds become a trust, which can be used only to pay for costs incurred in the performance of that homeowner’s project. The use of that money for any other purpose is a larceny under the Lien Law. Further, the contractor must maintain separate ledgers for each job for which he has contracted. By failing to provide an accounting of how the money had been used and by not returning the money upon the demand of the consumer, the contractor violated both the Penal Law and the Lien Law.

Rockland County DA: Phony Mortgage Broker Clipped Couple For $26K For Purported Assistance In Getting Loan To Buy Home

From the Office of the Rockland County, New York District Attorney:

• Rockland County District Attorney Thomas P. Zugibe today announced that Andre Tolentino (DOB 10/17/58) of 8 Whitewood Drive, New City, New York has been charged with one count of Grand Larceny in the Third Degree, a class "D" Felony.

• Tolentino, an employee of the Bravo supermarket in Hillcrest, held himself out as a legitimate mortgage broker to a couple that frequented the grocery store. In 2007, the defendant offered the victims help in securing a mortgage to purchase the home, which they were renting at the time.

• According to the charges, Tolentino introduced the couple to a mortgage broker in New York City, to whom the family paid $10,000. Several months later, the victims paid an additional $15,000 dollars to the defendant - money he claimed was needed to finalize the loan. In this sham transaction, the couple was told to make the check payable to Tolentino’s wife.

• During subsequent months, other payments were made to the defendant after the victims were told additional monies were needed to complete their loan.

• Tolentino is not a licensed mortgage broker. The victims never received the mortgage.

For the press release, see New City Man Charged In $26,000 Mortgage Fraud Scheme.

Wisconsin Appeals Court OKs Debt Recovery Approach For Foreclosing Lender Holding Two Mortgages On Same Property, Despite Waiving Deficiency Rights

The State Bar of Wisconsin News reports:

• A foreclosing party [in Wisconsin] can cut short a mortgagor’s right to redeem property from 12 months to six if the foreclosing party waives a right to seek a deficiency judgment. When two mortgages exist, foreclosing on one and seeking money damages on the other won’t impact the foreclosing party’s rights to a six-month redemption period.

***

• The District III Wisconsin Court of Appeals in Harbor Credit Union v. Samp, 2010AP974 (Feb. 17, 2011), affirmed [a lower court ruling], concluding that “there is no reasonable way to read Wis. Stat. sections 846.04(1) and 846.101 to mean that the money judgment obtained on the second mortgage and note should count as a deficiency judgment for purposes of the foreclosure action.”

For more, see Appeals court clarifies redemption rights when two mortgages, one foreclosed.

Buying 'Inexpensive' Foreclosed Homes May Come Loaded With Major Hidden Costs

In Charlotte, North Carolina, WSOC-TV Channel 9 reports:

• A lot of people are looking to cash in by buying foreclosed homes, but some of those foreclosed homes may not be such a good deal. Action Nine Reporter Don Griffin rode along with a professional home inspector.

• Griffin found a foreclosed home for sale at $108,000 that he described as a babydoll, which is an industry slang term for a good deal. “No sir. It’s not a babydoll. Not now,” said Butch Upton, a licensed inspector with Housemaster. Upton said anyone buying a house like this or any foreclosed home without getting an inspection is asking for trouble.

• He found extensive termite damage in the basement. “It’s all the way down that back wall," he said. There is also water damage, mold issues and cancer-causing radon gas with readings high enough to require expensive corrections. "This house could cost anywhere from $2,000 to $5,000 to mitigate,” Upton said.

• Griffin climbed into the attic, where Upton showed him other hidden problems like leaks around the chimney and a cut board on a roof support. Outside, Upton showed Griffin where the deck was separating and unsafe and also the heat pump is missing. "It’s obviously been stolen and cut away," Upton said.

• Upton said to fix all these things would cost $30,000 making this foreclosed home not a good deal and because foreclosed homes are sold as is and that extra cost falls to the buyer. "That's why it’s important to have an inspection to know what you're buying,” said Upton. But before hiring any inspector, verify they are licensed and insured. Griffin said the bottom line is you can't assume that because it's a foreclosure that it's the best price.

Source: Foreclosed Homes Could Pose Heavy Hidden Costs.

Realtor With Vacant Foreclosed Home For Sale Walks In On Unexpected 'Show'

In Albuquerque, New Mexico, KRQE-TV Channel 13 reports:

• A local realtor who was trying to show a home over the weekend said she walked into a show she did not want to see. Police said April Espinosa was inside the Southwest Albuquerque home having sex with an unnamed man.

• Espinosa told the realtor it used to be her grandparent’s home but they had recently lost it to foreclosure. Police said they found a stolen car in the backyard with Espinosa’s things inside. She is charged with breaking and entering and car theft.

Source: Realtor finds unwanted guests in home.

Lawsuit: Home Foreclosed Out From Under Metro Detroit Couple Despite Being Told By Mortgage Servicer That Loan Modification Process Was Ongoing

In Detroit, Michigan, Bloomberg reports:

• Chuck and Alicia Krantz fell behind on their mortgage payments last year and sought to modify the loan to save their three-bedroom ranch home in Westland, Michigan, just outside Detroit, from foreclosure.

• Two payments in April brought them current, they said in a lawsuit filed in Detroit federal court. In May, CitiMortgage Inc., a unit of Citigroup Inc., told them they were in foreclosure and would be refunded the $3,129.96 they sent the month before. While the foreclosure proceeded, they continued to pursue a modification, Chuck Krantz said in an interview.

• CitiMortgage sent a modification package in May, requesting documents. Even as they discussed the modification with CitiMortgage, an ad announcing the foreclosure was published, said Adam Alexander, the Krantzes’ lawyer. The home was sold at a sheriff’s auction in June.

• “We sent all the paperwork via e-mail,” Chuck Krantz, 39, a disabled former casino dealer, said in an interview. “On the phone, they told us everything was all right.” He said he and his wife, who works for a transport company, were never formally denied a modification.

For more, see Michigan Foreclosure Method Catches Homeowners as They Seek New Financing.

AZ Bill To Declare F'closures Void When Bank Fails To Produce Full Chain Of Title Advances; Sponsor In Current Tussle w/ Servicer Over TILA Rescission

In Phoenix, Arizona, Bloomberg reports:

• Arizona may become the first state to require lenders to prove they have the right to foreclose by providing a complete list of any previous owners of the mortgage, under a bill passed yesterday by its Senate.

• The legislation, which is headed to the House after being approved 28-2 in the Republican-dominated Senate, would allow foreclosure sales to be voided if lenders that didn’t originate the loan can’t produce the full chain of title. Arizona permits nonjudicial foreclosures, meaning property can be seized from the homeowner without a court order.

***

• “If you foreclose on somebody you should have to tell them who owns the property,” Michele Reagan, who sponsored Senate Bill 1259, said in a telephone interview. “People have the right in this country to face their accusers.” The Republican lawmaker is in litigation with her mortgage servicer, which she said won’t identify the owner of the loan.

***

• The Arizona proposal was suggested to Reagan by her attorney, Beth Findsen, who said she also helped write the bill. Reagan and her husband, David Gulino, were sued by their servicer, Fort Worth, Texas-based Colonial Savings FA, after they told the bank in a July 2009 letter that they were rescinding the loan because it failed to disclose certain fees and that its underwriter inflated their income by 12 percent in violation of the federal Truth in Lending Act.

• Colonial Savings asked the court to declare that the couple isn’t entitled to revoke the loan. Reagan and Gulino filed their own suit, arguing that they were steered to an adjustable-rate mortgage they didn’t need and that Colonial Savings won’t tell them who owns their loan. Janet Walter, a spokeswoman for Colonial Savings, declined to comment.

• “It makes Michele mad that the bank servicers will not disclose to a borrower the true noteholders,” Findsen said. “She was taken aback that such basic information was not readily available.”

For more, see Arizona Bill Would Void Foreclosures Without Full Title History.

Some 'Rocket Docket' Judges Remain Unabashed In Their Cluelessness As They Continue To Bulldoze Home Foreclosure Cases Through System

From an op-ed column appearing in The News-Press (Fort Myers, Florida):

• Local judges have made some disturbing comments recently regarding foreclosure cases and people fighting in court to save their homes. The comments appeared Sunday and Tuesday in stories in The News-Press about the case of Linda Bassett, who claims the bank trying to foreclose on her house has used fraudulent documents, and that her case has not been given due consideration by the courts.

***

• Bassett's case went first to Senior Judge Hugh Starnes' courtroom Monday. Starnes said he would take all uncontested cases first. Those who wanted a jury trial would follow, and Starnes urged attorneys and clients to think hard before pressing for a trial: "When you get to the end of the day, I'll be frank with you, I tend to be more brusque." After working through dozens of cases with more trials to come, he warned, "You're not going to have a happy camper here on the bench."

• That is wrong. This gives the appearance that the judge's weariness and irritability will prejudice him against people seeking a trial for their case. If he's too tired or impatient to do the job, he should step aside for another judge.

• The case Monday was transferred to the court of Judge William McIver, another of the senior judges who have been recruited from retirement to hear the thousands of mortgage cases.

• "This senior judge is still learning how the process works for foreclosure," McIver told the courtroom. That's disturbing, too, if you are a party to a suit hoping for fair and informed treatment.

• We realize that the "rocket docket" requires judges to plow through a mind-numbing number of cases, in which the homeowner is well in arrears in payments. But these judges' comments raise questions about whether speed of disposition or due process takes precedence in foreclosure court. The rapid-fire disposition of foreclosure cases has probably contributed to abuses. The system appears to have been created to fail. And people become disappointed in the system, the banks and the rule of law.

• Problems have surfaced with bank documentation of their ownership of mortgages, forcing some foreclosure cases to be dropped. The attorney general's Economic Crimes Division is investigating whether certain law firms - "foreclosure mills" - created and filed improper documents to speed up foreclosure, without the knowledge of the homeowners involved. Whether Linda Bassett has a valid case remains to be seen. But she deserves a fair hearing.

Source: Editorial: Judges' words shake faith in local justice.

Head Of Western New York Foreclosure Mill Responds To Critics

The New York Law Journal recently ran a lengthy profile on the Buffalo-based foreclosure mill, Steven J. Baum, P.C. The story lists the various attacks that this outfit has been the target of, as well as Baum's response to his various critics.

For the story, see Firm Dominates Foreclosures, but Faces Growing Criticism.

BofA Stiffs Couple On Loan Modification Request, Forcing Them To Vacate Premises; Then Refuses To Complete 3-Year Old Foreclosure Process

In Las Vegas, Nevada, KTNV-TV Channel 13 reports:

• Linda and Mike Cirillo are seeing their old house for the first time in years. "Wow!" Linda says as she walks up to the front door. "They've been here." The "they" she's talking about is Bank of America. And it's obvious they have been here tacking notice after notice on the door announcing the foreclosure of the property. But this is not how Linda remembers her dream house.

***

• The dream started to sour quickly when they were hit with job loss and some medical issues. "And I called the bank to tell them I couldn't make the payment and at that time they told me to wait three months, and I called them back and said, but I don't want to be late on my payments. I want to work with you." But she says the bank wouldn't work with them.

• In February, 2008 B of A started foreclosure proceedings and sent the Cirillos a notice that they'd set a sale date. "We decided to go ahead and move before that because we didn't want to have to deal with waiting for that to happen and people pounding on our door and telling us to pack and move."

• So on June 12, 2008, they moved out, having no idea their name would stay behind. "It's financially ruined us. Our credit rating... they report us as being delinquent every month so our credit rating is completely gone. It's made it very difficult for us to do anything."

• B of A has set eight sale dates on the Cirillo's home over the last three years. The most recent note says, "Your home will sell on February 3rd at 10:00 a.m." But like all the others, the date came and went, but the house never changed hands. In the meantime, the Cirillos are being pursued from all angles.

For the rest of the story, see Contact 13 Investigates: Foreclosed but not forgotten.

Fee Gouging Allegations At Center Of Lawsuit Against Loan Servicer; Multiple Late Charges For Single Late Payment Among Sleazy Practices: Complaint

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

• A Putnam County man is suing Nationstar Mortgage after he claims it unlawfully charged him law payment fees that exceeded the maximum amount set forth in his loan agreement.

• In December 2003, David J. Triplett obtained a mortgage loan from GMAC Mortgage Corporation and in December 2008, the defendant began servicing the loan, according to a complaint filed Feb. 15 in Putnam Circuit Court.

• Triplett claims he was required to make monthly payments of $539.60 and at some point he fell behind on his payments and was charged $26.98 or more in late fees each month. The late fees exceeded the $5 maximum set forth in Triplett's loan agreement, according to the suit.

• Triplett claims Nationstar also has a regular practice of unlawfully assessing multiple late fees for a single late payment. He claims before February 2010, he had fallen behind on his loan payments, but that month he timely made a full loan payment to the defendant.

• Rather than apply the payment to the loan installment due in February, the defendant applied the payment to the installment due in January and then charged Triplett a late fee for both months, even though he was not late in making the February payment, according to the suit.

• Triplett claims Nationstar has been advised repeatedly that he is being represented by counsel, but has continued to contact him directly and demand payment. He claims the defendant has also told him to fire his attorney.

For the story, see Putnam man sues mortgage company over late fees.

Appeals Court Reinstates 'Fair Debt' Suit Accusing Foreclosure Mill Of Attempted Fee Gouging In Mortgage Payoff Letters Sent To Homeowner's Attorney

A Federal Court of Appeals just reinstated a lawsuit filed by a New Jersey homeowner seeking class action status that accuses the law firm representing a foreclosing lender of sending the homeowner's attorney mortgage payoff letters that included charges that, according to the lawsuit, were unauthorized by the loan agreement and were otherwise not allowed by law.

In reinstating the lawsuit, the appeals court referred to a ruling it issued last month in which it addressed this same question of law. In Allen v. LaSalle Bank, N.A., ___ F.3d ____, No. 09-1466, 2011 WL 94420 (3d Cir. Jan 12, 2011), it decided that a communication from a debt collector to a consumer's attorney is actionable under § 1692f(1) of the Fair Debt Collection Practices Act ("FDCPA"). One of the defendants in the Allen case is the same foreclosure mill targeted in the current case (Fein, Such, Kahn, And Shepard, P.C.).(1)

The lower court in the current case ruled that the letters from the bank's attorney did not form the basis for a FDCPA lawsuit. However, based on its earlier Allen decision, the 3rd Circuit Court of Appeals disagreed and, accordingly, vacated the ruling and remanded the case back to the lower court for further proceedings.

For the recent ruling of the appeals court, see Ogbin v. Fein, Such, Kahn, And Shepard, P.C., No. 09-2829 (3d Cir. February 22, 2011) (unpublished).

Representing the homeowner in this case, as well as the homeowner in the Allen case, is Lewis G. Adler, Woodbury, New Jersey.

(1) See Federal Appeals Court Reinstates 85-Year Old Widow's 'Fair Debt' Suit Alleging Illegal Fee Gouging After Missing Final Payment On 30-Year Mortgage.

Woman Accused Of Running $50M Mortgage Fraud, Rent-To-Own Racket Extradited Back To Virginia After Fleeing To Turkey; Most Homes Ended In Foreclosure

In Loudon County, Virginia, the Washington Examiner reports:

• An Ashburn woman who fled the United States amid accusations of running a $50 million mortgage fraud scheme has been extradited back to Virginia to face charges of money laundering and making false statements. Diane Atari, 43, is accused of inflating her clients' credit scores and incomes in order to qualify them for homes they could not afford, causing them to go into foreclosure, according to the Loudoun County Sheriff's Office.

• The Virginia Attorney General's Office and Loudoun authorities say Atari pocketed more than $1 million from the scheme, and the total loss on the fraudulent mortgages is estimated at $50 million.

• Authorities say Atari fled the country after she was indicted in July 2009. She was apprehended in Turkey in October 2009 and had been awaiting extradition in a Turkish prison until she was flown back to the United States on Friday night. Atari made an initial court appearance Tuesday.

***

• According to Loudoun authorities, Atari owned and operated two businesses in the county, ACR Consulting Co. and Atari Management Co. Through those, she offered rent-to-own services for people who wanted to buy a home but didn't have enough income or strong enough credit scores to qualify for a mortgage. [...] Atari received commissions when properties sold and fees for the credit repair services, the sheriff's office said. The office said most of the homes ended up in foreclosure.

For the story, see Va. woman accused in $50m mortgage fraud scheme extradited.

GC Tagged For Grand Larceny In Alleged $50K Scam; DA Invokes NYS Lien Law, Treats Payments Pocketed For Home Improvements As Trust Fund Ripoff

From the Office of the Rockland County, New York District Attorney:

• Rockland County District Attorney Thomas P. Zugibe [] announced that John J. DiGiacomo (DOB 08/27/58) of [...] New City, New York has been charged with one count of Grand Larceny in the Third Degree, a class "D" Felony. DiGiacomo, a general contractor who conducted business under the company name of "Olivia Rose Landscaping Contractors, Inc." is alleged to have stolen $50,000 from a homeowner with whom he had contracted to perform approximately $134,000 worth of home renovations.

***

• According to the charges, between October and December, 2008, the victim contracted with DiGiacomo to perform major renovations on his home. The customer gave the defendant more than $50,000 as a down payment for the project. District Attorney Zugibe said that DiGiacomo and Olivia Rose Landscaping performed minimal work for the victim before abandoning the uncompleted project. The victim was forced to hire new contractors to finish the project.

• The defendant will be prosecuted for Grand Larceny through application of the New York State Lien Law, which mandates that, upon acceptance of funds in connection with a contract for improvement of real property or home improvement, those funds become a trust, which can be used only to pay for costs incurred in the performance of that homeowner’s project.

• The use of that money for any other purpose is a larceny under the Lien Law. Further, the contractor must maintain separate ledgers for each job for which he has contracted.

• DiGiacomo is accused of walking away from the job and failing to provide an accounting or return of the victim’s money.

For the Rockland County DA press release, see Rockland County Home Improvement Contractor Charged In $50,000 Customer Swindle.

Cops Pinch Former Councilman On Deed Theft Charges; Allegedly Forged & Notarized Title Conveyance To Unwitting Owners' Property

In Russell County, Alabama, the Montgomery Advertiser reports:

• Authorities say a longtime member of the Phenix City Council has turned himself in to authorities on for­gery and perjury charges. WTVM-TV reported that 70-year-old Arthur Sumbry Sr. turned himself in to the Russell County Sheriff's Office Friday after being indicted by a grand jury.

• Russell County Sheriff Heath Taylor said the charges stem from an incident in 2008 when Sumbry was serving as a no­tary public. Authorities said Sumbry forged signatures on a deed to a house that he notarized and lat­er lied about it in court under oath. Taylor said the people whose names were forged real­ized they never signed the doc­ument.

Source: Former Phenix City councilman charged with forgery, perjury.

California Appeals Court: Homeowner Can't File Lawsuit To Stop Foreclosure Process Based On Claim That Noteholder Did Not Authorize It

In Southern California, Metropolitan News Enterprise reports:

• A defaulting mortgagee may not bring a declaratory action challenging the noteholder’s right to initiate a non-judicial foreclosure through a nominee, the Fourth District Court of Appeal ruled Friday. Div. One affirmed a San Diego Superior Court judge’s ruling dismissing an action against Countrywide Home Loans, Inc., Mortgage Electronic Registration Systems, Inc., and ReconTrust Company, N.A.

***

• Gomes sued in May 2009, accusing the defendants of “wrongful initiation of foreclosure” and violation of consumer protection laws. He asserted on information and belief that the current owner of the note did not authorize MERS to proceed with the foreclosure, and argued that the nonjudicial foreclosure statute does not preclude a prior judicial determination as to whether the party initiating foreclosure has legal authorization to do so. He asked for damages, a declaration of his right to challenge the nonjudicial foreclosure proceeding, and rescission of the notice of default.

• Judge Steven R. Denton sustained demurrers brought on behalf of all defendants. Gomes appealed, solely with regard to his causes of action seeking damages for wrongful foreclosure and declaratory relief.

• The Court of Appeal affirmed, saying there was no legal basis for a pre-foreclosure action, and that even if there was, the defendants would prevail because Gomes agreed, by executing the deed of trust, that MERS could initiate foreclosure if he defaulted.

• Justice Joan Irion, writing for the appellate court, said allowing suits such as Gomes’ would “interject the courts into [the Civil Code’s] comprehensive nonjudicial scheme” governing foreclosures, something not “permitted or contemplated” by the statutory language.

• Sec. 2924(a)(1), which expressly permits a “trustee, mortgagee, or beneficiary, or any of their authorized agents” to initiate foreclosure, she noted, makes no provision for a private action to determine whether the initiating party is so authorized.

• “The recognition of the right to bring a lawsuit to determine a nominee’s authorization to proceed with foreclosure on behalf of the noteholder would fundamentally undermine the nonjudicial nature of the process and introduce the possibility of lawsuits filed solely for the purpose of delaying valid foreclosures,” the justice wrote.

For the story, see C.A. Rejects Challenge to Nonjudicial Foreclosure Proceeding (Homeowner Cannot Use Court to Stop Process Based on Claim That Noteholder Did Not Authorize It—Panel).

For the ruling, see Gomes v. Countrywide Home Loans, Inc., (2011) ___ Cal.App.4th ___. (Certified for Publication, February 18, 2011) (when link expires, TRY HERE).

Wells Fargo Dodges Sheriff's Sale Of Its Office Furniture As Bank, Judgment-Holding Philadelphia Homeowner Resolve Legal Dispute

In Philadelphia, Pennsylvania, The Philadelphia Inquirer reports:

• Wells Fargo, the banking Goliath, apparently met its David in Philadelphia music promoter Patrick Rodgers. On Monday, Rodgers declared victory and put away his sling. When we first met Rodgers a week ago, he was a man with a complaint about Wells Fargo Home Mortgage. He'd even volunteered his own headline: "Philadelphia homeowner 'forecloses' on Wells Fargo."

• It was a slight exaggeration, but Rodgers had indeed taken Wells Fargo to Municipal Court and won a $1,000 default judgment when the mighty bank didn't bother to have anyone show up. When Wells Fargo didn't pay, Rodgers obtained a sheriff's levy to enforce the judgment.

• The result was a "Sheriff Sale" poster almost guaranteed to make his story go viral on the Internet: To satisfy the judgment, furniture and other contents of a Wells Fargo office on North Delaware Avenue were scheduled for sale next month.

For more, see Consumer 11.0: Borrower-bank dispute is settled; borrower wins.

Miami Trial Judge Puts Squeeze On Foot-Dragging Lenders With Old Foreclosure Cases That Clutter Judicial System

Buried in a recent Bloomberg story is this excerpt on Miami trial judge Israel Reyes:

• Judge Israel Reyes is giving the biggest U.S. banks a choice: Wrap up the home foreclosure cases clogging his Miami court, or dismiss them and walk away. Most are walking away, Bloomberg News’ David McLaughlin reports.

• “Listen, it’s either settlement or trial today. That’s it,” Reyes, 51, a former homicide detective, said two weeks ago to one lawyer who sought an extension after the homeowner received a temporary loan modification. “This case is over a year old.”

• Reyes, a judge for Florida’s 11th Judicial Circuit, is forcing banks to take their cases to trial to clear his backlog of almost 3,000 foreclosures. Instead of moving ahead, the companies are backing down. They’re dismissing their own cases or not showing up to trial because they’re not prepared or, according to lawyers for homeowners, they can’t come up with the evidence required to seize the properties.

Source: Cop-Turned-Judge Challenges Banks to Clear Foreclosure Backlog.

Lawsuit: Foreclosure Defense Racket Did Nothing But File An "Ill-Assembled Compilation Of Plagiarized Pleadings" That Operators Have "Bastardized"

In Marietta, Georgia, Courthouse News Service reports:

• A homeowner claims Home Savers USA and the two people who run it defrauded him of $2,000 and one of them forged his name on an "utterly incoherent" federal complaint, which they promised would save his home from foreclosure. But neither Rawlins Hinton, Helen Hinton nor anyone else affiliated with Home Savers USA is an attorney, and the documents they filed were "nonsensical," the homeowner says.(1)

• Donald Coleman sued the Hintons and their company for fraud, forgery, negligence, and practicing law without a license, in Cobb County Superior Court.

For more, see 'Home Savers USA' is Bogus, Client Says.

For the lawsuit, see Coleman v. Home Savers Inc., et al.

(1) According to the lawsuit:

• "Defendants' entire business model and operation is founded on the idea of defrauding unwitting homeowners, including plaintiff, of significant sums of money for purporting to do legal work on said homeowners' behalf, when in fact the 'legal work' being done by defendants is simply the filing of an ill-assembled compilation of plagiarized pleadings which defendants bastardized in order to defraud banks of monies rightfully owed and create undue delay and expense to all parties involved in the lawsuits filed by defendants."

Stress, Nerves, Depression Caused By Foreclosing On Friends, Neighbors Forces Metro Atlanta Tax Commissioner Into Premature Retirement

In Cherokee County, Georgia, The Atlanta Journal Constitution reports:

• Acid reflux gnawed at David Fields’ gut. Sleep came in fits. The waking hours were worse, as he battled depression with medications. Inevitably, the antidepressants failed to temper the toll taken by a job he once loved and now feared would kill him: Cherokee County tax commissioner.

• “My doctor told me, ‘If you don’t quit, you’re going to have a stroke or heart attack,' ” Fields said Monday, explaining why, after 28 years, he resigned from his post with two years left on his term.

• Fields, 62, became a poignant reminder of the housing bust’s impact on thousands of lives across metro Atlanta, where almost 100,000 properties were foreclosed on in 2010. Property owners are not the only ones hurt; so are people, such as Fields, at the end of a ruinous process set in motion by recession.

• “I was foreclosing on the homes of people I have known my entire life,” Fields said Monday, two weeks after he walked away from his job but still carrying its burden. “I tried to do all I could to help them. But there’s only so much you can do. Your job is to collect taxes.”

***

• Fields said he didn't feel he could do the job he was elected to do. “I felt like I was letting everybody down," he said, "the people who were losing their homes and the county I was supposed to represent."

• Doctors, specialists, did all kinds of tests on Fields. “They checked the lining of my stomach, and it was so irritated, they did biopsies," he said. "They concluded it was a combination of stress, nerves and depression. My job was getting to me.”

• Too many “hardworking people” he’d known his entire life, out of work and out of savings, were asking for more time to pay their property taxes, he said. “There was nothing I could do.”

For the story, see Cherokee tax chief quits to avoid foreclosing on more friends.

Ex-Foreclosure King's Orphaned Cases Clog Courts, Cause Chaos, Lead To Defective Public Sales

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

• Nearly four months after the collapse of the Law Offices of David J. Stern, orphaned foreclosure cases still clutter the courts, causing auction uncertainty and more work for an already overwhelmed system.

• Between Jan. 1 and Feb. 17, 74 homes were sold to the highest bidder during Palm Beach County's daily online foreclosure auctions with no one representing the bank. All but three of the cases were at some point handled by Stern's office, which lost a substantial amount of its foreclosure work in the fall following allegations that cases were mishandled.

• Many of the auctioned homes were also sold without the required advertising. By law, the auction must be advertised once a week for two consecutive weeks. With the firing of the Fort Lauderdale-based law firm Ben-Ezra & Katz this month by mortgage giant Fannie Mae, more cases may go astray. "The possibility is there," said Palm Beach County Clerk of Court Sharon Bock, whose office oversees the county's auction system.

• In auctions where the banks are not represented, it's usually an investor who places the winning bid. They may believe they're getting a great deal because the homes often sell for a fraction of the foreclosure judgment.

• On Jan. 5, a Jupiter home with a $817,969 judgment against it, and valued by the Palm Beach County Property Appraiser at $337,603, was sold to an investor for $30,400. But more often than not, the buyer finds out that the sale wasn't advertised properly and the clerk can't issue a certificate of sale. In the Jupiter case, the court docket shows no proof of publication filed before the sale.

• When that happens, the buyer has to petition the court to set aside the sale, which goes to a hearing, and then the clerk issues a refund. Bock estimates it takes one hour to handle each case where a refund must be issued. With 74 cases already this year, that's nearly two weeks of work for a full-time employee.

***

• It's not always the investor who loses out. On Jan. 5, a Lake Worth home with a $125,437 judgment against it was bought by an investor for $30,200. The bank asked the court to vacate the sale because it wasn't represented at auction and "the third party bid of $30,200 is grossly inadequate in light of the final judgment amount."

• The judge denied the request, allowing the investor to keep the home. "If anyone has a bone to pick, it would be the plaintiffs," Bock said about the auction problems.

For more, see Foreclosed homes from collapsed law firm still clogging Palm Beach County courts.

Mediators: Lenders, Foreclosure Mills Stifle System By Pressuring Loan Modification Negotiations To End In Stalemate

The Palm Beach Post reports:

• Florida's Supreme Court sought a foreclosure lifeline in forcing banks and borrowers to mediation. It was hoped a judicial referee could help unclog court dockets and free struggling borrowers.

• But in documents obtained by The Palm Beach Post and described in a recent court order, mediators complain lenders and their attorneys are stifling the system by pressuring negotiations to end in a stalemate.

• In some cases, mediators report that deals were struck for trial payment plans or to seek a loan modification, but that banks or their attorneys asked for the meeting to be recorded as an impasse. The motive for a deadlock, homeowner advocates say, is money. Declaring a different outcome stalls the process and could mean a return to mediation if an agreement falls through. At the same time, several of the state's large foreclosure law firms also run title companies, which can pick up business when a home is repossessed.

For more, see Foreclosure mediators: Banks pushed us to fail.

Houston Woman Accuses Duo Of Filing Forged Deed In Attempt To Steal Her Property

In Houston, Texas, Ultimate Aldine reports:

• A woman is suing after, she says, two men conspired to file a forged deed with the courts. Julie Fanner filed a lawsuit on Feb. 14 in the Harris County District Court against Larry Jackson of Aldine and Hosea Harris Jr., alleging fraudulent claim against real property and conspiracy to defraud.

• Fanner says that the defendants unlawfully conspired to forge and to file a deed regarding her property, located at 207 E. 38th St. in Houston. According to the brief, the deed filed by the defendants is void and should be set aside, clearing title for Fanner.

• Fanner is seeking a decree quieting title in her name, actual, punitive and statutory damages, as well as attorney’s fees and court costs. She is being represented in the case by Pasadena attorney Jason Castaneda. Harris County District Court Case No. 2011-09369.

Source: Aldine resident named in cloudy title suit.

BofA Calls Off Foreclosure Of Atlanta Woman's Home As BofA Caves To Pressure From Local Media

In Atlanta, Georgia, WSB-TV Channel 2 reports:

• Channel 2 Action News got results for a southeast Atlanta widow threatened with foreclosure even though her mortgage was nearly paid off. "They do need to call me back really quickly because like I said, Channel 2 is already here," said housing advocate Simone Griffin. She was on the phone with a vice president of Bank of America.

• In a subsequent call, Griffin learned 64-year-old Mary Dixon's home would not be put up for sale March 1 after all. "I pray God make a way, … don't let me lose my home," Dixon said prior to the news that her home wouldn’t be put up for foreclosure.

• Channel 2 Action News consumer investigator Jim Strickland joined counselors from HomeFree-USA, digging through paperwork on Dixon's application for a reverse mortgage. Since the program would help her turn her equity into cash, Dixon said the bank advised not to bother making any more payments. "I didn't hear anything, so I figured I'd better see what's going on with my house," she recalled. Dixon said she found out months later that the house had declined in value and that the deal was off.

• That's when she tried to make the payments the bank had advised her to skip. "I got the money to pay my note up, but they wouldn't let me pay my note up," Dixon said. Instead, foreclosure notices came.

• With fees and penalties, her balance of $13,300 was up to more than $16,000 by December. Weeks later, a second letter from a foreclosure attorney placed the balance at more than $19,000. "To me, they are trying to take away from me, trying to take my house," Dixon said. Strickland found a receipt for the last payment Dixon made, and overheard the bank vice president admit they had no record of it.

• Moments later, the bank official vowed to stop the sale. Dixon's confident it will get straightened out. "I'm not nervous about it because if it's wrong, it's wrong," she said. Messages for the loan officer and bank representatives were not returned.

Source: Foreclosure Halted After Channel 2 Gets Involved.

"Revolving Door" Between Wall Street & Government Regulators; Are Suit Settlements Management's Way Of Buying Its Way Off Cheap From Victims' Pockets?

Columnist Matt Taibbi writes in Rolling Stone:

• Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer. "Everything's [*]ucked up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."

• I put down my notebook. "Just that?" "That's right," he said, signaling to the waitress for the check. "Everything's [*]ucked up, and nobody goes to jail. You can end the piece right there."

• Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

***

• [F]ederal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs that involve the firms paying pathetically small fines without even being required to admit wrongdoing.

• To add insult to injury, the people who actually committed the crimes almost never pay the fines themselves; banks caught defrauding their shareholders often use shareholder money to foot the tab of justice. "If the allegations in these settlements are true," says Jed Rakoff, a federal judge in the Southern District of New York, "it's management buying its way off cheap, from the pockets of their victims."(1)

For more, see Why Isn't Wall Street in Jail? (Financial crooks brought down the world's economy — but the feds are doing more to protect them than to prosecute them) (go here for the entire story on one web page).

Go here for a recent MSNBC interview with Matt Taibbi about his recent column.

Thanks to Harold for the heads-up on this story.

(1) One notable excerpt from the column:

• "You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bull[*]hit would stop, all over Wall Street," says a former congressional aide. "That's all it would take. Just once." But that hasn't happened. Because the entire system set up to monitor and regulate Wall Street is [*]ucked up.

Pro Se Kentucky Homeowner Scores Appeals Court Reversal Of Rubber-Stamped Foreclosure Judgment As Trial Judge Proves Unable To Apply Basic State Law

In a seemingly simple case that a lower court inexplicably screwed up, the Kentucky Court of Appeals found it necessary to vacate and remand Henry County Circuit Court Judge Karen Conrad's ruling allowing for the entry of a judgment in a foreclosure action, despite the obvious fact that the foreclosing plaintiff, by failing to acquire an interest in the loan (by assignment) until after the action was filed, did not have standing to bring the action under Kentucky law. Along with the remand, Judge Conrad has been given instructions to remove this case from her docket.

The fact that the appeals court's legal analysis of the case before it was only three paragraphs long(1) and was issued by the 3-judge panel as an unpublished ruling only highlights the fact that there is apparently nothing particularly precedent-setting in this ruling. However, the ruling does merit attention in that it shines some light on another trial judge getting snagged screwing over a pro se homeowner battling to save his home from foreclosure, apparently without regard by the judge to the existing case law and procedural rules in the state.

For the ruling, see Augenstein v. Deutsche National Trust Co., No. 2009-CA-000058-MR (Ky. App. February 18, 2011) (unpublished).

Thanks to Glenn Augenstein for the heads-up on his successful appeal.

(1) The court's 'short & sweet' analysis follows (bold text is my emphasis, not in the original text):

• Glenn argues that the court erred by exercising particular case jurisdiction over this claim because Deutsche Bank did not have standing. He contends that the assignment of mortgage was not executed in favor of Deutsche Bank until after the complaint was filed. Thus, Glenn argues, that Deutsche Bank failed to show that it was the real party in interest at the time the action was commenced.
  
  CR 17.01 provides that “every action shall be prosecuted in the name of the real party in interest, but…an assignee for the benefit of creditors… may bring an action…” It follows that, where a cause of action has been assigned, the assignee becomes the real party in interest. See CR 17.01. However, “[i]n no event may an assignee maintain an action for any part of a claim which has not been assigned to him.” Works v. Winkle, 234 S.W.2d 312, 315 (Ky. App. 1950). A mere expectancy is not enough to establish standing, a party must prove a “present or substantial interest.” Plaza B.V. v. Stephens, 913 S.W.2d 319, 322 (Ky. 1996) (quoting Ashland v. Ashland F.O.P. No.3, Inc., 888 S.W.2d 667 (Ky. 1994)).
  
  In this case, the complaint was filed on December 17, 2007, but the assignment of mortgage was not executed until January 3, 2008. Thus, Deutsche Bank had no present interest when it filed its complaint and failed to take any steps to correct this. Allowing Deutsche Bank to commence this action at a time when it lacked standing impermissibly allowed litigation to commence based upon mere expectancy of an interest. See Plaza B.V., 913 S.W.2d at 322. Accordingly, the trial court erred when it did so; thus, it should not have entered summary judgment for Deutsche Bank. This issue being dispositive of the appeal, we decline to review the remainder of Glenn’s arguments.
  
  In light of our analysis, we vacate the entry of summary judgment because Deutsche Bank did not have standing to commence this action when it did. This matter is therefore remanded to the circuit court for the purpose of entering an order consistent with this opinion removing this case from its docket.
  
  ALL CONCUR.

Editor's Note: While it may be acceptable for the foreclosing entity to obtain the assignment after the case commences in some states, this apparently is not the case in Kentucky, based on this ruling.

Confusion Caused By Suspicious Deed Conveying Fractional Interests To Bankrupt People Recorded Day Before F'closure Enough To Void Subsequent Sale

In Fresno, California, The Fresno Bee reports:

• A bankruptcy judge on Wednesday reversed the foreclosure of the landmark Security Bank building on Fresno's Fulton Mall, giving its owners more time to find a buyer or settle its debts. Judge Whitney Rimel agreed with the building's owners, Fresno Pacific Towers Inc., that the foreclosure by East West Bank was tainted by a forged deed of trust and proceedings in another bankruptcy case in Los Angeles.

• Fresno Pacific Towers owes $5.2 million to East West Bank, and filed for bankruptcy on Jan. 18 to try to prevent the bank from foreclosing. But the bank held a foreclosure auction later that day for the 16-story, 86-year-old building. The bank was the only bidder, with an offer of $1.9 million. Within hours, the bank recorded a title change with the county.

• Rimel's ruling will force East West Bank to reconvey the title back to the ownership group. In a statement Wednesday evening, building co-owner and manager Saundra King said she was grateful for the ruling.

***

• Ravi Jain, an attorney for Fresno Pacific Towers Inc., said East West Bank received approval for the foreclosure from another bankruptcy court based on a forged second deed. That deed -- recorded in Fresno County -- assigned interest in the building to several parties who had filed for bankruptcy in Los Angeles last summer.

• Fresno Pacific Towers president John E. King testified Wednesday that the signature on the deed was not his. He and his sister, Saundra King, both said they knew nothing about the Los Angeles bankruptcy case until after the building was foreclosed.

• But there were earlier signs of trouble. East West Bank declared the building in default last summer, and a foreclosure sale was initially set for Nov. 18.

• Saundra King testified that on Nov. 16, she hired a Southern California firm, ASND Inc., to try to delay the sale. She said she and her brother sought more time to find a buyer and settle their debt to East West Bank before the bank foreclosed. King said she paid ASND about $5,000 in advance.

• On Nov. 17, a day after King hired ASND and a day before the auction, the forged deed was filed with the Fresno County Recorder's Office. The Nov. 18 auction was postponed, and an auctioneer said the delay was because of a bankruptcy filing. According to Jain, the auctioneer was referring to the Los Angeles bankruptcy case.

• Saundra King said she didn't learn about the forged deed until later in November. But she said "it didn't click that there would be a connection" between the document and ASND. She said she soon reported the forged deed to federal law-enforcement investigators.

• A second auction date in December was also canceled, again because of a bankruptcy which King said she knew nothing about. The Kings said it wasn't until January, after the bank took back the building, that they learned that there was a bankruptcy case in Los Angeles and a court order allowing East West Bank to foreclose.

• East West Bank's attorney, Thomas Geher, told the court it was obvious that ASND acted as an agent for the Kings and filed the fraudulent deed as a stalling tactic. "To believe ASND is not behind this is naive," Geher said. "The deed of trust was filed when the contract was signed," he added. "That's no coincidence. ... The debtor put all this in motion."

• Rimel, however, gave the benefit of the doubt to the Kings and said she "cannot conclude fraudulent intent by Mr. or Ms. King." She said the Kings' contract with ASND, resembles "foreclosure prevention schemes ... that have taken advantage of hundreds of thousands of people."(1) Because Fresno Pacific Towers Inc. was never notified of the Los Angeles proceedings, Rimel added, the owners were deprived of an opportunity to argue against the foreclosure order in that case.

For the story, see Fresno landmark's foreclosure reversed (Owners of Security Bank get time to find buyer or settle debt).

(1) The hiring of a foreclosure rescue operator on the eve of a foreclosure sale to stall the sale in exchange for a payment of $5,000, coupled with the almost immediate recording of a suspicious deed of trust to multiple people who are already involved in ongoing bankruptcy proceedings in another jurisdiction certainly points to a possible fractional interest deed transfer, foreclosure rescue bankruptcy scam, as Judge Rimel correctly points out.

See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure scams involving the abuse of the bankruptcy courts.

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

Pressure On "Absurd" MERS' Business Model Continues In Metro NYC Cases; CEO Abandons Sinking Ship; Members Told To Stop Foreclosing In Company Name

The New York Post reports:

• The feds are raising their scrutiny of foreclosure cases in the Metro area. The US Trustee's office, which is a division of the Justice Department, is filing briefs in individual cases asking for judges to disallow motions made by the bank or servicer, and for lenders to cough up supporting data for their filings.

• In a recent Brooklyn case, the US Trustee asked Judge Shelley C. Chapman of the US Bankruptcy Court to disallow a motion by the alleged mortgage holder for confidentiality on the paperwork required to show the servicer had standing to bring the foreclosure action.

• Earlier this month, US Bankruptcy Judge Robert E. Grossman of New York's Eastern District on Long Island laid a new, homeowner-friendly legal foundation for upcoming battles over the 65 million home loans -- half the consumer mortgages in the US -- the Mortgage Electronic Registration Systems, or MERS, claims it holds.

***

• MERS tried to throw its weight around in court in the case of Westbury resident Ferrel Agard. It failed. In a 37-page decision, the judge shredded MERS' arguments, noting the court isn't going to turn a blind eye to failure to comply with the law just because MERS is an industry titan.(1)

• Judge Grossman questioned the very core of MERS' business model, calling it "absurd at best" that MERS claims to be both a mortgagee and an agent of the mortgagee, and saying MERS has no right to transfer mortgages.

• This legal challenge adds to a growing list of problems for MERS. R.K. Arnold, CEO, departed late last month, and MERS now plans to change its rules to require "Members to not foreclose in MERS' name," according a Feb. 16 announcement obtained by The Post.

Source: Feds step up bank probes on foreclosure.

(1) In re Agard, Case 8-10-77338-reg (Bankr. E.D.N.Y. February 10, 2011).

Utah AG To Federal Appeals Court: BofA Sub Legally "Unqualified To Carry Out Trustee Foreclosures"

Bloomberg reports:

• A Bank of America Corp. unit is breaking the law by foreclosing on homeowners in Utah because it doesn’t meet state requirements, the state attorney general’s office said in a federal appeals court case.

• ReconTrust Co., a subsidiary of Bank of America, the biggest U.S. lender by assets, isn’t a member of the state bar or a title insurance company and is unqualified to carry out trustee foreclosures, Utah Attorney General Mark Shurtleff wrote in court papers filed yesterday with the U.S. Court of Appeals in Denver. “ReconTrust Co. N.A. is a non-depository national bank initiating approximately 4,000 home foreclosures in Utah each year in violation of Utah law,” the attorney general’s office said.

• The court filing was made in a homeowner’s lawsuit against ReconTrust and Bank of America. “National banks must abide by state law,” said John Christian Barlow, an attorney for the homeowner, Peni Cox. “ReconTrust just wants to foreclose, period,” he said.

• A Utah state judge issued an injunction last year blocking ReconTrust from trustee foreclosure sales in the state, Barlow said. A federal judge later lifted the injunction.

For more, see BofA Unit’s Utah Foreclosures Violate Law, State Says.

Homeowner Scores Judgment Against Loan Servicer In RESPA Suit, Forcing Bank Into Foreclosure

In Philadelphia, Pennsylvania, The Philadelphia Inquirer reports:

• It's not clear how this story will turn out, but right now Patrick Rodgers is living a pay-back fantasy probably shared by millions of struggling U.S. homeowners. Frustrated by a dispute with Wells Fargo Home Mortgage and by his inability to get answers to questions, the West Philadelphia homeowner took the mortgage company to court last fall.

• When Wells Fargo still didn't respond, Rodgers got a $1,000 default judgment against it for failing to answer his formal questions, as required by a federal law called the Real Estate Settlement Procedures Act. And when the mortgage company didn't pay - does something sound familiar? - Rodgers turned to Philadelphia's sheriff.

• The result: At least for the moment, the contents of Wells Fargo Home Mortgage, 1341 N. Delaware Ave., are scheduled for sheriff's sale on March 4 to satisfy the judgment and pay about $200 for court and sheriff's costs.

For more, see Phila. homeowner wins judgment against Wells Fargo over mortgage fees.

Texas Man Cops Guilty Plea To Real Estate Ponzi Scheme Using Bogus Liens, Deeds Of Trust To Purportedly Secure Investors' Cash

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

• David Boles, 52, of Colleyville, Texas, who owned Metro Buy Homes, LLC., pleaded guilty [...] to one count of mail fraud, announced U.S. Attorney James T. Jacks of the Northern District of Texas.

***

• According to documents filed in the case, from January 2008 through August 2010, Boles ran a scheme to defraud a number of investors by making materially false representations to them. For instance, he advised that invested money would be used to buy real estate and that investments would be secured by real estate.

• To further the scheme, Boles sent Deeds of Trust and Real Estate Liens that purportedly gave investors liens against specific properties in exchange for their investment. However, Boles did not own a number of the properties that were supposedly used to secure the investments, and some of the Deeds of Trust and Real Estate Lien Notes that he sent investors were fraudulent.

• Boles also sent checks to investors, and advised them that the checks represented profits from their investments. However, in many cases the checks were simply drawn from the principal investments made by the investor. On other occasions, Boles funded checks written to one investor with money received from other investors.(1) Boles believed that telling the investors that the checks represented earnings on their investments would encourage them to invest more money.

For the U.S. Attorney press release, see Colleyville, Texas Businessman, Who Owned Metro Buys Homes, Pleads Guilty To Federal Mail Fraud Charge (Defendant Faces Up to 20 Years in Federal Prison).

(1) A classic "Ponzi Scheme."

Probe Into Title Escrow Money Ripoff Yields Guilty Plea; Suspect To Cough Up $25K In Restitution Within One Month To 'Buy Out' Of Prison Sentence

In Allen County, Indiana, The Journal Gazette reports:

• A mortgage company manager pleaded guilty Thursday in Allen Superior Court to two Class D felony charges of loan broker fraud. Robin W. Hunt, 40, of [...] New Haven, was arrested and charged last July with six counts of loan broker fraud, two of which were Class C felonies. He and an associate, Lane Miller, were charged in connection with the investigation into title escrow scheme run by Joseph Garretson. Miller worked for Garretson, currently serving an 11-year prison sentence for misappropriating title escrow money.

• According to the plea agreement, Hunt’s prison sentence of one year will be suspended and he will be placed on probation when he is sentenced late next month. However, he will have to pay $25,000 in restitution to Flagstar Bank before he is sentenced, according to court documents.

Source: Broker pleads guilty.

Ex-Mortgage Broker Faces 39 Counts For Allegedly Ripping Off Clients Of $1.3M Cash, Property

In Santa Cruz, California, the Santa Cruz Sentinel reports:

• Louisa Katrina Dubinsky, the 54-year-old former real estate broker who allegedly stole more than $500,000 from clients in 2007, turned herself in to Santa Cruz police [...]. Dubinsky was wanted on 39 counts of embezzlement, financial elder abuse and writing hundreds of thousands of dollars in bad checks, according to a 2009 criminal complaint filed by the District Attorney's Office.

***

• Dubinsky was president of Vision Lending & Investment with offices on 41st Avenue in Capitola and at the Sash Mill in Santa Cruz, authorities said. She had been a mortgage broker, and her license was revoked by state officials in 2008.

• Among other charges, the complaint alleges that she wrote two checks she knew were fraudulent that totaled $726,564 to one person and two that totaled $375,000 to another person. Dubinsky showed a pattern of criminal conduct and stole more than $500,000, prosecutors said, and she also allegedly took property valued at more than $200,000.

For the story, see Local 'Most Wanted' broker, Louisa Dubinsky, turns herself in to Santa Cruz police.