Detroit City Council President Facing Foreclosure Again After Receiving Mod

Pugh likely to walk away from mortgage on Brush Park condo

Robert Snell, Detroit News

Charles Pugh Foreclosure

Detroit City Council President Charles Pugh

City Council President Charles Pugh is facing foreclosure and says he likely will abandon his $385,000 Brush Park condominium.

His personal financial struggles come as he and council colleagues fight to bail Detroit out of its own fiscal crisis.

On Friday, Pugh said he can’t afford to pay his mortgage after taking a pay cut and leaving a high-paying TV career to run for the City Council.

“Making my mortgage payments has been a struggle for me,” Pugh wrote in an email. “I fought hard to stay in my condo because I had an attachment to it, but I can no longer afford to do so.”

The mortgage issue is the latest financial problem facing Pugh, 40, a former Fox 2 television anchor and radio show host who was the top vote-getter in the 2009 election. He is paid $76,500 as council president.

“I am devoted to this city and helping us to move forward despite wage cuts and personal sacrifices such as foreclosing on my own home,” Pugh said. “These are the tough choices Detroiters make every day, and I am no different.”

Pugh is still living in the condo and would like to keep it, but he needs a “substantial decrease” in the mortgage, spokeswoman Kirsten Ussery said.

“Absent that, yes, he is going to walk away,” she said.

Pugh’s mortgage situation raises questions about how he can lead the council during the financial crisis, local political consultant Adolph Mongo said.

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Fired in scandal, former assistant AG on ethics panel

The robo-signed signatures of Erin Cullaro

The Florida AG’s office had reprimanded Cullaro in 2010 for notarizing documents on behalf of foreclosure mill, Florida Default Law Group, which has been accused of  robo-signing.

Shannon Behnken, Tampa Tribune

Erin Cullaro, a former assistant Florida attorney general who was fired last year after moonlighting for a “foreclosure mill,” continues to serve on a state committee that investigates other lawyers for ethical violations.

Some lawyers and consumer advocates question whether such a position of authority with the Florida Bar is appropriate.

“The bar’s self monitoring leaves much to be desired,” said Lisa Epstein, of Foreclosure Hamlet.org, which tracks cases of foreclosure fraud.

Cullaro, who worked for the attorney general’s economic crimes division in Tampa, was fired in April following a formal reprimand by Gov. Rick Scott’s office, which questioned variations of her signature on legal documents.

The attorney general’s office had reprimanded Cullaro in 2010 for notarizing documents on behalf of a “foreclosure mill” that the office was investigating. The firm, Florida Default Law Group, was suspected of “fabricating and/or presenting false and misleading documents in foreclosure cases.”

Cullaro worked full time with the firm before joining the attorney general’s staff. She continued to do notary work for the office after she was hired by the state – with the permission of her new employer.

In April 2008, the attorney general’s office signed off on Cullaro’s dual employment, allowing her to notarize Florida Default Law Group documents for 15 minutes a day, three days a week.

But according to the written reprimand, Cullaro failed to renew the application for the new fiscal year, “which would have alerted the (attorney general’s office) to your continued outside employment and accurately reflected the time commitment involved.”

Scott’s office also questioned the signature used to notarize Florida Default Law Group affidavits of “reasonable attorney fees.” The signature varied widely in some cases from the one she was commissioned to use, according to a letter from Scott’s office.

In addition, the reprimand states, “your continued dual employment created an appearance of impropriety” because the attorney general’s office was looking into the practices of foreclosure law firms.

Ricardo A. Roig, a Tampa lawyer who represents Cullaro, said he doesn’t see what the allegations against her have to do with her role on the Florida Bar committee.

“It was never found that she did anything unethical,” Roig said.

The bar agrees with Roig.

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Massachusetts foreclosures surge 70 percent in November

Ira Kantor, Boston Herald

Foreclosures in Massachusetts rose more than 70 percent in November from the same time last year, a real estate tracker reported today.

A total of 714 foreclosure deeds were recorded last month, up from 418 deeds in November 2010. However, year-to-date foreclosure deeds are down, said The Warren Group of Boston.

A total of 7,685 foreclosure deeds have been completed this year, down nearly 35 percent from 11,752 deeds recorded during the same period last year.

“An increase in foreclosure deeds tells us that the backlog of foreclosures is moving through the process,” Timothy M. Warren Jr., CEO of The Warren Group, said in a statement. “The modest decline in petitions could indicate that an improving employment picture is leading to fewer mortgage delinquencies.”

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Details of Mortgage Settlement Between Banks and AGs Begin to Emerge

Massimo Calabresi, Time Magazine

Iowa AG Tom Miller

The never-ending negotiations between the 50 state attorneys general (minus a few big ones) and five major banks over penalties and standards for past, present and future mortgage servicing are finally ending, and some details are beginning to emerge from sources familiar with the deal. The big number is the $25 billion that the banks will commit to three categories of the settlement: $5 billion in cash payments, mostly to the states, $3 billion in refinancing for underwater mortgages, and $17 billion in principal reduction. Here’s the breakdown:

Of the $5 billion, $1.5 billion will go to people who have been foreclosed on and were abused in some way during the process. The claims are nearly instantaneous–”we don’t read anything, it’s check the box,” says one state AG negotiator. But the payments are also small: $1,500 to $2,000. Now, the vast majority of people who lost their homes over the last several years probably would not have been able to make their payments even if the banks had been behaving well. For them a no-questions-asked $2,000 check from the bank for the poor treatment they received in the process may be fair. On the other hand, those who were unfairly evicted may be insulted by the small amount. But no one taking the payment would be giving up any rights to bring cases against the banks for wrongful eviction or other claims they may have. The federal regulator with oversight of the issue, the Office of the Comptroller of the Currency, has sent out 4.5 million forms to potentially wrongfully evicted families; processing those claims will be paid for by the banks.

Around $2.75 billion of the $5 billion in cash the banks are coughing up will go to state programs for foreclosure mitigation efforts like legal aid hotlines, mediation between homeowners and banks and counseling. Some $750 million to the federal government for its foreclosure mitigation programs.

The $3 billion for refinancing underwater loans targets a limited population: only those who are current on their payments and who have been current for several months. The Obama administration has launched its own less-than-ambitious program in this regard. Mortgage refis tend to help those who need it least–particularly if they’re limited to people who are current on their payments. Refis also only reduce interest payments, not the actual value of the underlying loan.

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