Raging against the foreclosure machine

‘Kafkaesque’ nightmares plague homeowners facing foreclosure

Ben Hallman, iWatch News

Like millions of stories from the great recession, this one begins with homeowners struggling to keep up with a mortgage payment they simply couldn’t afford.

By 2009, the adjustable interest rate for Cassandra and Bernard Gray’s Durham, N.C., home loan had spiked to more than 12 percent. “I didn’t know if we were going to be on the street or in a shelter,” Cassandra recalls. “We couldn’t afford groceries. It got pretty bad.”

They were thrilled to sign up for a modification plan with their loan servicer, GMAC Home Mortgage, Cassandra Gray said.

The modification lowered their payment from $1,128 to $768 per month. But after three months, GMAC began returning their payments, the Grays claim in a complaint filed with the North Carolina Commissioner of Banks.

GMAC customer service representatives told them there was a “computer glitch” and that the problem would be resolved. Instead, GMAC twice started a foreclosure action.

GMAC claimed it had no record of any payment being received. The Grays have submitted bank statements that appear to show GMAC returning the $768 payment — several times. GMAC has since assessed more than $20,000 in interest and fees.

“I thought I was doing the correct thing” by obtaining a loan modification, Cassandra Gray said in a recent interview. “But I came home one day and there was a foreclosure notice on my door and a sign in my yard. I called constantly, but it was as if the dots were not connecting.”

A North Carolina clerk of court recently dismissed the foreclosure on grounds that GMAC had not properly demonstrated that it had standing to bring a foreclosure. But once GMAC gets its documentation in order, the loan servicer can foreclose again.

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Karen Gullo, Bloomberg

Bank of America Corp. is impeding an investigation of its loan modification practices by negotiating settlements with borrowers who must agree to keep them secret and not criticize the bank in exchange for cash payments and loan relief, Arizona officials say.

The Arizona Attorney General’s office is asking a court to block those aspects of the settlements and require the bank to turn over all the agreements. The bank denies any wrongdoing.

One 2011 accord involving a borrower facing foreclosure who defaulted on a $253,142 mortgage included a $5,000 payment, plus $7,500 for legal fees, and the defaulted payments were waived and the loan was modified to a 40-year term with a 2 percent interest rate, court documents show. The terms of the original loan and the borrower’s complaint about the lender weren’t described in the documents.

The borrower “will remove and delete any online statements regarding this dispute, including, without limitation, postings on Facebook, Twitter and similar websites,” and not make any statements “that defame, disparage or in any way criticize” the bank’s reputation, practices or conduct, according to documents filed in state court in Phoenix. The borrower’s name and address were redacted.

Non-Disparagement

Bank of America attorneys argue that borrowers don’t have to sign the agreements to get a loan modification and deny that settlements hinder the state’s probe. Borrowers can be subpoenaed to disclose the accords, and the Charlotte, North Carolina-based bank won’t enforce the non-disparagement provision if they talk to investigators, the bank’s lawyers have said in court filings.

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A family loses their home to tax foreclosure and then one day a mysterious stranger comes to the door claiming to be the new owner and demands $5500 or he will throw them out the next day.  The mysterious stranger is actually a violent ex-felon with connections to a real estate investment firm owned by a prison minister who counseled the scammer in prison and now the minister and his wife are defending the scammer.

Rob Wolchek from Fox2 in Detroit tries to get to the bottom of this:

Ex-Convict Accused of a Dirty ‘Deed’: MyFoxDETROIT.com

David Lam, the last of Carol Asbury’s partners in a mortgage fraud scheme involving fraudulent appraisals and straw buying pled guilty to charges of conspiracy to commit mail and wire fraud and conspiracy to commit money laundering in relation to a home sales scheme in Wellington’s Versailles community. The scheme led to sales worth more than $15 million in mortgage loans on 12 Versailles homes and more than $5 million in fraudulent loan proceeds.

Carol Asbury, former assistant state attorney and former owner of the website, 4closurefraud.org and three co-defendants have already pled guilty guilty and have been sentenced.

Bank of America’s cash-back incentive, which tempted delinquent borrowers to do a short sale over a lengthy foreclosure, ended Dec. 12 with mixed reviews from Realtors and tepid homeowner response.

The Florida-only program offered between $5,000 and $20,000 in relocation expenses to qualified homeowners who agreed to vacate their homes through a short sale in lieu of the average two-year foreclosure process.

But as of early December, only about 3,000 homeowners of 20,000 solicited by the bank had expressed interest in the plan, which one real estate consultant said was unthinkable before the robo-signing scandal heightened the foreclosure chaos.

“A year ago, banks weren’t making offers like this. Now, it’s a complete reversal in that they are proactively soliciting short sales,” said Jack McCabe, chief executive of McCabe Research & Consulting in Deerfield Beach. “They are offering unbelievable deals.”

A short sale is when a lender agrees to accept less for a home than what is owed on the mortgage. Sometimes, the bank also will agree to waive the deficiency judgment – money still owed by the home­owner on the mortgage debt.

Realtors say banks, including Wells Fargo and JPMorgan Chase, began offering cash incentives about six months ago to homeowners who agree to do short sales. With foreclosures taking an average of 749 days in Florida, according to a November RealtyTrac report, it’s cheaper to pay off an owner than take them to court, Realtors say.

“It’s costing banks a fortune to do the foreclosure, and they want to cut their losses,” said Sherry Lee, broker/owner of Lee Property Sales in West Palm Beach.

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This is a story for the ages… you want crazy, I’ve got crazy.

Remember attorney Mitchell J. Stein?  His law office was shut down along with the the law offices of Kramer & Kaslow.  Stein filed the first lawsuit against Bank of America that came to be know as a “mass joinder,” or multi-plaintiff suit… Ronald v. Bank of America.

When I first called Mitchell Stein to find out what he was up to, I discovered that coincidentally, he went to my high school.  He was two years older than me, so he didn’t remember me, but I did remember him.  And he seemed like a smart trial lawyer who certainly talked like he was dedicated to fighting for the rights of homeowners against the banks.  He said that many of his clients were pro bono and contingency cases, where the homeowners were paying nothing.  I never listed him on my “Trusted Attorneys” tab… because I just didn’t know him long enough… but I did try to keep tabs on him.

Then this past September, I believe, both he and Kramer got shut down by the State Bar and AG, the allegations being that they were “running and capping,” essentially meaning that they were paying non-lawyers sales commissions.  Kramer continues to deny that happened, and I suppose we’ll have to wait to see what evidence is presented at trial to be sure one way or the other.  Stein, on the other hand, not only denied any involvement with Kramer’s marketing, but further said that he had never received any funds from that marketing… and to-date, I haven’t seen any evidence that he did.  So, I was waiting to see how all that came out, as well.

But… never mind all that… in fact, as far as Stein is concerned, it’s pretty much mass-smash… joinder-schmoinder.

Okay, ready for this?  I wasn’t.

Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division announced today that attorney Mitchell J. Stein was arrested on Sunday, December 18, 2011, at Los Angeles International Airport on charges related to his alleged role in a multi-million dollar market manipulation stock fraud scheme.  Stein was arrested for his role as attorney for a South Carolina health care device company, Signalife… now known as Heart Tronics.

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One of the men linked to a real estate scheme exposed by a Channel 2 Action News investigation, pleaded guilty to racketeering Tuesday.

Kenith Beniaih Rey admitted trying to steal a $2 million home in Sandy Springs. It was still under construction when he filed a quit claim deed in his name, turned on the power and alarm system, and moved in an armchair and suitcases.

“He was also involved with a co-defendant who was deeply engrained in the organization, a man by the name of Richard Terrance Jenkins,” prosecutor John Melvin told the judge.

Jenkins sat watching in the courtroom. He and Rey were indicted in March along with 10 others. Jenkins is accused of trying to steal six houses. Rey said he was just interested in acquiring foreclosed houses and that Jenkins roped him into the scheme.

“They began to show me some of the properties that they had. I decided to acquire his services,” Rey said.

But the homeowner was able to escape foreclosure, found Rey’s belongings and called Sandy Springs Police.

“It was one home that was an abandoned foreclosure that I was trying to acquire. He was like ‘let me show you how to acquire it,’ and we went down to the courthouse and filed documents which he had provided,” Rey said.

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An anti-government bully was sentenced Monday to five years in federal prison for using fake bills, bogus property liens and bizarre court filings to attack Ulster County bankers and government officials.

Richard Ulloa, 52, was sentenced on seven counts of mail fraud for using the U.S. Postal Service to deliver phony bills and liens that threatened to harm the credit of bankers and public officials.

The tactic is known as “paper terrorism.”

Ulloa remained defiant till the end. Even though he filed roughly $4 trillion in liens and bills against police, judges and county employees, Ulloa told a judge in Albany that it was he who lost more than anyone.

“I lost a job, I lost a business and I lost property,” said Ulloa, who once earned more than $180,000 a year as an IBM engineer. “I have lost more than anybody else.”

Ulloa, of Stone Ridge, is a member of the sovereign citizens, a national movement of radicals who do not believe the government has the right to create or enforce laws.

His anti-government scheme took many turns. It started in 2008, when the Mid-Hudson Valley Federal Credit Union began foreclosure proceedings on his Ridge Mountain Road home. Ulloa responded by sending a “criminal complaint” to the bank, demanding $46 million from its officers.

When the bank didn’t pay, he filed a $2.8 billion lien against bank CEO Bill Spearman.

The pattern repeated itself twice more, when Ulloa was issued traffic tickets in Rosendale and the Town of Ulster. He filed bills and liens against police officers and judges in both municipalities. He also filed bogus papers against Ulster County officials.

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