One Story: It Never Would Have Happened If…..

if the so-called lenders had done due diligence. But nobody was doing due diligence because they didn’t care. They didn’t care because they were not lending money for which they would be held accountable. And now people like this, en masse, are being asked to take responsibility for the failure of the banks to know their own business.

One ‘Nightmare’ Mortgage: Problems From Origination Through Foreclosure

by Karen Weise
ProPublica, Nov. 22, 2010, 12:22 p.m.

.A foreclosure sign is seen in Miami Beach, Fla. (Joe Raedle/Getty Images)

Imogene Hall, a 49-year-old Jamaican immigrant living in Miami, is exactly the kind of poster child you don’t want to be. From a mortgage broker’s knock on her door four years ago all the way to today, when the Florida courts may be limiting her due process, the Miami Herald has the details [1] on Hall’s story, documenting the ways her situation shows many common indicators of fraud.

“If homeownership represents the American dream, then Hall’s story is the nightmare,” wrote the Herald’s executive editor.

A broker (now serving 11 years prison) knocked on her door in late 2005 and said he could help Hall draw on some of the equity she had built in her home, where she had lived since 1997. Hall thought getting some cash would be helpful, since at the time she was having trouble finding work as a nursing aide and had bills to pay.

Ultimately, the broker and his associates pocketed $180,000 while Hall got about $50,000, the Herald reported.

The broker used a “straw buyer” — someone other than the person living in the house — to get the mortgage. Reuters has reported that using straw buyers was a common scam:

In this scheme, fraudsters use a fake identity or that of someone else who allows them to use their credit status in return for a fee. The seller pockets the money the buyer borrows from a lender to pay for the home.

The straw buyer listed as his employer a nonexistent Blockbuster video store, yet the lender still gave him the loan.

The broker’s plot was aided by a closing agent, title agent and broker’s affiliate who have all since been charged or convinced of mortgage-related fraud.

The Sarasota Herald Tribune’s award-winning series [2] on fraud in the practice of flipping homes — where the paper identified $10 billion in suspect sales in Florida — found that 40 percent of fraudsters were from within the real estate industry, including brokers, attorneys and real estate agents.

After Hall refinanced, she sent her monthly mortgage payments to the brokerage, none of which it forwarded on to the lender. The brokerage sent her “bogus receipts indicating ‘mortgage paid,'” the Herald reported. Soon the lender started the foreclosure process. Scammers swarmed Hall even as she tried to save her home. Foreclosure defense lawyers she engaged to help her ended up instead taking thousands of dollars from her for little or poor work.

Initially, the courts recognized signs of fraud in Hall’s case and slowed down the process so she could establish her defense. But this July, her case was transferred to Florida’s “rocket docket,” a special courtroom designed to blitz through thousands of foreclosures that had clogged the courts. In Miami-Dade County alone, the court was supposed to clear about 200 cases a day.

Rolling Stone’s Matt Taibbi recently tore into [3] the concept of the rocket docket:

It exists to launder the crime and bury the evidence by speeding thousands of fraudulent and predatory loans to the ends of their life cycles, so that the houses attached to them can be sold again with clean paperwork. The judges, in fact, openly admit that their primary mission is not justice but speed.

In the new court, Hall had just a 15-minute hearing, during which the judge did not allow her or her attorney to speak on her behalf, she told the Herald. She said the judge just told her, “You’re going to lose the house, you’re going to lose the house.”

Law enforcement are set to evict Hall, her four kids and three grandkids from their home next Monday.

19 Responses

  1. GEORGIA RESIDENTS: Contact me if Bank of America has been Bullying you. Saying you owe fees you don’t owe. Sending Intent to Foreclose Letters even when you are not behind. Placing Flood Insurance on you. Losing stuff in the mail several times etc…
    Sonya sonya36767@yahoo.com

  2. http://gvbids.com/fraud/adversary/66.pdf
    MOTION TO DISQUALIFY PITE DUNCAN LLP FRAUD ON THE COURT

    Solomon v Eloan, Wells Fargo, Mers
    CALIFORNIA EASTERN DISTRICT BANKRUPTCY COURT SACRAMENTO

  3. Thanx for This info…
    Really Helpful for me ,i enjoyed while reading.Thnx
    i add you my RSS list..

  4. Tomorrow find something to be THANKFUL for…banks can not take away gratitude!
    Hoping for THANKSGIVING for everyone

  5. @ Gregory Bryl
    The ruling in IndyMac Bank, F.S.B. v. Yano-Horoski that you’re referring to was from November 2009. Unfortunately, that decision has just been overturned.

    “Last week, the Appellate Division, Second Department, held in an unsigned ruling that the “severe sanction…was not authorized by any statute or rule…nor was the plaintiff given fair warning that such a sanction was even under consideration.” “The reasoning of the Supreme Court that its equitable powers included the authority to cancel the mortgage and note was erroneous, since there was no acceptable basis for relieving the homeowner of her contractual obligation to the bank,” the panel wrote in its unanimous unsigned ruling in IndyMac Bank, F.S.B. v. Yano-Horoski, 17926/05.”

    http://www.mfi-miami.com/2010/11/judge-spinners-yano-horoski-ruling-gets-the-smack-down/

  6. @Gregory Bryl,

    Wow! That was one beautiful piece of work by Hon. Jeffery Arlen Spinner. Funny that here amidst all the judge bashing comes this truly eloquent decision. I called him to thank him on behalf of all struggling with these issues. If you care about quality court service, call Judge Spinner @ 631-852-2309. He desrves a round of applause.

    http://bryllaw.blogspot.com/2010/11/homeowners-get-their-house-free-and.html

  7. IT IS PAYBACK TIMES.

    http://www.scribd.com/doc/43914306/National-Mortgage-News-It-s-Hard-Out-There-for-a-Mortgage-Servicer

    Residential servicers are under siege from regulators, state attorneys general and legislators for messing up the foreclosure process. But instead of focusing strictly on fixing that problem, these officials are taking aim at servicers’ business models and their disappointing efforts to modify loans.

    Like what you see? Click here to sign up for a National Mortgage News free trial and daily newsletter to get the latest feature stories, news headlines, data, and in-depth analysis on the issues impacting the mortgage industry.
    Iowa AG Tom Miller told a Senate panel recently that “robo-signing is only a symptom of a much larger problem with the mortgage servicing system.”

    He noted the robo-signing investigation by the 50 AGs also is looking at various servicing fees, force-placed insurance as well as well as the problems servicers and investors are having showing a proper chain of title and ownership of securitized mortgages. “However, the biggest issue is fixing the loan modification system,” Miller said.

  8. Linda,

    Regarding the ‘straw buyers’:

    One article on David Stern referenced properties that he had been acquiring. I’ll bet that all through this mess there are ‘insiders’ taking advantage.

    One attorney in my own town who is now ‘practicing’ in this foreclosure defense field was most recently only an investor. He had left actual practice of law. He still has ties to an investment club. Maybe that helps explain cases he has taken on and then failed to file cases in court. Given that he has a personal BK, the only thing to be gained by suing him is to end his license possibly.

    I still have the letter he wrote that I was supposed to take to the auction to threaten any buyer.

  9. Unconscionable !!!

    The woman deserves DAMAGES big time.

    Judges are committing fraud upon their own courts.

    Just had this thought: Do you think pretender lenders were using investors as straw buyers?
    (Unbeknownst to them, of course)

  10. I cannot get my password to work either. can you send it to Joyce Cauthen at email address please so I can get all of the post.

  11. On a positive note, here is a decision completely discharging a mortgage and rendering the house “free and clear” based on the bank’s grossly inequitable conduct during loan mod negotiations and foreclosure proceedings.
    http://bryllaw.blogspot.com/2010/11/homeowners-get-their-house-free-and.html

  12. absolutely – I find it difficult to believe that the AG’s are going after 23 states that judicial states. We have to file a suit everytime against the lender in order to get the hearing that judicial states already have by law. And the cost is charged to the homeowner direct before he can file.

  13. How come I didn’t get a password for the next post? What gives?

  14. Non-judicial states need to back off from allowing these foreclosures also.

  15. Fox news used to go in front of Judges houses and interview them on rape cases that the judge would let the rapist or Child Molestors off easy. The same should be done to these judges. Try to get the local news media involved. She can appeal. There are lots of attorneys in Miami who know how to appeal.

    NEVER AGAIN

  16. This makes my blood boil…

  17. Joyce Louise

    Thinking the same thing before I read your post.

    The judge should have referred the case to the Florida Department of Justice. If fact, if the judge suspected an IRS violation (which surely occurred), then the judge had an OBLIGATION to send the case to the DOJ.

    The judge, in effect, is aiding and abetting the crime.

  18. We are loosing far more than a house

  19. Bring the Rocket Docket Judges before the State and the Department of Justice for ethics violations and do it immediately. Stop the rocket docket process in Florida, effective immediately via the AG and the New Governor, Scott.

    Notice by the Governor put a halt on the sheriff’s eviction process for this home under the notice of possible theft by the lender to seize the property.

    If the governor can stop a death sentence from being carried out, he can stop this foreclosure.

    Those contracts that were signed and executed by the borrower to the mortgage lender were fraudulently obtained therefore legality of the mortgage is questionable and the AG McCullom needs to review it asap. There has to be a law under state legislative matters that protects this homeowner from allowing the lender to evict this person.

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