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Barney Frank drops a bombshell: How a shocking anecdote explains the …

Frank goes on to explain that Obama rejected the request, saying “we have only one president at a time.” Frank writes, “my frustrated response was that he had overstated the number of presidents currently on duty,” which equally angered both the outgoing and incoming officeholders.

Obama’s unwillingness to take responsibility before holding full authority doesn’t match other decisions made at that time. We know from David Axelrod’s book that the Obama transition did urge the Bush administration to provide TARP loans to GM and Chrysler to keep them in business. So it was OK to help auto companies prior to Inauguration Day, just not homeowners.

In the end, the Obama transition wrote a letter promising to get to the foreclosure relief later, if Congress would only pass the second tranche of TARP funds. Congress fulfilled its obligation, and the Administration didn’t. The promised foreclosure mitigation efforts failed to help, and in many cases abjectly hurt homeowners.

This is not a new charge from Frank: he first leveled it in May 2012 in an interview with New York magazine. Nobody in the Obama Administration has ever denied the anecdote, but of course hardly anybody bothered to publicize it, save for a couple financial blogs. I suppose those reviewing ”Frank” can offer an excuse about this being “old news,” but that claims suffers from the “tree falling in the forest” syndrome: if a revelation is made in public, and no journalist ever elevates it, did it make a sound?

The political media’s allergy to policy is a clear culprit here. Jamie Kirchick’s blanket statement in his review of “Frank” that “readers’ eyes will glaze over” at the recounting of the financial crisis is a typical attitude. But millions of people suffered needlessly for Wall Street’s sins; they’d perhaps be interested in understanding why.

That’s the main reason why the significance of Obama’s decision cannot be overstated. The fact that we waited six years to get some semblance of a decent economic recovery traces back directly to the failure to alleviate the foreclosure crisis. Here was a moment, right near the beginning, when both public money and leverage could have been employed to stop foreclosures. Instead of demanding homeowner help when financial institutions relied on massive government support, the Administration passed, instead prioritizing nursing banks back to health and then asking them to give homeowners a break, which the banks predictably declined.

There were no structural or legislative barriers to this proposition. One man, Barack Obama, could tell another man, Henry Paulson, to tighten the screws on banks to write down loans, and something would have happened. Would it have been successful? Would it have saved tens or hundreds of billions in damage to homeowners? Even trillions? Or would Paulson and his predecessors found a way to wriggle out of the commitment again? We know the alternative failed, so it’s tantalizing to think about this road not taken.

This still matters because, as City University of New York professor Alan White explained brilliantly over the weekend, the foreclosure crisis isn’t really over. Though 6 million homes have been lost to foreclosure since 2007, another 1 million remain in the pipeline, many of them legacy loans originated during the housing bubble. If you properly compare the situation to a time before the widespread issuance of subprime mortgages, we’re still well above normal levels of foreclosure starts.

In addition, over one in six homes remain underwater, where the mortgage is bigger than the value of the home, a dangerous situation if we hit another economic downturn. And up to 4 million homes face interest rate resets from temporary modifications, along with nontraditional mortgages where the rate is scheduled to go up. Home equity lines of credit are also nearing their 10-year limits, requiring borrowers to pay down principal balances. Some Americans have been waiting over five years in foreclosure limbo, which sounds great (no payments!) until you understand the stress and anxiety associated with not knowing if you will get thrown out on the street at any time, something highly correlated with sickness and even suicides.

In baseball terms, we’re in the seventh or eighth inning of the crisis. And Barney Frank detailed how the president-elect had the opportunity to call the game and fix the problem much earlier, which he turned down. You’d think someone would have noticed.

Article source: http://www.salon.com/2015/03/31/barney_frank_drops_a_bombshell_how_a_shocking_anecdote_explains_the_financial_crisis/

NeighborWorks receives $10K grant from Community Bank, NA

SCRANTON — NeighborWorks Northeastern Pennsylvania (NWNEPA) recently received a $10,000 contribution from Community Bank, N.A. through the PA Department of Community and Economic Development’s (DCED) Neighborhood Assistance Program.

The Neighborhood Assistance Program provides state tax credits to businesses for contributions made to qualified organizations undertaking projects and programs that fit within DCED’s priorities.

The funding will be used specifically to support NWNEPA’s Foreclosure Prevention Initiative for 2015.

Over the past year, NWNEPA has provided various foreclosure prevention services to over 100 regional homeowners and has helped numerous families avoid foreclosure through its counseling efforts and the negotiation of loan modifications, short sales, and affordable refinances.

Information provided by NeighborWorks NEPA.

Article source: http://golackawanna.com/news/local-news-news/152598725/NeighborWorks-receives-$10K-grant-from-Community-Bank-N.A.

Rochester man fights eviction

For the second time since December, George Douglass is prepared to handcuff himself to a 55-gallon drum filled with hardened concrete rather than go quietly when city marshals show up to evict him from his 19th Ward home.

“I live here,” said Douglass, who purchased his three-story Rochester home at 95 Roxborough Road with his ex-wife back in 2008. “When we bought this, we were both gainfully employed and we said this would be where we would spend the rest of our lives and where our children would grow up.”

What they didn’t expect then was that Douglass would lose his job in early 2009, nor did they expect the health problems that came, and then the divorce that left Douglass, now on disability, trying to pay for the house alone with a much lower income.

On Monday, Douglass was joined in protest on his front lawn by members of Take Back the Land Rochester, a community group that works to have housing recognized as a basic human right. He and Take Back the Land held a similar protest on Dec. 2, also seeking then to keep the city marshal from forcing Douglass to vacate the house.

He says he tried for loan modification, but was unable to work out terms with lender Wells Fargo Bank. However, officials from the bank said they were unable to get adequate information from him to determine if he would be eligible for a loan modification or other alternative to foreclosure and moved forward with the foreclosure sale in 2014.

James E. Hines, Wells Fargo spokesman, said the lender also offered financial relocation assistance, but got no response.

“We work very hard to help keep families in their homes when they encounter financial difficulties,” he said. “When customers who are 60 days or more past due choose to work with us, we help 7 out of every 10 avoid foreclosure.”

As a pair of officers from the Rochester Police Department looked on, protestors marched the sidewalk in front of Douglass’ home on Monday, carrying anti-foreclosure banners and chanting.

“We’re here if necessary to do civil disobedience to defend his home from the banks,” said Luke Spencer with Take Back the Land. “We are still in negotiations with the bank, but they haven’t done what we wanted so we’re resorting to doing an eviction blockade.”

Ideally, he said, the bank would agree to donate the house to a community land trust, which would be a nonprofit community-governed organization that would steward housing and land parcels, ensuring that they remain occupied and affordable. Such organizations often enter long-term renewable leases with homeowners instead of offering traditional financing, and when the homeowner sells, the family earns only a portion of the increased property value. There are about 250 community land trusts currently across the United States, according to community-wealth.org, a project of the Democracy Collaborative.

Hines said the property isn’t available for donation through the program Take Back the Land Rochester has described to the lender. “We can sell a property through that program, but we are unable to donate a property through that program,” he said.

David Tolar, also with Take Back the Land, called for changes to federal rules to make it easier for banks to turn over properties like Douglass’ to land trusts without having to force people out of their houses.

He said the U.S. Department of Housing and Urban Development requires foreclosing lenders to evict occupants of a home before they can collect the mortgage insurance on Federal Housing Administration-backed loans.

“That’s the tangle that we’re trying to undo to try to get things donated to the land trust,” he said.

Douglass said he isn’t looking for a free house.

“How do you think that would make the rest of my neighbors here feel while they’re still paying their mortgages and I got a free home,” he said. “But, really, how much are they going to lose if the bank renegotiates with me? They bring in billions of dollars and the few thousand they might drop off by renegotiating with me isn’t going to kill a financial institution the size of Wells Fargo. They could afford to absorb 10,000 such situations.”

A cadre of Take Back the Land volunteers is sitting with Douglass at his home all this week, hoping to head off his eviction.

MCDERMOT@DemocratandChronicle.com

twitter.com/meagmc

Article source: http://www.democratandchronicle.com/story/news/2015/03/30/rochester-man-fights-eviction/70682570/

Mass Tax Foreclosure Threatens Detroit Homeowners

In Detroit, tens of thousands of people are facing a deadline Tuesday that could cost some of them their homes. That’s when homeowners have to make arrangements to either pay delinquent property taxes — or risk losing their home at a county auction.

When Detroit emerged from bankruptcy last year, it did so with a razor-thin financial cushion. It desperately needs every bit of tax revenue it can muster.

Earlier this year, county officials sent out 72,000 foreclosure notices to homeowners behind on property taxes — 62,000 of them in Detroit alone. They say about 18,000 of these properties are occupied, but fewer than half of those homeowners have paid all of their tax.

So officials like City Councilman Gabe Leland are knocking on doors in Detroit neighborhoods, reminding residents that the window to pay taxes is quickly closing.

With Detroit’s high unemployment and poverty rates, it’s not hard for Leland to find residents facing foreclosure — or who know someone that is.

“It’s scary,” he says. “Seventy-two thousand in Wayne County, thousands of those here in the city of Detroit. This is a crisis. And you know — city, county — we don’t want these properties … we want people to stay in their homes. And this is gonna put people on the street.”

Leland supports a moratorium on foreclosures to give homeowners more time to pay taxes or have property values reassessed.

But Wayne County Deputy Treasurer Eric Sabree says a moratorium is out of the question because Detroit’s property tax revenue is already spoken for.

“We pledge all the penalties and fees in our bond pledges to borrow money,” he says. “We can’t do a moratorium on police protection or fire protection.”

Detroit resident Sandy Combs lives with her partner of two decades, Ken Brinkley, in a house he inherited from an aunt.

She lost her job in 2006 while Brinkley had triple bypass heart surgery. Combs says they paid medical bills instead of taxes, were foreclosed on and their house sold at auction.

They then started paying rent to live there and tried to scrape together enough money to buy it outright.

But they discovered that property taxes had not been paid and the house went up for auction again — this time to a company that wants to evict them.

“It’s gonna kill Kenny. He’s 82, this house is all he has. He knows he’s on his way out. How can these people be so crazy? ‘Cause it’s not our fault,” Combs says.

It’s not uncommon for speculators to buy up properties and jack up rents.

Wayne State University professor John Mogk says speculators have been gobbling up Detroit for decades, gambling that new development will dramatically increase property values.

“What’s unique in Detroit is the scale of the problem,” Mogk says.

He says other investors buy deteriorating buildings for as little as $500 apiece and then rent them as is.

“And so a great many of these properties are being purchased by what previously we would call slumlords,” he adds. “And they’re being rented without being brought up to the city code, and milked, and eventually they may stop paying taxes. And as the homes become uninhabitable they will again revert to the city.”

It’s a desperate cycle that Detroit officials are struggling to break. City officials say they don’t want to be landlords — they just want the badly needed tax revenue.

Every time a speculator buys a property and lets it sit vacant, it becomes a magnet for blight. That does nothing to improve the city’s long-term tax base — that’s done by homeowners.

And it remains to be seen just how many of the thousands facing imminent foreclosure will be able to make payment arrangements so that they can be the ones to provide that tax revenue.

Copyright 2015 WDET-FM. To see more, visit http://www.wdet.org.

Article source: http://www.kplu.org/post/mass-tax-foreclosure-threatens-detroit-homeowners

Foreclosure victims to demand money from settlements

People who lost homes to foreclosure will rally Tuesday to demand they get a share of Delaware’s settlement money stemming from the 2008 financial meltdown.

Victims Stand Against Foreclosure Everywhere is hosting the event to gather support from public officials and to identify and connect victims of foreclosure.

“We still haven’t heard any definitive response to our pleas to legislators to fund programs [for foreclosure victims],” said Penny Dryden, a VSAFE organizer and executive director of the nonprofit Community Housing and Empowerment Connections. “We thought this might make a stronger pitch.”

An article in The News Journal in January found that many of the 32,000 Delaware homeowners who were foreclosed on since 2008 have seen little to no money from the state’s $200 million in settlements with the nation’s largest banks over shoddy lending practices that contributed to the housing crisis.

About half of the money has gone to current homeowners in the form of mortgage modifications or to former homeowners as a small check in the mail.

But, this has not helped people like Robbin and Jeff Brown, members of VSAFE who lost their five-bedroom dream house on Old Baltimore Pike to foreclosure.

The Browns attempted to get a mortgage modification when Jeff lost his job as a millwright at the Chrysler auto plant in Newark in 2009. However, the bank was unwilling to assist and the couple fell victim to a modification scam.

The Browns spoke to The News Journal in January in hope that Delaware’s public officials would advocate for the remaining settlement money to go directly to foreclosure victims and their needs.

Instead, they heard nothing from public officials after the story ran, except from U.S. Rep. Tom Marino, a Republican from Pennsylvania, who blasted the government for how the settlements have been spent.

The Joint Finance Committee is still considering a proposal from Attorney General Matt Denn to spend $36.6 million of the settlements on troubled schools and Wilmington’s violent streets.

“Delaware should really feel bad that all the officials here don’t have a backbone,” Robbin Brown said. “They are in office for the people, but they don’t say anything.”

VSAFE is a new organization led by Community Housing and Empowerment Connections Inc., the National Association of Social Workers Delaware Chapter and Minority Workforce Development Coalition. Foreclosure victims can sign up to join the group on Tuesday.

Contact Jessica Masulli Reyes at 302-324-2777, jmreyes@delawareonline.com or Twitter @JessicaMasulli.

If you go

WHAT: The newly-created Victims Stand Against Foreclosure Everywhere, or VSAFE, will rally to demand Delaware give people who lost their homes to foreclosure money from banking settlements stemming from the 2008 housing and financial crisis. Foreclosure victims will be able to sign up to join the VSAFE support group.

WHERE: International Longshoremen Union Hall, 200 S. Claymont St., Wilmington, Delaware

WHEN: Tuesday, March 31 from 6:30 p.m. to 8:30 p.m.

For more information about VSAFE call 302-275-4709

Article source: http://www.delawareonline.com/story/news/local/2015/03/30/foreclosure-victims-demand-money-settlements/70673508/

Mass Tax Foreclosure Threatens Detroit Homeowners

Homeowners sit in a conference room in Detroit's Cobo Center while waiting for their cases to be heard to avoid foreclosure from tax debts in Detroit on Jan. 29. This year, Wayne County officials sent out 62,000 foreclosure notices to city homeowners behind on property taxes.i

Homeowners sit in a conference room in Detroit’s Cobo Center while waiting for their cases to be heard to avoid foreclosure from tax debts in Detroit on Jan. 29. This year, Wayne County officials sent out 62,000 foreclosure notices to city homeowners behind on property taxes.

Paul Sancya/AP


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itoggle caption

Paul Sancya/AP

Homeowners sit in a conference room in Detroit's Cobo Center while waiting for their cases to be heard to avoid foreclosure from tax debts in Detroit on Jan. 29. This year, Wayne County officials sent out 62,000 foreclosure notices to city homeowners behind on property taxes.

Homeowners sit in a conference room in Detroit’s Cobo Center while waiting for their cases to be heard to avoid foreclosure from tax debts in Detroit on Jan. 29. This year, Wayne County officials sent out 62,000 foreclosure notices to city homeowners behind on property taxes.

Paul Sancya/AP

In Detroit, tens of thousands of people are facing a deadline Tuesday that could cost some of them their homes. That’s when homeowners have to make arrangements to either pay delinquent property taxes — or risk losing their home at a county auction.

When Detroit emerged from bankruptcy last year, it did so with a razor-thin financial cushion. It desperately needs every bit of tax revenue it can muster.

Earlier this year, county officials sent out 72,000 foreclosure notices to homeowners behind on property taxes — 62,000 of them in Detroit alone. They say about 18,000 of these properties are occupied, but fewer than half of those homeowners have paid all of their tax.

So officials like City Councilman Gabe Leland are knocking on doors in Detroit neighborhoods, reminding residents that the window to pay taxes is quickly closing.

With Detroit’s high unemployment and poverty rates, it’s not hard for Leland to find residents facing foreclosure — or who know someone that is.

County officials are foreclosing on tens of thousands of homes in Detroit along streets like this, on the city's west side.i

County officials are foreclosing on tens of thousands of homes in Detroit along streets like this, on the city’s west side.

Dawn Uhl-Zifilippo/WDET


hide caption

itoggle caption

Dawn Uhl-Zifilippo/WDET

County officials are foreclosing on tens of thousands of homes in Detroit along streets like this, on the city's west side.

County officials are foreclosing on tens of thousands of homes in Detroit along streets like this, on the city’s west side.

Dawn Uhl-Zifilippo/WDET

“It’s scary,” he says. “Seventy-two thousand in Wayne County, thousands of those here in the city of Detroit. This is a crisis. And you know — city, county — we don’t want these properties … we want people to stay in their homes. And this is gonna put people on the street.”

Leland supports a moratorium on foreclosures to give homeowners more time to pay taxes or have property values reassessed.

But Wayne County Deputy Treasurer Eric Sabree says a moratorium is out of the question because Detroit’s property tax revenue is already spoken for.

“We pledge all the penalties and fees in our bond pledges to borrow money,” he says. “We can’t do a moratorium on police protection or fire protection.”

Detroit resident Sandy Combs lives with her partner of two decades, Ken Brinkley, in a house he inherited from an aunt.

She lost her job in 2006 while Brinkley had triple bypass heart surgery. Combs says they paid medical bills instead of taxes, were foreclosed on and their house sold at auction.

They then started paying rent to live there and tried to scrape together enough money to buy it outright.

But they discovered that property taxes had not been paid and the house went up for auction again — this time to a company that wants to evict them.

“It’s gonna kill Kenny. He’s 82, this house is all he has. He knows he’s on his way out. How can these people be so crazy? ‘Cause it’s not our fault,” Combs says.

It’s not uncommon for speculators to buy up properties and jack up rents.

A detail from the north wall of Diego Rivera's Detroit Industry murals shows workers on the automobile assembly line. After Detroit declared bankruptcy, the murals were at risk of being sold. Click here for a larger view.

Gary Klein is one of the lead attorneys representing homeowners in the case against Ocwen Financial.

Wayne State University professor John Mogk says speculators have been gobbling up Detroit for decades, gambling that new development will dramatically increase property values.

Gov. Rick Snyder speaks today flanked by Detroit Mayor Mike Duggan (left) and emergency manager Kevyn Orr. Snyder said that the nation's largest municipal bankruptcy will end at midnight.

“What’s unique in Detroit is the scale of the problem,” Mogk says.

He says other investors buy deteriorating buildings for as little as $500 apiece and then rent them as is.

“And so a great many of these properties are being purchased by what previously we would call slumlords,” he adds. “And they’re being rented without being brought up to the city code, and milked, and eventually they may stop paying taxes. And as the homes become uninhabitable they will again revert to the city.”

It’s a desperate cycle that Detroit officials are struggling to break. City officials say they don’t want to be landlords — they just want the badly needed tax revenue.

Every time a speculator buys a property and lets it sit vacant, it becomes a magnet for blight. That does nothing to improve the city’s long-term tax base — that’s done by homeowners.

And it remains to be seen just how many of the thousands facing imminent foreclosure will be able to make payment arrangements so that they can be the ones to provide that tax revenue.

Article source: http://www.npr.org/2015/03/30/396317153/mass-tax-foreclosure-threatens-detroit-homeowners

Homeowners facing foreclosure may instead be home free




MIAMI — In September, Susan Rodolfi celebrated an unusual anniversary: five years of missed mortgage payments.

She is like a ghost of the housing market’s painful past, one of thousands of Americans who have skipped years of mortgage payments and are still living in their homes.

Continue reading below

Now a legal quirk could bring a surreal ending to her foreclosure case and many others around the country: They may get to keep their homes without ever having to pay another dime.

The reason, lawyers for homeowners argue, is that the cases have dragged on too long.

There are tens of thousands of homeowners who have missed more than five years of mortgage payments, many of them clustered in states like Florida, New Jersey, and New York, where lenders must get judges to sign off on foreclosures. However, in a growing number of foreclosure cases filed when home prices collapsed during the financial crisis, lenders may never be able to seize the homes because the state statutes of limitations have been exceeded, according to interviews with housing lawyers and a review of state and federal court decisions.











Continue reading it below

“No one gets a free house,” Judge Michael B. Kaplan of the US Bankruptcy Court in Trenton, N.J., wrote in an opinion late last year, reflecting what he characterized as a longstanding “admonition” that he and others made during the foreclosure crisis.

But after effectively ending a New Jersey homeowner’s foreclosure case in November because the state’s six-year statute of limitations had expired, he wrote in his decision, “With a proper measure of disquiet and chagrin, the court now must retreat from this position.”

It is difficult to know for sure how many foreclosure cases are still grinding through the court systems since the financial crisis. It is even harder to say how many of those borrowers are still living in their homes.

Bank of America, for example, has initiated the foreclosure process on roughly 20,000 mortgages that have not been paid in at least five years. The bank estimates that 90 percent of those homes are still occupied.

The courts are not the only source of delay. Over the years, the federal government has made 69 changes to its mortgage modification programs, forcing lenders to repeatedly scrap previous offers to homeowners and extend new terms.

Of course, the banks have also dragged out this reckoning through shoddy paperwork, botched modifications, and general dysfunction as they struggled to cope with a flood of soured mortgages. Many cases were passed between lawyers like hot potatoes and lay dormant on court dockets.

Since housing prices peaked in 2006, roughly 6.7 million Americans have lost their homes to foreclosure. Another 800,000 people could share that fate by the time all of the delinquent mortgages from the crisis are settled, according to a Moody’s Analytics estimate.

“This whole event is going to take 10 years to sort out,” said Mark Zandi, chief economist at Moody’s Analytics. “So we probably have one or maybe two more years to go until it is all over.”

But the laws in places like Florida could prove to be a wild card. In a state where “hanging chads” decided the 2000 presidential election, a legal technicality could help settle the state’s foreclosure crisis.

Lawyers for homeowners in Florida contend that lenders have five years to file for foreclosure after a homeowner defaults, normally after several months of missed payments, and the mortgage is “accelerated,” meaning that the bank says the debt is due all at once. Banks say they have many more years to file for foreclosure, arguing that the five-year clock resets every time a homeowner misses a monthly payment — regardless of when the mortgage was accelerated. Some Florida judges have agreed.

The statute of limitations does not halt a foreclosure case that is continuing in court. But in some Florida courts, homeowners’ lawyers have argued that once a foreclosure is dismissed even for technical reasons, the lender cannot evict the delinquent borrower if the statute of limitations has passed.

The issue is now before the Florida Supreme Court.

The lenders’ lawyers have warned in court papers that if the state’s high court sides with the homeowners, “it would spawn a public policy hazard” and dissuade banks from extending mortgages in Florida in the future.

The statute of limitations issue is also coming up in the New York courts.

“It’s becoming a more common way to get out from under these cases,” said Linda Tirelli, a lawyer in White Plains, N.Y., who represents homeowners facing foreclosure.

In June, it also appeared that Rodolfi was literally home free.

When a lawyer then working for her mortgage servicer did not show up for a routine hearing, the judge dismissed her foreclosure case.

But her servicer, Nationstar Mortgage, recently won a reversal of the dismissal, saying the lawyer had missed the hearing because of “inadvertence, mistake, and excusable neglect.” Rodolfi’s lawyers plan to appeal.

“People who are paying their mortgage might see this as a windfall for the homeowner,” said one of her lawyers, Martin G. McCarthy. “But the lenders are more than partly to blame, and in Susan’s case, I wouldn’t feel bad for them.”

Article source: http://www.bostonglobe.com/business/2015/03/29/homeowners-facing-foreclosure-may-instead-home-free/PGPtrbQPHqYtKM2N1K74KJ/story.html

Officials: Slow Justice At Fault In Chicago Man’s Long Con

CHICAGO (AP) – The Illinois Attorney General’s office sued the owner of a Chicago remodeling company almost 30 years ago, accusing him of taking money from property owners for work that was either shoddy or never done. Without admitting wrongdoing, Mark Diamond agreed to change his ways.

But authorities say Diamond merely changed up his scheme, continuing what amounted to a nearly three-decade career of scamming hundreds of people — primarily poor, older and African-American — with home repair and mortgage-related frauds.

They accuse him of stripping millions of dollars in equity from homeowners, even as state regulators took away his business license, the Federal Trade Commission and two consecutive attorneys general sued and dozens of homeowners filed lawsuits.

Federal investigators last week executed a search warrant on Diamond’s Chicago office, an FBI spokeswoman confirmed, but no criminal charges have been filed. He’s scheduled to appear at a hearing Monday on a 2009 state lawsuit against him.

How Diamond has managed to remain in business is a frustrating indictment of consumer protection laws and a civil justice system that moves too slowly, both prosecutors and consumer advocates say. If determined enough, they say, unethical business people can change corporate entities, reappear with different names and continue the same crimes.

“That’s exactly what’s going on here,” said Illinois Attorney Gen. Lisa Madigan, in an interview with The Associated Press. “This is hands-down one of the most horrific cases that I’ve had to contend with.”

Michelle Weinberg, a lawyer at Chicago’s Legal Assistance Foundation, said she’s seen roughly a half-dozen “repeat players” in consumer fraud schemes over the last 20 years. She agreed it’s not unusual for it to take a decade or more to stop them.

“It’s very sad, and it’s very frustrating,” said Weinberg, who has represented multiple clients against Diamond.

Madigan said in addition to the civil case and possible criminal charges, her office is working with the Illinois Legislature to pass a bill aimed at better protecting consumers who consider reverse mortgages.

Diamond didn’t answer repeated phone calls from The Associated Press, and his office appeared closed when the AP tried to visit last week. His attorney, Dennis Both, also did not respond to multiple emails and phone messages.

The 58-year-old Diamond owns several Chicago properties, including condos overlooking Millennium Park, according to property records. He’s faced foreclosure on some of his own real estate, court records show, and has been repeatedly sued by his condominium association for not paying fees.

Two lawsuits, Madigan’s and one from 2002 filed by then-Attorney General Jim Ryan and the FTC, accuse Diamond of using high-pressure sales techniques, falsifying closing documents and taking equity for repair work that’s sometimes never done.

People who say they’re his victims and prosecutors allege Diamond, who is white, has employed at least one African-American woman identified only as “Cynthia” whose job it is to approach homeowners on Chicago’s South and West sides.

Robert Rash says he first met Diamond in 2006. Shortly after his wife died, the college security guard started getting unsolicited phone calls from a woman asking if he needed any home repairs. He eventually told the woman — Cynthia — he wanted to install a bathroom in the basement, but that he couldn’t pay for it.

Cynthia said the company she worked for could refinance his home, take cash out to pay for the new bathroom and do the work. Rash agreed, thinking he was getting a lower house payment and a $5,000 cash payout. But Diamond — who Rash says took $17,000 to put in the small bathroom — never completed the work.

Rash tried for years to get Diamond to finish and had to enroll in a state program to help people facing foreclosure before a free legal service helped him file a lawsuit against Diamond, which was settled for $7,000.

“These have been some miserable years,” the 68-year-old said. He describes Diamond as a master manipulator. “If there were an Oscar for being a crook, he would win,” Rash said.

At the time Rash met Diamond, he was still subject to a three-year consent decree as part of an agreement to resolve the 2002 case. It set several requirements, including that Diamond not mislead consumers.

By 2009, authorities say, Diamond had moved on to hawking reverse mortgages, in which homeowners take equity out of their property to live on. Authorities said he sent women into Chicago neighborhoods with offers of home repairs presented as a free city program for seniors.

Lillie Williams, an 88-year-old who bought her Chicago home in 1974, was among those who signed up. She said “Cynthia” drove her to Diamond’s office to sign paperwork, and agreed to put in a new kitchen and bathroom.

But only some of the work was done before Williams started getting notices that she was delinquent on her house insurance. Her kids realized their mother had signed a reverse mortgage and had given Diamond access to the equity in her home.

She’s currently facing foreclosure.

“It meant the world to me,” Williams said. “I thought I’d be here until I leave.”

(TM and © Copyright 2015 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

Article source: http://chicago.cbslocal.com/2015/03/30/officials-slow-justice-at-fault-in-chicago-mans-long-con/

Bill addressing foreclosure-prevention options under fire

INDIANAPOLIS (AP) – Housing advocates say an Indiana law that has helped thousands of residents avoid foreclosure could be gutted under a bill lawmakers are considering.

An amendment to a bill introduced by Republican Sen. James Merritt deals with the 2010 mortgage settlement law that requires lenders to hold conferences with distressed homeowners.

Democratic Sen. Karen Tallian of Portage wrote the amendment. She tells The Indianapolis Star it was designed to reconcile state and federal laws on foreclosure rights and wasn’t meant to hurt distressed homeowners. She’s revised the amendment to restore the court-supervised settlement conferences, but the provision wouldn’t apply to big banks that are subject to federal regulations.

Housing advocates say the revised amendment exempts almost all Indiana mortgage lenders from the state law and effectively eliminates the program.

——

Information from: The Indianapolis Star.

Article source: http://www.journalgazette.net/news/local/indiana/Bill-addressing-foreclosure-prevention-options-under-fire-5695129

UNPRECEDENTED ‘KATRINA’ OF TAX FORECLOSURES TO HIT DETROIT …

(L to r) Luis and Cecilia Mendoza, with Cornell Squires, point out abandoned, burnt out properties next to their home (at far left). They have paid $16,000 in property taxes but are facing foreclosure March 31. They have five children.
(L to r) Luis and Cecilia Espinoza, with Cornell Squires, point out abandoned, burnt out properties next to their home (at far left). They have paid $16,000 in property taxes since 2011 but are facing foreclosure March 31. They have five children and little income.

“Largest mass foreclosure in one city at one time in U.S. history”

62,000 homes on auction block, 37,000 occupied, most by families

Tax bills are criminal “crap shoot,” violate state laws requiring annual re-assessments; opponents say people should demand reimbursement

Numerous groups call for moratorium on foreclosures, cancellation of past tax debt, use of federal “Hardest Hit” funds to pay bills and refill city, county coffers;

Protest set for Tues. March 31 at 400 Monroe

 By Diane Bukowski

 March 28, 2015

Luis and Cecilia Espinoza with their five children and friends in 2011.

Luis and Cecilia Espinoza with their five children and friends, including Cornell Squires (center back row)  in 2011.

Detroit—“I want to take my family back to Mexico,” Cecilia Espinoza says of her husband Luis and five young children, Leonardo, Genoveva, Gavino , Pedro, and Luis III, ages 7 t0 17. “We have paid $16,000 in taxes on our home since 2011, and now they want to force us out.”

Mrs. Espinoza has treasurer’s receipts for $13,424.41, paid through May 8, 2014. She has not been able to keep track of off of all her paperwork, but her family’s property is worth far less than even that amount.

The Treasurer claims the Espinozas still owe $10,009 in taxes, for a total of $26,000. They live in a two story home on Tarnow off McGraw, next to two horrific burnt-out and abandoned houses, and across the street from a vacant field that became a dumping ground after houses there were demolished.

Lot across street from Espinoza home.

Lot across street from Espinoza home.

The Espinozas cleaned up that field, but still cannot let their children outside to play due to the deterioration of the neighborhood. They struggle to make a living with intermittent jobs. Detroit Human Services has refused the family cash assistance, providing only $1200 a month in food stamps and Medicaid.

The property is on the list of 62,000 foreclosures pending in 2015, published by the Wayne County Treasurer’s office in the Legal News.  It is likely the largest removal of a population in U.S. history, second only to the genocidal evictions of the land’s indigenous people, the Native Americans, and the kidnapping of millions of Africans from their homeland to support a slave economy whose effects redound to this day.

March31-TaxDemo-long-421x1024Cornell Squires of We the People for the People and RicoBusters said determination of property tax values has been nothing but a crap shoot in Detroit for the last 20 years, during which time no re-assessments have been performed, in violation of state law requiring annual assessments. (See MCL 211.1o, “Annual Assessment of Property,” at mcl-211-10 Annual assessment of property  and State Provisions for Property Reassessment. )

“The assessor’s office told me during the Kilpatrick administration that they had only two full-time assessors,” Squires said. “This is nothing but outright criminal fraud and racketeering, because the tax bills people are being forced to pay are illegal. State law requires annual assessments, or at the very least, reassessments every five years. It is a CRIME to force people to pay these amounts. Instead, they should be reimbursed for overpayments for the last 20 years, and the politicians in charge should go to jail.”

During the last two decades, conditions in Detroit have deteriorated drastically, due to the exodus of major employers including the auto industry, the privatization for profit of the public sector, the destruction of the city’s public school system, rising utility bills and shut-offs, and rising insurance rates on cars, homes, and other property. (See     for description of basis of property tax rate determination.)

Detroit “Mayor” Mike Duggan said in his state of the City address that he was initiating a re-assessment of all Detroit property taxes, to conclude in 2016. He said property taxes would be dropped from 0 percent to 20 percent according to neighborhood location. The southwest side is slated for only a 5 percent decrease.

Duggan pointing out selected areas of Detroit that will have taxes decreased.

Duggan pointing out selected areas of Detroit that will have taxes decreased.

He said the decreased taxes would allow more homeowners to pay. However, the Detroit bankruptcy Plan of Adjustment has tripled the city’s general fund debt through 2043, to $3 billion. That debt is backed by property taxes and state revenue sharing funds, so it is unlikely that the city’s debt holders will favor any moratorium or decrease in taxes.

“Those amounts will nowhere near reimburse taxpayers for the amounts they have overpaid in the last 20 years,” Squires said. He has had to battle for years to have his home on Detroit’s impoverished far southwest side re-assessed to a $900 a year payment, after buying it while it was burnt-out and refurbishing it.  However, it is on the foreclosure block again, with the Treasurer listing $7,194.49 as the amount due, including taxes prior to the reassessment.

Cornell Squires' home at 3380 Electric. It was burnt out when he bought it and he renovated it.

Cornell Squires’ home at 3380 Electric. It was burnt out when he bought it and he renovated it.

Neither Duggan, nor Wayne County officials Treasurer Raymond Wojtowicz, Executive Warren Evans or Sheriff Benny Napoleon have called a halt to tax foreclosures and evictions while the re-assessment proceeds. Such a moratorium has a precedent—in 2009, Evans, then Wayne County Sheriff, declared a nine-month moratorium on mortgage foreclosures in the county.

But city and county leaders along with the non-profits that are supposed to fight foreclosures  are waiting for the September and October tax auctions, during which foreclosed properties will be sold for as little as $500, many in bundles to wealthy speculators. These auctions are legally questionable as well, since the Treasurer does no title search on the properties being auctioned.

A heartbreaking tale of a neighborhood:

A heartbreaking tale of a neighborhood: block of Electric Street where Cornell Squires, his mother and his son still live in separate houses, in view of homes (l to r) where homeowner died, vandalized; Conrad Walker lived in middle home 50 years after parents died, lost to mortgage foreclosure, fire; 2012 tax foreclosure. Photos: Cornell Squires

A block over from Electric: Edsel street homes.

A block over from Electric: Edsel street homes.

Homes destroyed by fire, Edsel Street

Homes destroyed by fire, Edsel Street

In  2013, Detroit was forced to reimburse Wayne County $117 million it had advanced to cover properties that did not sell at the auctions, according to the city’s 2013 Comprehensive Annual Financial Report. It expects to owe at least another $72 million in coming “post-bankruptcy” years, according to the Moratorium NOW! Coalition against Foreclosures, Evictions, and Utility Shut-offs.

Another Edsel home.

Another Edsel home.

Total devastation on Edsel.

Total devastation on Edsel.

In February, according to the southwest Detroit-based newspaper El Central, 50 Detroiters sat in at the city’s Tax Assessor’s office to demand justice from Detroit Mayor Mike Duggan.

“Homeowners were promised a massive reduction in interest and penalty rates, and an opportunity to have their property re-assessed to pay their fair share, a right granted to every Michigan homeowner” El Central said. “Instead, at last week’s Show Cause hearing at Cobo Hall, homeowners were met with demands by the Wayne County Treasurer’s office for huge down payments and unaffordable payment plans . . . .

“Homeowners said that the treasurer’s office wasn’t offering any type of reduction and that the fast-track payment plans were often in the range of $350-$400 a month extra on top of all their other bills. So essentially people must choose between putting food on the table or having a table with no home left to put it on.”

El Central_0001

In addition to the residents who sat in at the assessors’ office in February, numerous other groups including the Moratorium NOW! Coalition Against Foreclosures, Evictions and Shut-offs, the Detroit Active and Retired Employees Association, Michigan Welfare Rights, the Detroit People’s Platform, The North End Community Council, the Russell Woods Neighborhood Association, Detroit Eviction Defense, the Rosedale Park Improvement Association, and many more are battling the foreclosure Katrina.

Bill Davis, Pres. of Detroit Active and Retired Employees Ass. (DAREA) outside CAYMC March 24. He spoke at both county and city meetings to urge halt to foreclosures.

Bill Davis, Pres. of Detroit Active and Retired Employees Ass. (DAREA) outside CAYMC March 24. He spoke at both county and city meetings to urge halt to foreclosures.

Since February, Detroit and Wayne County residents have filled meetings of the Wayne County Commission, on March 19, and the Detroit City Council, on March 24, calling for an immediate moratorium. While most officials were favorable to passing resolutions for moratoriums, a speaker at the City Council hearing pointed out that Wojtowicz doesn’t need resolutions, that he has the executive authority to halt the foreclosures himself.

A coalition plans to demonstrate at the Treasurer’s office on March 31, D-Day for final tax payments. Treasurer Raymond Wojtowicz has not extended the deadline this year as he has in previous years, proving that he does have executive powers.

Krystal Price and Kamala El at Wayne Co. Commission meeting.

Krystal Price and Kamala El at Wayne Co. Commission meeting.

During the Commission hearing, Krystal Price and Kamala El of Ricobusters produced documents showing that there has been continuing fraud in the Treasurer’s office. They said some taxpayers are told to make out checks to “Raymond Wojtowicz” personally, not to the county, and that many foreclosures are carried out by non-authorized personnel in the Sheriff’s office.

“Two lives have already been lost due to the Treasurer’s practices,” El said, referring to the killings of two erstwhile landlords in Detroit’s Rosedale Park neighborhood who tried to evict a family by flashing guns. The Treasurer has not provided proper instructions to winning bidders to get legal evictions done through 36th District Court.

They noted that the day’s agenda included approval of the use of $4.5 million from the county’s “Delinquent Tax Revolving Fund” for the expansion of the first floor at 400 Monroe, the building where the Treasurer’s office is located on several floors. The County does not own the building, however. Eighty-six separate taxpayers occupy it according to the county’s own records.

The County builds the Delinquent Tax fund by borrowing money from the banks, based on delinquent taxes owing in all its municipalities. Thus it can actually pay the taxes of foreclosed homeowners directly. However, the funds are disbursed at the Treasurer’s sole discretion, according to the attached document from the Michigan Association of County Treasurers. Click on Delinquent Tax Revolving Fund.

Hardest Hit Fund recipientsSpeakers from the Moratorium NOW! Coalition pointed out that $251 million of the $498 million in federal Helping Hardest Hit Homeowners funds provided to Michigan to help occupants stay in their homes remains unspent and can be used to pay off the delinquent taxes in  a “win-win” situation. Residents would remain in their homes while the coffers of the county and municipalities would be replenished.

Instead, Detroit’s “Blight Removal Task Force,” headed by billionaire Dan Gilbert, has used most of the funds to pay for demolition of homes that were forced into foreclosure by the fraudulent lending practices of the country’s banks, leaving Detroit neighborhoods looking like war zones. Most of the funds are going to Adamo Demolition, a white-owned corporation with revenues of $13.4 million.

Gilbert and billionaire Mike Illitch are also busy gentrifying downtown Detroit and the former “Cass Corridor” for their profit, using public funds while driving Black Detroiters out of the areas.

The U.S. Treasury says on its website regarding the Hardest Hit progam, “Early in 2010, Treasury announced that the Hardest Hit Fund® would provide more than $7.6 billion in aid for homeowners in states hardest hit by the economic crisis. Since then, state housing finance agencies have used the fund to develop programs that stabilize local housing markets and help families avoid foreclosure.”

The Hardest Hit Fund language does not include demolition of properties. Many county residents complained at the hearings that they had been denied funds from Michigan’s Step Forward program, a part of the Hardest Hit Fund, while homes are being demolished.

Dawn DeRose at Wayne County Commission.

Dawn DeRose at Wayne County Commission.

“Declare a State of Emergency!” Dawn DeRose demanded at the Commission hearing. “There is fraud going on. There are veterans being evicted who are not supposed to be foreclosed. We are never going to stop blight if we don’t stop foreclosures. We need a moratorium to keep people in their homes. Government is for the people, not for business.”

State Property Tax law does not permit the evictions of veterans with honorable discharges.

Charles Armstrong, an elderly Detroit resident, testified at both meetings that he is facing foreclosure on his home, located on Detroit’s east side near Mack and McClellan, for a bill of a little over $800.

“I had $5000 in escrow with the City of Detroit to cover my taxes,” Armstrong said. “But they didn’t apply it to my taxes, and they didn’t give me my money back.”

Charles Armstrong faces foreclosure for only $852.

Charles Armstrong faces foreclosure for only $852.

The southwest side group which protested at the Detroit assessor’s office in February is demanding, “Wipe away all back taxes for anyone who could have applied for a poverty exemption,” another provision of state law that should apply  to the majority of Detroiters. Detroit is the poorest large city in the U.S. Fifty-nine percent of its children live under the federal poverty level.

Pastor Bill Wylie Kellerman called for a “Jubilee” on debt, a concept originating in the Bible which declares that all debts shall be forgiven every 50 years.

Wayne County Commissioner Martha Scott, who sponsored a resolution for a moratorium on foreclosures several years ago, was essentially the only Commissioner who spoke out strongly on the issue, saying she has her staff members preparing a resolution now.

“We are providing hundreds millions to build the M1 rail system on Woodward, but we are allowing thousands of people to be foreclosed, and thousands of people to have their pensions cut,” Scott said. “It is horrible what we have done to people. The businessmen are getting it all, with 40 to 50 percent tax cuts. It is time for us to open up our mouths and hearts to get something done, because people are losing all hope.”

G. Errol Jennings

G. Errol Jennings

Prior to the City Council hearing, G. Errol Jennings, President of the Russell Woods-Sullivan Area Association, led a protest outside with many of the area’s residents,  members of Moratorium Now, and other groups.

“We need to stop all foreclosures now,” Jennings said. “People are paying ridiculously high property taxes. We are going to bring the heat from the street on this one. The Mayor said in his State of the City address that he wants to be judged on how many people move back into the city—well, he better act now.”

Joan Jackson said she is facing foreclosure after losing her job with the Detroit Rescue Mission Ministries, where she worked for 19 years. She said 60 to 70 others had also been laid off.

“I got denied unemployment because they hadn’t been paying into the state unemployment fund,” she said. “When I went to Michigan Step Forward for help with my taxes, I found out you had to have a job to qualify. Now my water is about to be shut off. I believe water should be free.”

Linda Campbell of the Detroit People’s Platform reads their demands to halt foreclosures to the city council March 24.

During the Council session, several members of the Detroit People’s Platform including Linda Campbell read their demands on the foreclosures into the record, saying they had delivered thousands of petitions demanding a halt on the foreclosures to the Treasurer’s office.

“Wayne County Treasurer Wojtowicz is in charge of foreclosing on 37,000 occupied homes for overdue property taxes on March 31st, affecting nearly 100,000 people,” Campbell said. “This represents the largest mass tax foreclosure in US history in one city at one time. Treasurer Wojtowicz has the power to stop it. Detroiters are being foreclosed upon due to incorrect tax bills with exaggerated property assessments and disputed water bill liens.

“Long-time residents are the heart and soul of Detroit. Ongoing displacement of our families from mortgage and tax foreclosures has been devastating. Public services are being cut and privatized, and Detroiters are being pushed out of their generational homes. To now lose another 100,000 residents would cut the city’s total population by 1/6 and tear a hole in the city’s cultural and economic fabric that can never be replaced.”

Mike Shane

Mike Shane

Mike Shane of Moratorium Now said, “This is an unprecedented crisis. This will mean that one out of every three families in Detroit have been foreclosed. The banks are responsible for this devastation of our neighborhoods. We need to sue them to force them to clean up our city.”

Cheryl West said she had lived in her home for 60 years, since childhood, but lost it to foreclosure in October, 2014.

“Now I have a landlady who is charging me $700 a month in rent, not including utilities. I applied for Michigan Step Forward funds before the foreclosure, but was denied four times,” West said.

One speaker summed it all up, quoting Ephesians 6:12, from the King James Bible:

“For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.”

Links to some groups fighting foreclosures:

Detroit People’s Platform at http://www.unitingdetroiters.org/ and https://www.facebook.com/DetroitPeoplesPlatform Sign the petition to let the Wayne County Treasurer know that 100,000 Detroit residents need a place to call home!

Moratorium NOW! http://moratorium-mi.org/

RICObusters https://www.youtube.com/channel/UCd3xqk6Kc778ASLAsRpV5ag

Detroit Active and Retired Employees Association http://dareafights.blogspot.com/

 

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Article source: http://voiceofdetroit.net/2015/03/29/unprecedented-katrina-of-tax-foreclosures-to-hit-detroit-wayne-county-march-31/