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Teresa Giudice’s lawyer: Couple won’t divorce, will avoid foreclosure on mansion

The insistent rumors that “Real Housewives of New Jersey” star Teresa Giudice plans to divorce her husband Joe after she finishes her federal prison sentence are not true, her lawyer James Leonard Jr. tells People magazine in an exclusive interview. The arrangement with People includes a new family photo of the Giudice clan at the Federal Correctional Institute in Danbury, Conn., where Teresa has been serving time since January. 

“While we have discussed many things, we have never discussed her divorcing Joe,” Leonard tells People. “If anything, as bizarre as it may seem, this experience of them being apart has only brought them closer … She has also talked about her future with Joe and the girls.” 

Teresa is serving a 15-month sentence for bankruptcy fraud and conspiracy to commit wire and mail fraud. With good behavior, her release date is scheduled for Feb. 5, although Leonard says she will be released into home confinement on Dec. 23. He says that despite reports of prison feuds, Teresa has been “a model inmate.” 

Addressing other rumors dogging the reality show star, Leonard did not deny that their Montville Township home is in the foreclosure process — NJ Advance Media obtained court documents earlier this month showing Community Bank of Bergen County intends to foreclose on the mansion, on the market for $2.99 million – but he spins the couple’s woes this way:

“I have been told that Joe is in the process of reconfiguring their mortgage with the bank. I do know that the house has been on the market for quite some time. I think they will either refinance their loan and keep the house or they will find a buyer and move into a new house. I do not envision a scenario in which their home will be foreclosed.” 

He did not address the foreclosure of her Jersey Shore summer home. A sheriff’s sale is still set for May 19 for their Manahawkin house, the Ocean County Sheriff’s Department confirmed Thursday. 

Leonard also says that he expects Teresa to return to “Real Housewives of New Jersey,” “assuming both sides can agree on a contract.” In an earlier interview with Extra, Joe has said “RHONJ” producers would have to offer a lot of money for the couple to return. 

Vicki Hyman may be reached at Follow her on Twitter @vickihy. Find on Facebook.

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Wachovia whistleblower now faces foreclosure from Wells Fargo

CHARLOTTE, NC (Rick Rothacker/The Charlotte Observer) -

A Charlotte-area whistleblower suing Wells Fargo in federal court is now facing foreclosure from the same bank.

Robert Kraus lost his job in 2006 after he says he raised red flags about questionable activities in the corporate and investment bank at Wachovia, now part of Wells Fargo. Since then, he says he has fallen behind on his mortgage because he hasn’t been able to find work in financial services.

“It’s impossible to support my family,” Kraus said in an interview. “I’m unable to find work in my field.”

Wells Fargo started foreclosure proceedings against Kraus and his wife, Julianne, in December, according to court documents. The Krauses are behind on payments on the $515,000 mortgage for their Waxhaw home. A hearing before the Union County Clerk of Superior Court is scheduled for June 9.

It’s not unusual for whistleblowers to fall on hard times, said Fred Alford, a professor of government at the University of Maryland who has written a book on whistleblowers. About half lose their jobs, and of those, many lose their homes, he said.

“When a would-be whistleblower calls me, I tell them: Check your bank account, check your mortgage, check your marriage, check your religion, because all of these will be put under a tremendous strain,” he said. “You’re not just going to blow the whistle and go find another job. It’s going to become your life.”

whistleblowers need a better support system, because society needs insiders to come forward about wrongdoing, Alford said.

“We are a society that idealizes the notion of the individual standing up against the system, but most individuals who stand up against the system get crushed,” he said.

Long-running fight

Soon after being recruited to Charlotte-based Wachovia in 2005, Kraus alleges he found “problematic practices” related to the booking of trades, the reporting of losses and other activities inside the investment bank, according to a lawsuit he later filed in state court.

Kraus, who was a controller in the unit, brought his concerns all the way to the then-head of the investment bank, Steve Cummings, according to the suit. But months later, in July 2006, a lawyer for the bank told Kraus that an internal investigation had uncovered no wrongdoing, and he was offered a severance package on a “take it or leave it basis,” according to the complaint.

With a pregnant wife and a new home under construction, Kraus accepted.

Two years later, Wachovia was in serious trouble, hobbled by losses in its mortgage portfolio and in the corporate and investment bank. San Francisco-based Wells Fargo swooped in to buy the faltering bank in fall 2008 at the peak of the financial crisis.

Kraus filed suit against the bank in 2010, but a judge dismissed the case a year later because the bank said his severance agreement barred him from suing. Wachovia has said Kraus’ allegations were “completely without merit,” and Cummings, now CEO of a subsidiary of a Japanese bank, has said he was confident the claims would be shown inaccurate.

Kraus, however, has kept up his fight.

In 2011, he and another whistleblower, Paul Bishop, filed a suit in federal court in New York alleging Wachovia’s investment bank violated accounting rules and skirted internal controls to pursue short-term profits, benefiting senior management at the expense of the company’s financial health. The case was unsealed in October 2014.

The complaint includes allegations that Wachovia, in violation of federal law and proper accounting practices, routinely placed loans in an off-the-balance-sheet entity called the College Street Funding Master Trust, known internally as the “Black Box.” Wachovia’s former headquarters was on College Street in Charlotte.

The goal was to skirt regulatory constraints on the amount of loans the bank could keep on its balance sheet, according to the suit.

In a 2005 email, a Wachovia executive, according to the suit, wrote that the accounting process was “held together with band-aids, spit and gum.”

Wells Fargo has said the bank “continues to believe these claims are without merit” and is seeking to have the suit dismissed.

Kraus and Bishop filed their lawsuit on behalf of the federal government, alleging the bank defrauded U.S. agencies that loaned money and provided other assistance to the bank in the financial crisis.

In such False Claims Act suits, whistleblowers can be eligible to receive up to 30 percent of any damages or penalties awarded under the action. The government has declined to join in the suit, but Kraus and Bishop can pursue the case on their own. Should they prevail, the government would still receive its share of any settlement or judgment.

Patrick Burns, co-director of the Taxpayers Against Fraud Educational Fund, said it’s not unusual for the government to decline to join False Claims Act lawsuits, and it’s happening more often. That’s because prosecutors don’t “like cases unless they are very simple and easy to explain,” said Burns, whose group advocates for effective whistleblower laws.

Some big cases declined by the government have proceeded with success, he said, with those cases resulting in at least $3 billion in recoveries.

‘I did my job’

Kraus, 44, doesn’t think it’s a coincidence that he faces foreclosure as his whistleblower lawsuit is pending. “I refuse to believe the bank is so dislocated that they’re not very aware of it,” he says.

Wells Fargo declined to comment on whether the foreclosure action was connected to the whistleblower case. “The loan currently is in the foreclosure process, but there is not a sale date scheduled,” a Wells spokesman said.

According to his 2010 lawsuit, Kraus received a loan modification from the bank after he sent a hardship letter explaining his dismissal from Wachovia. According to the suit, Wells Fargo pushed back payment on $395,000 of the balance until the end of the loan term and charged 2 percent interest on the remaining amount.

According to one of Kraus’ mortgage statements, his monthly payment is $1,192 for interest, principal and escrow.

Kraus says his wife works, but it’s not enough to keep up with the family’s bills. They have two children.

“The reason I can’t pay my mortgage is because I did my job at the bank,” he says. “I’m losing my house to the same bank.”

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Will State’s Foreclosure Mediation Program Expire Next Year?

HARTFORD — Legislators are considering two bills to extend the state’s foreclosure mediation program, which helped more than 3,200 homeowners stay in their houses from July 2013 through the end of last year.

The program, which began in 2008 as foreclosure starts surged, was set to expire at the end of June next year.

Continuing the program costs about $6.7 million a year to pay for salaries and benefits for 51 state employees.

Rep. Larry Butler, D-Waterbury, Co-Chairman of the Housing Committee, sponsored a bill that makes the program permanent. He said it’s been extended several times for a year or two already.

“The need for this isn’t going to go away. The extent of the need may diminish or increase for a time,” he said. “Let the agency decide how much staff is needed or how much money to secure for the need, vs. always trying to justify having it in place.”

Butler’s bill passed out of committee, as did a competing bill from the banking committee that would extend the program until 2019.

Tom Mangellow, executive vice president of the Connecticut Bankers Association, said the trade group had originally suggested the program sunset in 2017, but has signed off on the 2019 extension.

“We recognize there is a significant backlog in the foreclosure mediations,” he said, even as new foreclosure starts are back to pre-crisis levels.

According to the most recent data for the program, about 85 percent of homeowners who were in default started the program hoping to keep their homes, and the rest wanted what some call “a graceful exit” – selling the house for less than the mortgage balance, or turning over the keys without an official foreclosure.

About 26 percent of those seeking a mortgage modification had previously tried a repayment plan and had not been able to keep up with it.

Only 63 percent of those who were in the mediation program over the 18 months ending in December completed the process during that time, but of those who did, 72 percent got to keep their homes.

“You can’t argue with that success. That’s very significant,” Butler said. “It would be higher than that too, if the people who actually signed up to participate in it did so earlier rather than later.”

His bill making the program permanent passed unanimously out of the housing committee.

On average in Connecticut, homes that are foreclosed on without going through mediation take a year and 63 days to complete the process. Homes that are covered by the mediation program take two years and 104 days to complete a foreclosure.

About 45 percent of eligible homeowners do not sign up for mediation, though the instructions on how to do so are given with every foreclosure summons. Butler said he just heard that one of his relatives is losing a house to foreclosure, and never tried mediation.

Mangellow said overall, foreclosures in Connecticut are the fourth-slowest in the country. While that does help more people keep their homes, he said it also has “unintended consequences.” He said the housing market stays depressed longer, because year after year, there’s an elevated number of bank-owned properties.

Butler said it’s important to make the program permanent because if there is another recession that causes lots of foreclosures, it could take seven to 10 months to start over from scratch.

He said before mediation existed, he heard from a couple who had spent thousands of dollars with a company that claimed it could work something out with the lender.

“They used to have these fly-by-night operations that were just taking people’s money and they were nothing but scams,” he said.

Butler said he’s in close communication with the banking committee chairman, and he expects that a compromise bill between the two of them, with input from leadership, will be passed by the full General Assembly.

“We’ll all sit down and try to come up with something that makes sense. I don’t see this as an impossible thing to achieve,” he said. “We’ll probably be meeting in the next two weeks.”

Butler said he’ll still argue for making the program permanent, and he said he would be fine with adding language requiring that the department reduce employment as the number of cases ebbs, if that makes his bill more palatable to more legislators. The program employs 25 mediation specialists, nine caseflow coordinators and 16 office clerks.

If you need help with a foreclosure, call 1-877-472-8313.

Copyright © 2015, Hartford Courant

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Dallas initiates foreclosure against Patriots Crossing development

The partially fenced $4.5 million expanse of dirt called Patriots Crossing now serves no other purpose than as a makeshift parking lot for the VA Medical Center, visible far in the background. (Staff photo Oct. 8, 2014)

The partially fenced $4.5 million expanse of dirt called Patriots Crossing now serves no other purpose than as a makeshift parking lot for the VA Medical Center, visible far in the background. (Staff photo Oct. 8, 2014)

Years of failed effort by the city of Dallas to prompt a development called Patriots Crossing near the VA Medical Center came to a halt Tuesday as the city began foreclosure proceedings against the developer in an attempt to recoup a $4.4 million city investment.

The project, unveiled in 2009 and previously called Veterans Place, planned seven acres of apartments, shops and restaurants aimed at boosting development around the hospital. Dallas paid $4.4 million to developer Yigal Lelah to acquire property for the project, but Lelah struggled to secure the rest of the financing for his build.

Six years later, the land remains untouched. Mayor Mike Rawlings announced the foreclosure at an update on his GrowSouth initiative Tuesday evening, only hours after attorneys filed it.

Recent efforts to save Patriots Crossing have included an attempted partnership with prominent developer Jack Matthews, who was involved for several months, City Manager A.C. Gonzalez said. But even he couldn’t fix the financing problems.

“We explored the possibility of adding some capacity by asking one of our local developers who has a very good track record of bringing all kinds of projects to fruition,” Gonzalez said. But: “The financing of that project just did not make sense, even after adding Jack to the process.”

It’s unclear now whether the city will recoup the millions it gave to Lelah.

Gonzalez told the Dallas Morning News editorial board Wednesday morning that the city had “tried to be a good partner,” but had exhausted its options to make Lelah’s development work.

“We are putting ourselves and the fate of that property in a bit more risky situation, in that the city might be no longer having the kind of relationship that we had in the past with that piece of property, but so be it. We need to move on and make something happen there,” he said.

The foreclosure process will allow the city to either recoup its investment or take control of the property itself.

“We’re going to get either money or land,” Gonzalez said.

If it’s the latter, the city manager emphasized that the city’s not interested in letting the property become a parking lot for the hospital, but will continue to pursue development there.

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Wrigley rooftops closer to resolving foreclosure suit

A judge dismissed a federal lawsuit against three Wrigley rooftop businesses facing foreclosure, bringing another rooftop legal battle closer to a resolution.

lRelated Wrigley Field improvements don't look as good from the rooftops
Chicago CubsWrigley Field improvements don’t look as good from the rooftopsSee all related

Federal judge lets Wrigley upgrades continue, denies rooftop firms' motion

In November, Fifth Third Bank sued the rooftop operations at 3617, 3619 and 3637 N. Sheffield Ave. and their owners, alleging the businesses owed more than $18 million on mortgages and missed payments. The bank later sold a portion of the debt to Sheffield Finance, an entity owned by Jerry Lasky and Murray Peretz, partners in a Chicago commercial real estate business, which replaced the bank as plaintiffs in the case.

On Wednesday, Lasky declined comment.

Judge Joan Gottschall approved the request for dismissal on Tuesday by Sheffield Finance, which reserves the right to reintroduce foreclosure proceedings if an agreement can’t be worked out between the rooftops and Sheffield Finance. The firm said in its filing that it is not waiving any of the defaults.

The rooftop businesses’ majority owner, Tom Gramatis, settled with the bank this year. Minority owners Dan Finkel and Max Waisvisz and their attorneys could not be reached.

Similar to the other rooftop businesses lining Waveland and Sheffield avenues, the three on Sheffield charge admission for bird’s-eye views of Cubs games.

The team continues its much-delayed $375 million overhaul of the 101-year-old stadium. While the 3,990-square-foot left-field video board was ready for the Cubs’ home opener, the left-field bleachers won’t reopen until May and the right-field bleachers remain closed until June. Many owners of the rooftops surrounding the historic ballpark have said the Cubs’ outfield wall signs and video boards would block their views into the ballpark and put them out of business.

A federal lawsuit against the Cubs brought by the controlling owner of Skybox on Sheffield and Lakeview Baseball Club accused the team of violating the terms of the revenue-sharing agreement; that suit is pending. The judge has rejected those businesses’ requests to stop installation of the team’s 2,250-square-foot right-field video board.

Those same rooftops, controlled by commodities trader Edward McCarthy, recently pulled their lawsuit against the city of Chicago and the Commission on Chicago Landmarks. That suit alleged that approval for the signs and video board violated an ordinance protecting Wrigley Field’s historic features.

Twitter @jaredshopkins

Copyright © 2015, Chicago Tribune

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Foreclosure picture continues to brighten in Colorado Springs, report shows

The area’s foreclosure rate – measured by the percentage of local loans in some stage of foreclosure – fell to 0.68 percent in February, CoreLogic’s report showed. That’s down from 0.86 percent in the same month last year. In February 2010, when the local real estate market still was dealing with fallout from the recession, the rate was 1.67 percent.

The highest foreclosure rates in February were in portions of central and far eastern El Paso County, according to CoreLogic.

Meanwhile, the percentage of Springs-area mortgage holders who were delinquent on their loan payments by 90 days or more fell to 2.35 percent in February, down from 2.65 percent a year earlier. Five years ago, the percentage was 4.85 percent.

Generally, local real estate industry experts have credited an improving single-family housing market, lower mortgage rates and a better economy for the reduction in foreclosure activity.

As property values have increased and demand has stepped up among buyers, financially troubled homeowners have had more opportunity to either sell their home or refinance mortgages to avoid foreclosure.

Records compiled by the El Paso County Public Trustee’s Office have shown a similar downward trend in foreclosure activity the past few years.

In the first quarter of 2015, foreclosure notices sent to El Paso County property owners totaled 312, a 46.6 percent decline from the same period in 2014 and down nearly 75 percent from the first quarter in 2010.


Contact Rich Laden: 636-0228

Twitter: @richladen

Facebook: Rich Laden

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San Antonio’s housing market keeps improving as foreclosures keep falling


Home foreclosures are on the decline in some of the country’s largest metros — including in San Antonio, CoreLogic reports.

James Aldridge
Web Editor- San Antonio Business Journal


Foreclosure rates in the San Antonio-New Braunfels metropolitan area were down for the month of February, compared to the same period a year ago, according to housing market data released Wednesday by CoreLogic.

The foreclosure rate for outstanding mortgage loans for the San Antonio area was 0.69 percent, a decrease of 0.12 percentage points over the February 2014 foreclosure rate. The San Antonio area had fewer foreclosures than the national foreclosure rate of 1.43 percent in February.

Also in the San Antonio area, the mortgage delinquency rate fell. Mortgage loans that were 90 days or more represented 3.11 percent of all loans in February 2015, compared to 3.63 percent during the same period a year before.

Irvine, California-based CoreLogic (NYSE: CLGX) is a global property information, analytics and data-services provider for the real estate industry.

James Aldridge oversees online content of the newspaper; edits and reports stories for the online edition.

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Coloradans charged inflated foreclosure fees

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Foreclosures Still Rising in “Judicial Foreclosure” States

As the country works its way further out of vestiges of the Great Recession, foreclosure notices have generally reached new lows. This isn’t the case everywhere, though. Indeed, in nearly half the country, auctions for foreclosed properties are actually increasing — primarily where the backlogs of court cases are now working themselves out of the system.  Rehab investors should take note, as the market for “flipping” opportunities may be good in such markets.  

Foreclosure Filings Are Generally Back to Pre-Recession Levels

Foreclosure filings — default notices, scheduled auctions, and bank repossessions — decreased again in February and now stand at their lowest levels since July 2006, according to real estate data provider RealtyTrac.  As of February, the U.S. foreclosure rate was now one out of every 1,295 housing units.  

Where the foreclosure processes are handled efficiently — for example, in states where deeds of trust are used and “statutory” foreclosures can be dealt with relatively quickly — foreclosure numbers are in some cases below pre-recession levels.


“This eight-and-a-half year low in foreclosure activity is a significant milestone and a sign that nationwide foreclosure activity is on track to return to historic norms this year,” said Daren Blomquist, vice president at RealtyTrac

But Slow Foreclosure Processes Mean Activity is Still Rising in Many States

Despite the national decrease from a year ago, 24 states posted a year-over-year increase in foreclosure activity.  This is largely because many states still rely on judicial processes to handle foreclosures, and most of those states have experienced significant backlogs in the courts that have slowed the process of driving those cases to resolution.

“The cleanup of deferred distress is continuing in markets where a logjam of in-limbo foreclosures is still lingering from the housing crisis — as evidenced by rebounding foreclosure activity in those markets,” said Mr. Blomquist.

Foreclosure “starts” are often measured by the scheduling of foreclosure auctions, so that foreclosure “activity” is now showing a marked uptick in many judicial foreclosure states.  22 states posted year-over-year increases in foreclosure starts, including some states with consistent increases over the last few months like Nevada, Massachusetts, and Texas.  (For Texas, the rise is perhaps better explained by the recent decline in oil prices, which has altered the market dynamics in a state previously experiencing a real estate boom.)  25 states posted a year-over-year increase in scheduled foreclosure auctions, with states having consistent recent increases including New York, New Jersey, and Washington. Finally, 15 states posted increases in lender repossessions (REOs), including Maryland, Ohio, and North Carolina.  


“Zombie” Foreclosures Increase

Approximately 25% of current foreclosures have become “zombie” properties – homes in the foreclosure process but which have already been vacated by the homeowners.  These represent further opportunity for flippers, since the properties are essentially ready for renovation as soon as the ownership transfer can be completed.   “In states with a bloated foreclosure process, the increase in zombie foreclosures is actually a good sign that banks and courts are finally moving forward with a resolution on these properties that may have been sitting in foreclosure limbo for years,” said Blomquist.

Average Flipping Profits Are Up, Even Though Aggregate Flips Have Decreased

The average gross profit per flip increased in Q4 2014, to an approx. 37% gross return, according to another RealtyTrac report.  This despite the fact that flipped houses have now hit a recent low as a portion of overall home sales.

“In many cases the best neighborhoods for profitable flipping in a slower-appreciating market are those that come with a higher risk because of location and condition of properties, but also have a bigger upside if investors are able to correctly predict the path of progress in the region,” said Blomquist

Flippers will thus need to be more selective and creative about the properties and neighborhoods they target — but most investors completing flips in the fourth quarter seem to have done just that.  Although the share of flips in the overall housing market decreased, the average gross return per flip increased.

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A Squatter’s Last Stand at a Condemned Bronx Barn

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