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Tax foreclosure threat becomes latest hardship in Flint

Flint — Fresh out of prison last summer, Jamal Johnson returned to his boarded-up home on the city’s east side and sought to rebuild his life.

His sister had watched the house, but what shocked Johnson, 37, was an unpaid water bill that spiked to a staggering $3,192. The majority of the bill was generated when he was locked up for weapons violations. If unpaid, according to Flint city ordinance, Johnson would lose his home.

Johnson was one of nearly 8,000 homeowners who were in danger of having tax foreclosure proceedings start last week until the Flint City Council approved a one-year moratorium on the tax liens — which covered residents with two years of unpaid water and sewer bills going back to June 2014.

But the temporary reprieve is in question. It faces an uncertain fate before the state-appointed Receivership Transition Advisory Board, which monitors Flint’s finances since the city’s emergence from state oversight in April 2015 and is scheduled to vote on the moratorium at its June meeting.

Outstanding water liens have become the latest hardship as an impoverished Flint still reels from a lead-in-water crisis that was first publicly acknowledged less than two years ago.

More than 100 residents showed up at last Wednesday’s raucous council meeting, upset and insulted that they could lose their homes after being charged for water they couldn’t drink and rarely, if ever, used. There was a May 19 deadline for the thousands of homeowners to pay up under a 1964 ordinance, but the officials approved a one-year reprieve partially in part to give them time to alter the law.

Some residents were slapped with tax liens after refusing to pay their water bill for years after developing skin rashes and seeing behavioral problems in their children. Then there are cases like Johnson’s.

“The house was boarded up when I came back,” said Johnson, who was arrested in 2012 and hadn’t been home until he was released on parole last June. “My sister kept going back and forth watching the house for me. But she said she wasn’t there. I’m like, why I’ve got to pay? I don’t understand it.”

If the council hadn’t acted, the city would have started enforcing the liens with foreclosure proceedings.

Maria Williams, 63, who lives on the city’s north side, told the council that she is dumbfounded that the city would put a lien on her house for the $1,000 owed for water that made her and her grandchildren sick.

“I’ve been on my own since I was 18, years ago, and never had a problem with paying the water bill,” said Williams, whose granddaughter, Deneika Booth, owes $1,110 for water. “Now I don’t feel like I should have to pay for this water.”

Williams blamed her problem in part on the state emergency manager who decided to switch from the Detroit area water system to the corrosive Flint River.

“And it was a cover-up,” she said. “People did know about this.”

The angst has led to a recall effort against Mayor Karen Weaver, who a year ago was in Washington, D.C., for meetings at the White House with President Barack Obama to lobby for more federal aid and get other attention for the city.

The city is between a rock and a hard place, Weaver said. There is righteous residential anger over water they could not use, but the city still needs to collect bills to stay financially afloat and not fall back under state control, she said.

Weaver said she will honor the moratorium and “follow the law.”

“It’s not like something new has been put in place,” she said about the 1964 ordinance. “We’re doing what has always been done. This was something that council did. This is the legislative body. My role is to execute the law. So I’m carrying out the law that’s put in place.”

The ordinance wasn’t enforced last year because Flint offered “credits” to its residents through state financing, city officials said. The state ended the credits at the end of February, noting that lead levels had fallen to 12 parts per billion, which is under the federal action standard.

Weaver met with Gov. Rick Snyder in Lansing in mid-February about getting an extension, but was rebuffed. She complained about getting “short notice” about the end of water bill credits, but the governor’s office said it told the city in mid-December it would likely stop the credits one month after federal water standards were met.

Weaver said she’s heard some stories about exorbitant bills like Johnson’s, and “we want those people to come to us so we can really investigate those and see what happened. We had somebody who had a crazy bill and found out there had been a leak going on.”

Edward Taylor, a former Flint council member and landlord in the city, has his own water lien story. He said he was hit with a $1,053 bill from a home he rented out to a woman he recently evicted. Taylor said the woman illegally turned on the water, so the city is holding him responsible for paying up.

“I get home from out of town, and I get a water bill in my name for that particular house, and I’m like, why did I get a water bill, I don’t have water on in the city,” Taylor said. “Evidently the lady never turned in the water affidavit, and she got it turned on illegally. So what they want to do is charge me for it. I told them no.”

Taylor is promising to sue the city if he doesn’t get relief and the bill wiped away.

“That’s not the way it works,” he said, “not when I do everything that I’m supposed to do.”

After the moratorium vote, council President Kerry Nelson said: “the people are suffering enough” for being forced to pay for water they cannot drink and are reluctant to use.

“The calls that I received were numerous. Everywhere I go, people were saying: Do something,” Nelson said. “I did what the charter authorized me to do” with a temporary moratorium “until we look at the ordinance and get it corrected. It needs work. It’s 53 years old. We must start doing something for our community.”

The council president insisted the Snyder administration needs to step up “and help us.”

“They created this,” Nelson said. “The government doesn’t get a free pass.”

lfleming@detroitnews.com

(313) 222-2620

Twitter:@leonardnfleming

Article source: http://www.detroitnews.com/story/news/michigan/flint-water-crisis/2017/05/24/tax-foreclosure-threat-becomes-latest-hardship-flint/102085504/

After Complaints, Fannie Mae Will Stop Selling Homes to Vision …

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Article source: https://www.nytimes.com/2017/05/23/business/dealbook/after-complaints-fannie-mae-will-stop-selling-homes-to-vision-property.html

Home Foreclosure Attorney Provides Free Legal Advice to California …

This press release was orginally distributed by SBWire

Los Angeles, CA — (SBWIRE) — 05/23/2017 — When homeowners face foreclosure, a home foreclosure attorney can save their home and file bankruptcy or file a lawsuit. In California, one in every 2260 homeowners has faced home foreclosure as of April 2017 (RealtyTrac). While foreclosure rates in California have improved over the years, the threat of losing one’s home still exists. Fortunately, there are legal actions they can take to stop foreclosure.

Filing bankruptcy helps homeowners stop foreclosure fast. There are two types of bankruptcy homeowners commonly choose to stop foreclosure: chapter 7 and chapter 13 bankruptcy. Homeowners need to talk to an experienced home foreclosure attorney to evaluate their situation before selecting which chapter to pursue.

In a chapter 7 bankruptcy, homeowners can wipe out all credit card and medical debt, but must be up to date on mortgage and car payments and must not have too much equity in the house. While homeowners can lose their property with this chapter, most do not. “The benefit of a chapter 7 is that at the end of the case, [homeowners] are discharged debt-free,” said Attorney Lauren Rode. However, there are some exceptions to this, such as student loans.

With a chapter 13 bankruptcy, homeowners can stop foreclosure immediately. The homeowner will then have 3-to-5 years to fully repay their missed mortgage payments [arrears]. An advantage of a chapter 13 is that homeowners do not have to fully repay their unsecured debt (credit card or medical bills).

While homeowners can stop foreclosure by filing bankruptcy, there are times when they face foreclosure due to their lenders’ wrongful practices. In these cases, homeowners can file a lawsuit against their lenders by hiring a home foreclosure attorney.

The California Homeowner Bill of Rights protects homeowners from wrongful practices by their lenders and encourages fair lending and borrowing practices. This means that mortgage lenders cannot deceive their borrowers such as “lying to [them] about putting a hold on [their] foreclosure while [they] are being checked for modification,” (Attorney Lauren Rode). If homeowners are being treated unfairly, a home foreclosure attorney can help file a lawsuit against their lenders.

Homeowners facing foreclosures should act quickly to save their home. Fortunately, they can stop foreclosures by filing a chapter 7 or 13 bankruptcy or filing a lawsuit against their lender. By taking legal action, home foreclosure rates in California can continue to improve.

For free legal advice, California homeowners can call Consumer Action Law Group at 818-254-8413 to talk to a home foreclosure attorney for free.

About Consumer Action Law Group
Consumer Action Law Group is a law firm located in Los Angeles, California. Their bankruptcy lawyers have successfully stopped hundreds of foreclosures for Stockton, California residents. Individuals who live in Stockton, California can call Consumer Action Law Group for free stop foreclosure advice. Bankruptcy Attorneys at Consumer Action Law Group have stopped foreclosures for homeowners within 5 minutes. For a free meeting with a lawyer today, Call Consumer Action Law Group directly at 818-254-8413.

For more information on this press release visit: http://www.sbwire.com/press-releases/home-foreclosure-attorney-provides-free-legal-advice-to-california-homeowners-who-are-facing-foreclosure-811450.htm

Article source: http://www.digitaljournal.com/pr/3355821

Save Red Rock attorney, ex-state senator to run for Clark County Commission – Las Vegas Review

Save Red Rock attorney and former Nevada state Sen. Justin Jones announced Monday that he is running for the Clark County Commission.

The 42-year-old Democrat intends to file candidacy for District F to replace term-limited Susan Brager, a fellow Democrat, in 2018.

“I think Clark County needs people who are ready, willing and able to stand up for the people who live in this community and want to make it a more livable community,” Jones said. “One thing I think people know about me, I never give up. If there’s a challenge I never stop fighting, and I think that’s what we need at the county commission level.”

A county resident since 2001, Jones said he is concerned about “haphazard” development in the southwest Las Vegas Valley. He also wants to focus on working with the Regional Transportation Commission to improve public transportation.

“I think there’s an opportunity for better urban planning in the county,” he said.

Jones graduated from George Washington University Law School in 2001. He is a partner at the law firm Jones Lovelock, which he formed this month with attorney Nicole Lovelock.

A familiar face

Jones will likely be familiar to people who follow local and state government.

He was elected to the state Senate in 2012. During his one term in office, Jones sponsored the Nevada Homeowner’s Bill of Rights, which prohibited banks from “dual-tracking.” Dual-tracking is a practice where a bank forecloses on a home while it is also processing a homeowner’s submission for a loan modification to prevent foreclosure. The bill passed unanimously.

Recently, Jones has represented the environmental nonprofit Save Red Rock in its attempts to halt a developer’s plans to build about 5,000 homes on Blue Diamond Hill, near Red Rock Canyon Conservation Area. He’s argued before the county commission that land-owner Gypsum Resources shouldn’t be granted a zoning change to build the community.

No zoning change has been granted. However, commissioners are allowing Gypsum Resources to submit detailed plans on what it wants to build.

“Obviously I was disappointed,” Jones said. “But I also feel that there’s a commitment by many of the commissioners to protect Red Rock, and I want to be a part of that.”

Republican candidates

Two Republican candidates, attorney Tisha Black and auto insurance claims adjuster Mitchell Tracy, have also announced plans to run in District F.

The county’s official filing period for candidates begins in March.

Contact Michael Scott Davidson at sdavidson@reviewjournal.com or 702-477-3861. Follow @davidsonlvrj on Twitter.

Article source: https://www.reviewjournal.com/news/politics-and-government/clark-county/save-red-rock-attorney-ex-state-senator-to-run-for-clark-county-commission/

Several Pendragon Properties Rentals Facing Foreclosure

Photo: Steve Burns

Nine rental properties owned by Pendragon Properties are facing foreclosure.

IU Credit Union is taking a Bloomington landlord to court because he’s allegedly more than $300,000 behind on loan and property tax payments for several of his rental properties. Jeff Jones owns Pendragon Properties, which offers a variety of apartment, house and commercial rentals in Bloomington.

According to court documents, Jones defaulted on loans for Shamrock Pointe Apartments, Shadow Pointe Apartments, The Crossing at Walnut Springs, Hoosier Flats, Roll Avenue Apartments and four other rental properties.

Shamrock Pointe resident Chris McMillen says he found out about the cases when he got an unusual knock on his door.

“It was the sheriff, which is never good news generally,” McMillen says. “So, he had a large packet of paper and just said roughly that our landlord was in court for something to do with something and that they could be seizing his property because of it.”

IU Credit Union filed the foreclosure cases earlier this year but wouldn’t comment on the litigation.

McMillen says he hasn’t heard anything from the property managers, either.

“They haven’t said a word, haven’t bothered to contact us or anything,” he says.

Court documents say because of the default, IU Credit Union is requesting Jones pay the remainder of his loans in full, as well as any interest and late fees. That amounts to more than $5 million, which increases every day until the payments are received.

Neither Jones nor his attorney responded to requests for an interview.

The tenants and the City of Bloomington are also named in the civil suits because they have an interest in the outcome of the cases. Court documents show Jones owes the city’s sewer department hundreds of dollars. They also say Jones owes Housing and Neighborhood Development more than $654,000 in fines. The city’s taken him to court for a variety of issues with his rental properties over the past several years. The violations range from not having a valid occupancy permit, to having holes in the walls and ceilings of some rental units.

HAND Director Doris Sims says all rental properties must be registered with the city and are subject to inspections. If a property isn’t in compliance and the owner doesn’t fix the violations in a timely manner, the city can take legal action.

“We look at it on a case-by-case basis: how long the property has been out of compliance, is the property owner bringing it up to compliance?” Sims says. “So, we look at different factors. And, then what happens is then the courts will assess what the fines are.”

Sims says the city can’t stop a landlord from renting out properties, even if there’s a history of repeat violations.

“As long as someone follows what our rental code says … they can rent property as long as they have a valid rental permit,” Sims says.

The big question many Pendragon Properties tenants have is what all of this means for them.

“I was worried we would lose our lease right away,” McMillen says. “But, I asked the sheriff if that was the case and he assured me that that wouldn’t be the case and our lease would stand. And, the worst case scenario that we’d hopefully get a new landlord.”

If IU Credit Union forecloses on the properties, they’d be put up for auction at Sheriff’s Sales. But the tenants’ current leases still stand.

You can look up violations for Bloomington rental properties by filling out a request form with the HAND department. Sims says that’s something tenants should always do before signing a lease.

Article source: http://indianapublicmedia.org/news/pendragon-properties-rentals-facing-foreclosure-120001/

Former Tennis Pro Says East Bay Landlord Michael Marr Was Major Player in Scheme to Rig Foreclosure Auctions

click to enlarge

  • Activists outside of Marr’s Oakland office last year.

Former tennis pro-turned real estate investor Douglas Ditmer testified in federal court today that one of the East Bay’s biggest landlords, Michael Marr, was a key player in a massive scheme to rig foreclosure auctions between 2008 and 2011.

Marr’s company, Community Realty, currently owns about 280 houses and small apartment buildings in Alameda County, according to public records. About 90 percent of these homes are located in Oakland. Many were obtained at foreclosure auctions.

See also: Trial Begins for East Bay Landlord Accused of Rigging Foreclosure Auctions

Ditmer admitted to participating in a conspiracy involving numerous investors who suppressed bidding on foreclosed homes at public auctions. The investors would later divvy the properties up at private auctions and pay each other kickbacks.

Although Ditmer already pleaded guilty, he is cooperating with the government in hopes of obtaining a more lenient sentence.

On the stand, Ditmer said Marr and his employees were frequently at the auctions, held on the steps of the Rene C. Davidson Courthouse in Oakland and the courthouse in Martinez, and that they participated in the bid rigging.

“There was a group of us that would cease to bid at the public auction, deliberately,” Ditmer explained. “Then we would hold our own separate auction, called a round, and we divided the profits from these secondary auctions among ourselves.”

By simply nodding his head at another bidder, Ditmer claimed he could drop out of a public auction for a specific property with the agreement to bid on it later in a private round.

The government contends that by agreeing to not bid against each other and cutting short the public auction, the investors could reduce the final price tags on properties. This cheated banks and taxpayers, as well as people who were participating in the foreclosure auctions but weren’t in on the conspiracy.

Ditmer said approximately ten properties would be auctioned on an average day at each courthouse. As many as four could end up being diverted to the private rounds. This happened day after day, five days a week, for several years on end.

The government showed aerial pictures of the courthouses to the jurors and asked Ditmer to describe where the rounds would take place. Ditmer said the conspirators would conduct the rounds in locations just far enough away to maintain secrecy. In Oakland, one popular spot was the bus shelter on 12th and Fallon. Another spot was the grassy area across 13th Street.

“You could conceal yourself a little bit,” he said about these locations.

But later, when the FBI began investigating the auctions, listening devices were placed in the bus shelter, and agents staked the area out in vehicles to secretly film Ditmer, Marr and others. Undercover FBI agents wearing wires also posed as bidders to gather evidence.

One of them, FBI Special Agent David Lewis, also testified today. Lewis told the jury he participated in 50 auctions in Alameda County and was able to participate in three of the illegal rounds.

When asked by a prosecutor to name some of the major players in the conspiracy to stop bidding at the public auctions and organize the private rounds, Ditmer identified Marr.

“He was one of the people out there involved in it,” Ditmer said. He also identified Gregory Casorso and Javier Sanchez, two of Marr’s close business associates as men who helped organized the bid rigging. Casorso and Sanchez are on trial along with Marr.

After some auctions, investors would go to Marr’s Fruitvale Avenue offices in Oakland’s Dimond District, to “settled up,” meaning to determine how much money the winning bidder owed those who helped suppress bids, testified Ditmer. He told the jurors he paid Marr in some cases, and took payoffs from Marr in exchange for his participation in the bid rigging scheme.

Cash was the preferred means of making a payoff because, according to Ditmer, it was “untraceable,” and payoffs were typically in the range of several thousands dollars.

In 2011 Ditmer was approached by two FBI agents who were part of an extensive investigation into the bid rigging conspiracies that were being organized by networks of investors at various foreclosure auctions throughout Northern California. He told the court he initially “was in a state of panic” and began destroying incriminating evidence, including bid sheets that named the participants of the private rounds. But after talking to an attorney, Ditmer held onto the evidence and eventually turned it over to federal prosecutors who are now using it to prosecute Marr and others.

In court today, prosecutors showed numerous bid sheets to jurors and had Ditmer identify the people who took part in the rounds.

According to one of the bid sheets, about a dozen investors agreed at the public auction to not bid on a foreclosed Shaw Street home in deep East Oakland. Later at the private round for the house, Marr’s asssociate Casorso outbid Ditmer, who was only willing to pay an extra $18,400 for the property.

Another bid sheet for a house on Lake Chabot Road in Castro Valley included the initials “MM.” Ditmer said this was Marr, and that her personally took part in the illegal round.

The trial of Marr, Casorso, and Sanchez is on its fourth day. Check back for updates on the trial in the comings weeks.

Article source: http://www.eastbayexpress.com/SevenDays/archives/2017/05/19/former-tennis-pro-says-east-bay-landlord-michael-marr-was-major-player-in-scheme-to-rig-foreclosure-auctions

Man scams homeowners out of $43000, investigators say

A Tamarac man scammed tens of thousands of dollars from three homeowners who were falling behind on their monthly payments during the mortgage crisis, investigators say.

Michael Anthony Haynes persuaded is accused of persuading the homeowners to donate their homes to a “trust” he ran and then pay him rent. In turn, he would get them their homes “free and clear” after three to five years, according to a Broward Sheriff’s arrest report.

Instead, Haynes, 52, made off with more than $43,000 of the homeowners’ money, the report said.

The plot started taking shape in 2012, according to the report.

Investigators say Haynes told the three homeowners that he ran the Michael Anthony Haynes Charitable Remains Trust IRA Corporation. Haynes told them to stop paying their mortgages and ignore any notices from their banks about foreclosure. He promised he would take care of everything, according to the report.

Besides paying him rent, Haynes also got the homeowners to pay him $1,500 to $2,000 for “forensic reports” on their mortgages.

But after two to three years of rent payments, two of the victims had their banks foreclose their homes. The third homeowner managed to get their deed back from Haynes with the help of a lawyer, but still had to deal with a foreclosure, investigators said.

It’s unclear how Haynes was eventually tracked down, but he was taken into custody Tuesday in another state and brought back to Broward County. He was booked into jail on three counts of grand theft and released Friday on bonds totaling $30,000.

Efforts to reach Haynes for comment were not successful.

Article source: http://www.sun-sentinel.com/news/crime/fl-sb-mortgage-grand-theft-20170519-story.html

Michigan AG suspends probate foreclosure practice in wake of …

(WXYZ) – The Michigan Attorney General is suspending a controversial probate practice that 7 Investigator Heather Catallo recently exposed.

She’s been showing you how several local families are losing large parts of their inheritance to certain public officials who have teamed up with real estate brokers.

Now Attorney General Bill Schuette wants this practice to stop while his office takes a very close look at what’s been happening with these cases.

“It’s sad to me that people are out there doing that,” Joanne Zaremba told Catallo last month.

Joanne is one of several rightful heirs who say they were blindsided when someone else opened a probate estate in a deceased relatives name. That meant Joanne could have lost her late mother’s home to a complete stranger. And she’s not alone.

“We were summoned to court, someone opened a probate estate in his name,” said Kristin Rekowski about her late father.

Real Estate Broker Ralph Roberts has teamed up with some Attorney General-appointed lawyers called Public Administrators. The Public Administrators and Roberts’ company, Probate Asset Recovery, bill the estates for thousands of dollars, plus Roberts gets real estate commissions when they sell the homes.

“I find properties. I believe there’s a benefit, so I then tell a public administrator, here’s the benefit there,” said Roberts in November 2016.

“So you’re getting the real estate fees, and you’re getting the Probate Asset Recovery fees,” asked Catallo.
“If we’re successful, yes,” said Roberts.  Roberts admitted he often take 1/3 of the total estate assets.

In many of the cases, the houses at stake are in foreclosure or the owners were behind on their taxes. Now that we’ve exposed this practice, the Attorney General is suspending all Public Administrators from opening any new estates with homes that are in foreclosure or those that owe taxes.

During the suspension, Attorney General Schuette’s will be reviewing whether they need to come up with additional rules for how to handle these estates.

Schuette also indefinitely suspended Public Administrator Cecil St. Pierre from Warren as part of this probe into the probate practice.

f this has happened to you, click HERE to file a complaint with the Michigan Attorney General, who appoints Public Administrators.

Click HERE to file a complaint with the Attorney Grievance Commission.

Click HERE to file a complaint with the State of Michigan against a real estate agent/broker.

If you have a story for Heather Catallo, please email her at hcatallo@wxyz.com or call 248-827-4473.

Article source: http://www.wxyz.com/news/local-news/investigations/michigan-ag-suspends-probate-foreclosure-practice-in-wake-of-investigation

Legislative Loophole May Make Foreclosures Easier

Thanks to a new law designed to address blighted and abandoned properties and a growing number of house flippers, it may not take long or much to lose your home in Prince George’s County.  Foreclosures, in the county, are on the rise again and a legal loophole has allowed some homeowners to be pushed out of their homes in as little as six months through the new foreclosure process.

(Stock Photo)

The fast-track provisions for home foreclosures in the county are included in Maryland HB 702/SB 1033, which passed the Maryland General Assembly unanimously, and is on its way to Gov. Hogan’s desk for his signature.  During the process, Community Blight Solutions of Cleveland, which helped to push through a similar law in Ohio, say they worked with consumer advocates, local governments, banks, and mortgage brokers to adopt amendments that improved the bill while maintaining its intent to expedite the foreclosure process.

The original intent of the law was to help communities eliminate blight caused by vacant properties, but instead it may become a launching pad for private investors (house flippers) and mortgage companies to push people out of their homes quicker. This new law will significantly expedite the foreclosure process for vacant properties in an effort to get them back on the tax rolls as soon as possible.

“Blight caused by vacant properties is a serious problem in certain Maryland communities,” said House bill sponsor Maryland State Del. Marvin Holmes (D-District 23b). “The longer properties remain vacant – the greater the chance problems will occur, including vandalism, crime, and lower property values.”

While that may be true in several communities because banks rarely re-deed a property after foreclosing on it to save money, a growing number of savvy real estate investors are using the law to move people out of their homes quickly and in some cases illegally.

HB 702/SB 1033 is supposed to offer significant protections for homeowners including: requiring secured parties to serve a petition for expedited foreclosure on the mortgagor and post a notice on the property and allowing the owner of the property to challenge any finding that the property is vacant and abandoned.  The bill authorizes a secured party to expedite the foreclosure process provided the party can demonstrate to a court that the property is vacant and abandoned by satisfying at least three of eleven specific criteria listed in HB 702/SB 1033 (e.g., utilities disconnected, windows and entrances boarded up).

To date those protections have been few and far between in Prince George’s County where there are a growing number of foreclosed homeowners who claim their homes were taken without due process and without the proper standing or original signatures from court officials. For instance the County Clerk allows a stamped signature to move a foreclosure forward.

“We have found that all of this is a massive conspiracy,” Patricia Washington, who leads the Justice for Homeowners Movement in the County, told the AFRO.  She held several rallies at the Courthouse protesting foreclosures. “I had one Judge to tell me to stop. It’s criminal what this county is allowing to happen to homeowners who get behind on their mortgages.”

In an effort to reduce foreclosure backlogs –- which is not the same as reducing foreclosures -– private real estate investors with capital and connections can snap up a bunch of houses –- sometimes before a foreclosure sale -– and then turn around and sell the houses at a significant profit.

Integrity Professional Contracting, located in the county, purchased a four bedroom, four bathroom house located at 7800 Suiter Way, in Landover, for $73,000. The Washington Post’s real estate report listed Mark H. and Gerard W. Wittstadt as the sellers. However, Maryland public records show that the actual homeowner was Olusegun A. Bright. Bright bought the house in 2005 for $215,000. Forced into foreclosure after the collapse of the real estate market, he sold at enormous loss.

Bruce Branch (Courtesy Photo)

The Wittstadts were what is known as substitute trustees. In Maryland, these companies help push along the process of foreclosure. When a homeowner falls behind on mortgage payments, the bank holding the mortgage note can contract with a foreclosure firm — which acts as substitute trustees, standing in for the lender -– rather than dealing directly with the homeowner. Sometimes this arrangement works out well for the bank, which has fewer upset borrowers to deal with and fewer individual cases to decide justly on the merits.  Integrity Professional Contracting sold the 7800 Suiter Way property on October 10, 2013, for $193,000.

“You have to know somebody to get those deals,” a mortgage broker, who didn’t want to be identified, told the AFRO. “You just can’t walk up to the county steps and think you are going to buy a foreclosed property. By the time the sale happens the deal is done. A lot of times, and I can’t prove this, they don’t make it out of the County Clerk’s Office. The cream is taken off the top.”

Article source: http://www.afro.com/legislative-loophole-may-make-foreclosures-easier/

Mnuchin’s former bank in $89 million settlement over reverse mortgages


WASHINGTON U.S. Treasury Secretary Steven Mnuchin’s former bank agreed to pay $89 million to settle allegations it wrongfully sought payments from a federally insured reverse mortgage program, the U.S. Department of Justice said on Tuesday.

Austin, Texas-based Financial Freedom, once a unit of OneWest Bank, obtained insurance payments for interest from the U.S. Department of Housing and Urban Development (HUD), despite mortgage holders being ineligible for them, according to the settlement agreement.

With reverse mortgage loans, seniors borrow money against the equity they have built in their homes. To protect lenders, HUD provides mortgage insurance through a program administered by the Federal Housing Administration.

The government accused Financial Freedom of seeking to obtain certain insurance payments between 2011 and 2016, although it did not meet deadlines for property appraisals, claims submissions and foreclosure proceedings.

Financial Freedom was a unit of OneWest, a bank formerly known as IndyMac, a failed lender Mnuchin and his investor group acquired in 2009 and rebranded.

The bank foreclosed on more than 36,000 homeowners, leading housing advocates to dub it a “foreclosure machine.”

Financial Freedom was a division that handled loans to seniors. Mnuchin grew OneWest into Southern California’s largest lender and sold it for $3.4 billion to CIT Group Inc (CIT.N) in 2015.

At his confirmation hearing, Mnuchin denied that he ran a “foreclosure machine.” He said he was committed to loan modifications intended to stop foreclosures.

A spokeswoman for the Treasury Department had no immediate comment on the settlement.

CIT, which did not admit liability, said in a filing on Tuesday that it cooperated with the government after receiving subpoenas from HUD’s Inspector General in 2015.

Sandra Jolley, a consumer advocate and whistleblower in the case, will receive $1.6 million for her role in the probe.

Her attorney, David Scher, said the settlement was the tip of the iceberg when it came to wrongdoing by reverse mortgage companies. He said he hoped the investigation would continue.

New York attorney general Eric Schneiderman has probed Financial Freedom over complaints it deliberately targeted seniors with dementia and other memory-loss, Reuters reported in January, citing a person familiar with the matter.

Schneiderman’s office did not respond to requests for comment on the status of the probe.

CIT disclosed it received a subpoena from Schneiderman in the second quarter of 2017, and said it was preparing to respond. A CIT spokeswoman declined to comment on any broader probes of wrongdoing by reverse mortgage companies.

(Reporting by Karen Freifeld, additional reporting by Eric Walsh; Editing by Eric Beech and Andrew Hay)

Article source: http://www.reuters.com/article/us-financial-freedom-settlement-idUSKCN18C2FL