Archives For November 30, 1999

A.G. Denounces Predatory Mortgage Loans

Stephanie Abbott —  September 12, 2019 — Leave a comment

An amicus brief has been filed today in support of a lawsuit brought by the City of Oakland against Wells Fargo. The City alleges that the bank engaged in predatory mortgage lending targeting minority communities.

The brief urged the court to affirm the district court’s denial of Wells Fargo’s motion to dismiss the lawsuit and highlighted the harmful effects of discriminatory lending practices in California.

In 2015, the City of Oakland filed a lawsuit alleging that, in violation of the federal Fair Housing Act and the California Fair Employment and Housing Act, Wells Fargo harmed the city through a pattern of illegal and discriminatory mortgage lending, heavily impacting minority community members. In particular, Oakland alleged that Wells Fargo steered minority borrowers there to loans with higher costs and risks, and refused to allow those borrowers to refinance, or would only refinance on less favorable terms compared to other similar loans, when they were no longer able to meet the terms of their original agreements. According to the first amended complaint, African-American and Latino borrowers were more than twice as likely to receive a high-cost or high-risk loan from Wells Fargo than similarly situated white customers. As a result, the city alleged, among other things, that these discriminatory practices suppressed property values in minority communities in Oakland, reduced property tax revenues, and increased the costs of providing municipal services. Wells Fargo’s motion to dismiss the case was largely denied and the bank is currently seeking review before the U.S. Court of Appeals for the Ninth Circuit.

California Attorney General Xavier Becerra made the announcement.

“Equal access to housing starts with equal and fair access to our financial institutions,” said Attorney General Becerra. “For many African-Americans and Latinos, the hardships of the mortgage crisis haven’t stopped. Our fight for economic justice continues and I’m proud to stand with the City of Oakland in this effort to combat predatory lending in our state.”

“Wells Fargo’s racially discriminatory mortgage lending practices against African-Americans and Hispanics have devastated individuals, families, and communities in Oakland, throughout California, and across the country where Wells Fargo operates, dramatically increasing foreclosures and decreasing the Black and Latino middle class,” said Oakland City Attorney Barbara J. Parker. “Evidence shows that Wells Fargo systematically provided more expensive and higher risk loans to African-American and Hispanic borrowers in Oakland and other cities who qualified for the more favorable loans that the bank offered to white borrowers. We applaud Attorney General Becerra for standing with Oakland to hold Wells Fargo accountable and stop these racially discriminatory practices.”

Attorney General Becerra is committed to tackling housing inequity in the state and throughout the country. In March and October of 2018, the California Department of Justice submitted Attorney General Becerra is committed to tackling housing inequity in the state and throughout the country. In March and October of 2018, the California Department of Justice submitted comments opposing changes proposed by the Trump Administration that would revoke key tools used to overcome entrenched patterns of residential segregation and foster inclusive communities. In July of 2019, Attorney General Becerra urged the U.S. Department of Housing and Urban Development to withdraw a proposed rule on housing assistance eligibility, which would risk eviction for tens of thousands of Californians. Attorney General Becerra also joined a coalition of attorneys general seeking to protect federal rules allowing equal and consistent access to shelters for transgender and gender nonconforming individuals.

A copy of the brief is available here.

 

In Mortgage Fraud , ,
 permalink

Man Sentenced for Transferring Deed to Himself After Forging Notary’s Signature

Stephanie Abbott —  September 11, 2019 — Leave a comment

Jordan Horsford, 29, East New York, Brooklyn was sentenced today to five months in jail and five years’ probation for stealing and attempting to sell the home of his 85-year-old neighbor, a diabetic man for whom the defendant was a part-time caretaker.

According to the investigation, in August 2016 the defendant, who was known to do odd jobs in the neighborhood, began helping the victim as needed, including carrying his wheelchair up steps and helping him get in and out of vehicles; he was paid for each task by the victim’s family.

In April 2017, the victim’s family began paying the defendant $400 a week to accept Meals on Wheels deliveries and set them out for the victim, to make sure he took his medicine and to check in on him at night.

Between June 19, 2017 and November 1, 2017, the defendant convinced the victim to sign away the deed to his home on Barbey Street, East New York, Brooklyn. The defendant told the victim he risked losing his home if he did not sign a document, and had the document notarized by a notary. The defendant then realized he needed another document notarized, but the notary refused so the defendant cut and pasted her original signature. He then recorded the deed, which had been signed over to him.

Finally, the defendant attempted to sell the house almost immediately after securing the deed, but a title company suspected foul play and refused to insure the home. The would-be purchaser then reached out to the 85-year-old victim’s family. At around the same time, the victim’s daughter, while going through her father’s mail, found a letter from the Department of Finance notifying them about documents filed relating to the property. The daughter pursued the matter with the DOF and the case was ultimately referred to the Brooklyn District Attorney’s Office for further investigation and prosecution.

Brooklyn District Attorney Eric Gonzalez made the announcement.

District Attorney Gonzalez said, “With today’s sentencing this defendant is being held accountable for preying on his elderly neighbor and abusing his trust. I urge seniors and their family members to protect their homes, especially as property values continue to rise in Brooklyn, by taking care not to sign any documents pertaining to their properties without the advice of a reputable attorney. I remain committed to prosecuting deed thefts like this and assisting all homeowners whenever possible.”

The defendant pleaded guilty to third-degree grand larceny in June and consented to an order nullifying the fraudulent recorded deed. https://www.mortgagefraudblog.com/?s=Jordan+Horsford

The case was prosecuted by Senior Assistant District Attorney Karen Turner of the District Attorney’s Frauds Bureau, under the supervision of Assistant District Attorney Gavin Miles, Counsel to the Frauds Bureau, and the overall supervision of Assistant District Attorney Patricia McNeill, Deputy Chief of the District Attorney’s Investigations Division.

 

In Mortgage Fraud , ,
 permalink

Five Defendants Indicted in Short Sale Fraud Scheme

Stephanie Abbott —  September 10, 2019 — Leave a comment

Iskyo Aronov (also known as “Isaac Aronov”), 32, Miami, Florida, Michael Konstantinovskiy (also known as “Michael Kay”), 33, Rego Park, Queens, Tomer Dafna, 48, Great Neck, New York, Avraham Tarshish, 40, Queens Village, New York and Michael Herskowitz, 40, Brooklyn, New York have been indicted for conspiracy to commit wire fraud and bank fraud, and related wire fraud counts, in connection with a scheme to defraud mortgage lenders, including the Federal National Mortgage Association (“Fannie Mae”), the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and borrowers.

According to the indictment, between December 2012 and January 2019, the defendants conspired to defraud mortgage lenders, misleading them into approving short sale transactions at fraudulently depressed prices.  In a short sale, with the approval of the mortgage lender or servicer, a mortgage loan borrower sells his or her property for less than the outstanding balance of the mortgage loan.  The proceeds from the short sale, less approved closing costs, are applied to the outstanding mortgage loan balance owed to the lender, who typically agrees to forgive the borrower’s remaining mortgage loan balance.  Here, the defendants fraudulently manipulated the short sale process by transferring properties for prices well above the short sale prices, and failing to disclose this to the mortgage lenders and servicers.  The defendants also took steps to preclude other prospective purchasers from making higher offers for properties by failing to market properties as required by the lenders, and by filing fraudulent liens on properties.

As a further part of the scheme, the defendants provided the mortgage lenders and servicers with false and misleading information in transaction documents and failed to disclose either payments made to the borrower and others related to short sale or contemporaneous agreements to transfer the properties at inflated prices.  Many of the affected mortgage loans were insured by the Federal Housing Administration, or owned or guaranteed by Fannie Mae or Freddie Mac.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, Robert Manchak, Special Agent-in-Charge, Federal Housing Finance Agency, Office of Inspector General, Northeast Region (FHFA-OIG), and Christina Scaringi, Special Agent-in-Charge, U.S. Department of Housing and Urban Development, Office of the Inspector General, Northeast Region (HUD-OIG), announced the charges.

“As alleged, the defendants defrauded mortgage loan holders out of millions of dollars, with taxpayers saddled with much of the loss,” stated United States Attorney Donoghue.  “This Office will continue working with our law enforcement partners to vigorously prosecute those who commit mortgage fraud and enrich themselves at the expense of the financial institutions and government programs that insure or guarantee the loans.”  Mr. Donoghue thanked the United States Department of Homeland Security, Homeland Security Investigations, New York Field Office (HSI), the HSI El Dorado Financial Crimes Task Force and the Internal Revenue Service, Criminal Investigation, New York, for their assistance in the ongoing investigation.

“Together with our partners in law enforcement, we have disrupted a scheme to defraud Fannie Mae and Freddie Mac. As demonstrated by this indictment, FHFA-OIG will investigate and hold accountable those who seek to victimize the government-sponsored entities supervised and regulated by FHFA,” stated FHFA-OIG Special Agent-in-Charge Manchak.

“These five individuals allegedly engaged in a scheme of wholesale deception when they provided false, misleading, and incomplete information to lending institutions, borrowers, and the Federal Housing Administration (FHA) causing millions of dollars in damages to the FHA, which typically results in higher premiums being charged to future first-time homeowners,” stated HUD-OIG Special Agent-in-Charge Scaringi.  “What makes their alleged crimes even more egregious was their artificial devaluation of properties that, when resold or ‘flipped,’ resulted in large profits.  Many of these homes were located in economically challenged areas of New York where affordable housing is at a premium.”

Konstantinovskiy, Dafna, Tarshish and Herskowitz were arrested this morning in New York, and will be arraigned this afternoon before United States Magistrate Judge Lois Bloom.  Aronov was arrested in Florida, and will appear this afternoon for a removal hearing at the federal courthouse in Miami.

The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants each face a maximum of 30 years’ imprisonment and a $1 million fine.

The case is being handled by the Office’s Business and Securities Fraud Section.  Assistant United States Attorney Shannon C. Jones is in charge of the prosecution.  Assistant United States Attorney Tanisha Payne of the Office’s Civil Division is handling forfeiture matters.

In Mortgage Fraud , ,
 permalink

Man Admits to Fraudulent Short Sale Buy-Back Scheme

Stephanie Abbott —  September 4, 2019 — Leave a comment

George Bussanich Sr., 60, Park Ridge, New Jersey, today admitted his role in a scheme with his son to use straw buyers and short sales on properties to defraud mortgage lenders out of hundreds of thousands of dollars and to avoid paying taxes on the proceeds of the scheme.

Bussanich Sr. pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to a superseding information charging him with one count of bank fraud conspiracy and one count of tax evasion. His son, George Bussanich Jr., 39, Upper Saddle River, New Jersey, pleaded guilty to tax evasion before Judge Cecchi in October 2017 and is scheduled to be sentenced September. 25, 2019.

According to documents filed in this case and statements made in court:

Between 2009 and 2012, Bussanich Sr. and Bussanich Jr. conspired to defraud mortgage lenders through the sham short sales of two properties located on Jefferson Avenue, Emerson, New Jersey, and Lillian Street, Park Ridge, New Jersey.

Bussanich Sr. controlled various purported medical clinics and surgical centers in New Jersey. He recruited his business partner and an employee from a sleep clinic in Cliffside Park, New Jersey, to pose as legitimate, unrelated buyers of the properties. In order to conceal his involvement, Bussanich Sr. used a business entity he controlled to fund each short sale transaction and the subsequent repurchase of those properties. Bussanich Jr., the owner of record of both properties, negotiated the short sales with the lenders using materially false information that misrepresented the circumstances of the short sales, the relationships of the parties, and the source of funding for the transactions.

Approximately two years after the fraudulent short sales, Bussanich Sr. bought the properties back from the straw purchasers using money that he owed his business partner from an earlier venture.

Bussanich Sr. also failed to disclose on his tax returns hundreds of thousands of dollars in income that he received from his purported medical clinics and surgical centers. He used those funds to purchase high-end luxury vehicles worth a total of over $300,000, including two Land Rover sport utility vehicles and a Ferrari Spyder. He also used those funds to purchase official bank checks to fund the fraudulent short sales.

The bank fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a maximum potential fine of $1 million. The tax evasion charge carries a maximum potential penalty of five years in prison and a maximum potential $250,000 fine. Sentencing is scheduled for Jan. 23, 2020.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Ari B. Fontecchio of the Office’s Economic Crimes Unit, and Nicholas P. Grippo, Attorney in Charge of the Trenton Office.

In Mortgage Fraud , ,
 permalink

Man Sentenced for Mortgage Fraud Scheme

Stephanie Abbott —  August 22, 2019 — Leave a comment

Erik Hermann Green, 37, Huntington Beach, formerly of Roseville, California was sentenced to 27 months in prison and ordered to pay $118,421 in restitution for his participation in a mortgage fraud scheme.

According to evidence presented at a seven–day trial in March, Green was part of a large‑scale scheme to defraud the New Century Mortgage Corporation by submitting false documentation about employment, income and assets, including fraudulent loan applications and other altered bank documents. In October 2006, when Green submitted his fraudulent loan applications to obtain a loan for $820,000, he was a licensed real estate sales person and managed approximately 15 loan officers. As part of the scheme, Green received a check for $100,000 that was funneled through a shell company at the close of escrow. Green used the funds for personal expenses. The jury found him guilty of three counts of wire fraud.

U.S. Attorney McGregor W. Scott made the announcement.

“The defendant lied to mortgage lenders to obtain a substantial amount of money and a new home for himself, while causing hundreds of thousands of dollars in losses to lenders,” said Kareem Carter, Special Agent in Charge, IRS Criminal Investigation. “This case highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”

This case was the product of an investigation by the IRS Criminal Investigation and the Alameda County District Attorney’s Office. Assistant U.S. Attorneys Michael D. Anderson and Miriam R. Hinman prosecuted the case.

 

In Mortgage Fraud , ,
 permalink

Loan Servicer Ceases Foreclosures Found to be Wrongful

Stephanie Abbott —  August 6, 2019 — 7 Comments

Ocwen Financial Corporation is a national provider of loan servicing for lenders. It is headquartered in Florida and has offices in several states. In its Consent Agreement with Maine’s Bureau of Consumer Credit Protection and Attorney General, Ocwen admitted that after July 2014 it pursued foreclosures against Maine homeowners based on paperwork which the State found to be legally defective.

Specifically, Ocwen used “powers of attorney” granted by corporate originators of the mortgages, but those corporate originators of the mortgages had been legally dissolved – had ceased to exist – no later than March 2012. The State alleges that the powers of attorney terminated when the granting corporations dissolved.

Under the Consent Agreement, the State found that Ocwen’s use of the powers of attorneys from legally nonexistent entities violated a statute prohibiting “false, deceptive or misleading representation or means in the collection of any debt.”

Ocwen’s illegal filings continued into January of 2019, even after Ocwen’s lawyers had assured State regulators in November 2018 that the practice would stop. The company termed the additional filings as “inadvertent.”

Ocwen Financial Corporation will refund or credit 24 Maine residents more than $50,000 in attorney’s fees they were assessed when their homes were foreclosed upon, and the company will pay $24,000 in civil penalties and $10,000 in investigative costs to the State of Maine, as part of a Consent Agreement signed last week.

“Maine’s Supreme Court has made clear that lenders must establish that they have the legal right to pursue foreclosures,” said Will Lund, Superintendent of the Maine Bureau of Consumer Credit Protection. “Those requirements were not followed in these cases.”

Attorney General Aaron M. Frey, whose office assisted state mortgage regulators in negotiating and resolving the matter, stated, “The Consent Agreement puts Ocwen – and other national mortgage lenders and servicers – on notice that they must follow the legal standards here in Maine if they pursue actions on defaulted mortgages.”

The Consent Agreement may have ramifications beyond Ocwen, noted Superintendent Lund, since other lenders may be filing foreclosures based on similar powers of attorney issued by the same nonexistent corporate loan originators used by Ocwen.

 

In Mortgage Fraud , ,
 permalink

Action Taken Against Fraudulent Mortgage Lender

Stephanie Abbott —  August 1, 2019 — Leave a comment

Vision Property Management, LLC; the company’s CEO, Alex Szkaradek; and a number of other companies affiliated with Vision have been charged today for operating an illegal, deceptive, and unlicensed mortgage lending business in New York since at least 2011. By offering disguised, predatory subprime home loans and illegal finance-lease hybrid agreements, Vision and the other defendants took part in fraudulent activities that repeatedly targeted and took advantage of financially vulnerable New Yorkers.

The complaint alleges that Vision specializes in buying severely distressed properties and then markets those properties — at a substantial markup to consumers — without making any necessary repairs or renovations, and without fully disclosing to consumers the many conditions that exist and repairs that must be made for safe habitation. Vision targets low-income consumers eager to share in the “American dream” of homeownership, claiming that its “unique” business model provides this path to homeownership. But, in reality, Vision’s illegal business model has generated significant profits by skirting consumer protections and financial regulations and trapping vulnerable consumers with high cost mortgages for uninhabitable homes.

Vision’s deceptive tactics have left many of its consumers in dilapidated homes with unhealthy and hazardous conditions, while simultaneously requiring them to pay subprime, or high-cost, interest rates — in the range of 10% to 25% — on top of paying for extensive repairs and renovations just to make their homes habitable.

Vision has engaged in approximately 150 such transactions in New York since 2011 without possessing the legally required licenses to engage in mortgage lending. Furthermore, Vision entered into contracts with financially strained consumers that illegally required them to shoulder the burden of ensuring their properties were habitable. Often, consumers were deceived and trapped into paying for the treatment and repair of dangerous and unhealthy conditions in their new homes, including infestations, faulty electrical wiring, missing heaters and septic systems, mold, and asbestos, as well as severely damaged and rotted out, floors, walls, and roofs.

Vision has violated laws applicable to both mortgage lending and the leasing of residential properties, as well as numerous state and federal consumer protection laws.

Attorney General Letitia James and New York Superintendent of Financial Services Linda A. Lacewell made the announcement.

“For nearly a decade, Vision put profits above people — fraudulently targeting, preying upon, and exploiting aspiring homeowners, including people with disabilities, the elderly, and those living on fixed income,” said Attorney General Letitia James. “These deceptive and abusive practices have trapped New Yorkers in mold-infested, dilapidated homes, and wrongfully placed the onus on consumers to pay the price. This behavior is unacceptable, which is why my office is aggressively prosecuting Vision and will do the same against any company or individual that tries to defraud New Yorkers.”

“As alleged in the complaint, Vision swindled vulnerable New Yorkers who wanted nothing more than the American dream of homeownership but instead got distressed properties with unsafe, squalid conditions and high-interest, predatory loans,” said Superintendent Linda A. Lacewell. “We took this action to protect New York consumers by putting an end to these illegal, predatory and unconscionable business practices and holding Vision and its CEO accountable under New York State law and applicable federal laws. I am proud of the exemplary work of the DFS colleagues who investigated Vision’s activities for over two years, analyzed thousands of documents, and who worked to protect New Yorkers and bring this company to justice.”

In the suit — being filed in the Southern District of New York — Attorney General James and Superintendent Lacewell are seeking to end Vision’s ongoing illegal activity in New York, secure restitution and damages for all consumers injured by these practices, and obtain statutory penalties.

The matter is being handled by Assistant Attorney General Noah Popp of the Consumer Frauds and Protection Bureau, under the supervision of Jane M. Azia, Chief of the Consumer Frauds and Protection Bureau, and Chief Deputy Attorney General for Social Justice Meghan Faux. The Bureau of Consumer Frauds and Protection is overseen by Chief Deputy Attorney General for Economic Justice Christopher D’Angelo.

Additional attorneys at the Department of Financial Services involved with this litigation include Peter C. Dean of the Real Estate Finance Division and Cynthia M. Reed, Supervising Attorney in the Consumer Protection and Financial Enforcement Division.

In Mortgage Fraud ,
 permalink

Probe into Bank Fraud Adds Two New Defendants

Stephanie Abbott —  July 29, 2019 — Leave a comment

Jason Schiff, 40, Lincolnwood, Illinois is charged with three counts of bank fraud, according to a superseding indictment returned July 24, 2019.  The superseding indictment also charges Jason Schiff’s brother, Yale Schiff, 44, Riverwoods, Illinois with 12 counts of bank fraud and two counts of aggravated identity theft.

According to the charges against the Schiffs, Yale Schiff made false statements in loan applications to obtain millions of dollars in mortgage loans secured by a variety of properties.  The charges allege that Yale Schiff filed with the Cook County Recorder of Deeds fraudulent letters from financial institutions claiming that loans on the properties were paid in full and that the mortgages were released, when, in fact, the loans were not paid in full and the mortgages had not been released.  Yale Schiff then kept the financing paid by the banks, as well as proceeds from the eventual sales of the properties, without paying the mortgages, the indictment states.  The fraud allegedly committed by Jason Schiff arose out of bank loans for vehicles and a loan secured by real estate purchased from Yale Schiff.

A separate indictment returned July 17, 2019, charges Yale Schiff’s business associate, David Izsak, 44, Chicago, Illinois with eleven counts of bank fraud and one count of aggravated identity theft.  During the investigation, federal authorities seized Izsak’s 57-foot Carver 570 Voyager yacht known as the “Flying Lady.”  The indictment seeks forfeiture of the yacht, as well as a personal money judgment against Izsak of approximately $4 million.  Izsak pleaded not guilty at his arraignment earlier this month.

The charges against Izsak accuse him of fraudulently obtaining loans secured by real estate and vehicles.  Izsak allegedly submitted or caused to be submitted to the Cook County Recorder of Deeds fake letters purporting to be from the lender, purporting to congratulate Izsak for paying his loan in full and releasing the lien.  In reality, the letters were not from the lender, the loans were not paid in full, and the liens were not released, the indictment states.

Izsak and Yale Schiff are each accused of fraudulently obtaining loans by using names, Social Security numbers and dates of birth that did not belong to them.  Izsak also used a stolen identity to obtain a credit card, while Yale Schiff used fake and stolen identities to fraudulently obtain a charge card at Nordstrom department store and loans for a Jeep Grand Cherokee and a Lexus RX350, the indictment states.

Yale Schiff was initially charged in the case last month.  The Schiffs pleaded not guilty today.

The indictments were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the FBI; and Craig Goldberg, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The government is represented by Assistant U.S. Attorney Sheri H. Mecklenburg.

The public is reminded that an indictment is not evidence of guilt.  The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.  Each bank fraud count is punishable by a maximum sentence of 30 years in prison, while each count of aggravated identity theft carries a mandatory sentence of two years.  If convicted, the Court must impose reasonable sentences under federal statutes and the advisory U.S. Sentencing Guidelines.

 

In Mortgage Fraud , ,
 permalink

Man Sentenced for Multimillion Dollar Mortgage & Foreclosure Rescue Fraud Scheme

Stephanie Abbott —  July 26, 2019 — Leave a comment

Zalathiel Aguila, 46, Vallejo, California has been sentenced to four years in prison for conspiracy to commit wire fraud affecting a financial institution and bank fraud.

According to court documents, between September 2004 and February 2008, Aguila and co-conspirators Sergio Roman Barrientos and Omar Anabo operated Capital Access LLC, in Vallejo, a company that preyed on homeowners nearing foreclosure. The defendants convinced homeowners to sign over the title to their homes to Capital Access and then spent any equity those homeowners still had, which was then used for operational expenses of the scheme and personal expenses of Aguila and his co-conspirators.

The defendants also used straw buyers to obtain home loans under false pretenses and defraud federally insured financial institutions out of millions of dollars. Vulnerable homeowners across California lost their homes and savings as a result of the scheme, and lenders lost an estimated $10.47 million from the fraud.

Aguila remains out of custody pending his surrendering for service of his sentence on October 25, 2019. Barrientos was sentenced on November 2, 2018, to 14 years in prison for his role in the scheme, and Anabo (charged elsewhere) is scheduled to be sentenced on August 16, 2019.

U.S. Attorney McGregor W. Scott made the announcement.

This case was the product of an investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant U.S. Attorney Matthew M. Yelovich prosecuted the case.

In Mortgage Fraud , ,
 permalink

A.G. Objects To Mortgage Servicer’s Unlawful Attempt To Strip Away Rights Of Homeowners

Stephanie Abbott —  July 23, 2019 — Leave a comment

An action has been taken against Ditech Holding Corporation (Ditech) in the United States Bankruptcy Court for the Southern District of New York, opposing the mortgage servicer’s attempted end-run around statutory protections for homeowners.

Ditech currently has more than 880 active foreclosure actions pending across New York State. Homeowners organized the Consumer Creditors Committee to ensure that the courts do not permit the company to sweep their rights under the rug. Homeowners are demanding that their claims and defenses, which include significant money damages, not be extinguished in Bankruptcy Court.

Attorney General Letitia James made the announcement.

In addition to filing this motion, the Office of the New York State Attorney General currently has an open investigation into Reverse Mortgage Solutions (RMS), a reverse mortgage servicer that is owned by Ditech.

“Bankruptcy Court should never be used as a tool to unjustly oust New Yorkers from their homes,” said Attorney General Letitia James. “Ditech’s action is an illegal attempt to strip hundreds of homeowners of their legitimate claims and eviscerate New York’s carefully-created foreclosure process. Housing is a right, and we will continue to use every legal tool at our disposal to stand up for homeowners and to protect their rights.”

In addition to filing this motion, the Office of the New York State Attorney General currently has an open investigation into Reverse Mortgage Solutions (RMS), a reverse mortgage servicer that is owned by Ditech.

This past March, Attorney General James took a similar action when a building owner in Manhattan attempted to flout rent regulation laws and displace tenants.

Attorney General James — in support of the Consumer Creditors’ Committee — is filing the objection to ensure that vulnerable homeowners, who were victims of predatory lending and mortgage servicing abuses, including seniors with reverse mortgages, can assert their rights under the protections of New York’s robust judicial foreclosure process.

The objection is being handled by Assistant Attorneys General Elena González, Elizabeth M. Lynch, and Sarah Trombley of the Bureau of Consumer Frauds and Protection, under the supervision of Bureau Chief Jane M. Azia, as well as Enid Nagler Stuart, Special Bankruptcy Counsel for the Litigation Bureau. The Bureau of Consumer Frauds and Protection is overseen by Chief Deputy Attorney General for Economic Justice Christopher D’Angelo, and the Litigation Bureau is overseen by Chief Deputy Attorney for State Counsel Orelia Merchant.

 

In Mortgage Fraud ,
 permalink