Tag Archives: Foreclosure

Nevada Notaries Charged With Fraudulent Foreclosure Documents

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Just in case you may have forgotten about the robo-signing scandal that first came to light in Florida, I thought that I might jar your memory. Florida happens to be a judicial foreclosure state while Nevada is non-judicial. In Florida’s case, the fraudulent document signers work ended up in court. But, the foreclosures in Nevada were for the most part settled at public auction on the court house steps. These never had to face a judge.

Now, it has come to light that Nevada is not immune for fraudulent signing. At least three notaries have now been charged with notarizing documents without actually witnessing the signing.

The three notaries had all worked for LPS, (Lender Processing Service) to handle paperwork for the banks. This is the same company at the center of the problem in Florida. Apparently, they had such a workload such that they could never witness every document within the time allotted.

The problems here, were addressed in AB 284. Now the foreclosing entity must certify that their documents are in order. The end result is that foreclosures will now take longer to complete the process.

Read More: http://www.cbsnews.com/8301-505245_162-57337111/3-nevada-notaries-named-in-foreclosure-fraud-case/

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New Short Sale Rules From Freddie Mac

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Effective Jan, 1, 2012 everyone involved with Freddie Mac short sales will be required to sign an affidavit and be held liable for any misrepresentations they may have caused. This is purportedly to ensure that the transaction is at arms length.

In August, the government-sponsored enterprise alerted real estate agents to the rise in shady short sale deals. The main concern is flopping. There is a growing trend of real estate agents on the buy-side of the deal failing to disclose other bids on the property, rigging the sale at a lower price.

This was based on the theory that if a buyer flipped the property and made a profit, the deal must have defrauded the bank. If we extend this concept then every business that buys a product or service and re-sells it at a higher price would be committing fraud. We know that any merchant that doesn’t make a profit soon goes out of business.

We must realize that this absurd notion comes from the government where little makes any sense. But take care because they will look for any excuse to make an example of you.

This is from the same Fannie and Freddie that has already cost the taxpayers $169 billion and have paid huge bonuses to their executives for losing money.

How big are the paychecks going to top Fannie and Freddie executives? Big. Really, really big. Since the agencies went into conservatorship, Fannie and Freddie’s top six executives have received $35 million in compensation, including millions in bonuses, even as borrowers struggled to keep their homes and got no meaningful relief.

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Would I buy a Belvedere Condominium?

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My posts on this blog about the Belvedere condominium project and developer Bijan Madjlessi generated more interest than any other so far. Readers have even contacted me asking what I thought about buying units in the project.

I must begin with this disclaimer because except for what I have read or learned in newspaper or other reports my direct knowledge of the Belvedere is almost nonexistent. I’ve never been in the Belvedere nor have I ever met any of the players that I am aware of. As I said the extent of my knowledge has come only from news articles or from comments on this or other blogs. Therefore I believe I am not qualified to recommend in any way either positive or negative about the benefits of purchasing a Belvedere condominium unit.

My concern with the Belvedere project is that I am not convinced that the legal difficulties are yet over. There are some other reasons that I do not like condominiums but I will save that for another time.

As we have learned from the Reno Gazette Journal, the Belvedere condominiums were purchased at a Washoe County tax foreclosure sale by David Lonich, the attorney for Madjlessi. It would appear to me that Lonich is nothing but the straw buyer for Madjlessi.

We learned that Madjlessi failed to pay his mortgages, failed to pay his vendors, and failed to pay property taxes, thus resulting in tax foreclosure.

We learned that Madjlessi had been arrested in California for insurance fraud. Then as information began to grow we learned that Madjlessi was involved in the failure of Sonoma Valley bank. We further learned that Madjlessi had been involved in at least three other failed developments in California in the Sonoma and Petaluma area.

I would be concerned that the Belvedere is still a target rich environment for attorneys and law suits. I can only imagine that some hungry attorney will see an opportunity in coming to aid of the vendors that lost so much by their supplying goods and services to the project.

I just can’t imagine that they will be happy seeing Madjlessi win at their expense.

So, no. I would not personally be comfortable buying a condominium in the Belvedere project.

I would welcome comments from anyone having a different opinion.

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State of Washington Sues B of A over Foreclosures

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The Washington state Attorney General filed suit against Bank of America over its foreclosure practices. Bank of America denies the charges.

Attorney General Rob McKenna alleged that a unit of Bank of America Corp. that handles foreclosures on behalf of the bank had improperly executed thousands of foreclosures over the last three years. The suit alleges that ReconTrust Co., a wholly owned BofA subsidiary that serves as a trustee in foreclosure sales, didn’t act in good faith when foreclosing on homeowners.

Washington is one of 27 so-called “non-judicial” states where, rather than going before a judge to foreclose, banks hire a trustee to carry out an administrative process that varies slightly from state to state. Trustees notify homeowners that they are in default and, if the borrower doesn’t become current or work out a modification, the trustee eventually carries out the foreclosure.

The lawsuit alleges that ReconTrust “committed unfair and deceptive acts” by failing to act as a neutral party between borrowers and lenders. ReconTrust “has failed to comply” with state foreclosure law “in each and every foreclosure it has conducted since at least June 12, 2008,” said the lawsuit.

The Washington lawsuit has listed a number of violations of Washington law and is asking for a court injunction against the foreclosures and fines for every violation.
Read more.

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The Continuing Belvedere Saga

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I have received a lot of visitors from the Reno Realty Blog because of the discussion on the Belvedere.

One thing I noticed is that the link to the RGJ article no longer work. After 30 days the RGJ places its articles in its archives. You can still find the article if you choose the correct term, and are willing to pay to read it.

I will attempt to address some of the comments at RRB:

Jo Amick says:
June 13, 2011 at 6:30 PM

I also think “Tax implications and vacancy rates alone could very well put your return on investment at 4 years + ” to agree with “Nomad”. Guess I got beat to the punch!

I believe that all “tax implications” were wiped out at the Washoe County tax sale.

Renter says:
August 16, 2011 at 1:58 PM
…
Back to the discussion on being an investment opportunities, what seems to kill the deal is the “mechanic’s liens number in the hundreds”. I believe there are over $80K of liens on each apartment there.
…

As I understand the law a tax foreclosure takes priority over all other debts and obligations except IRS liens. Therefore, the mechanics liens were also wiped out.

GreenNV says:
August 16, 2011 at 7:52 PM

OK, this is my understanding. In a foreclosure situation, all the junior lien holders have the right to bid to try to maintain their interests in the property. If they don’t and the Trutees Sale is completed, their claim on the property it expunged.

So for the Belvedere, short sale properties still have the mechanic’s liens in place and should be avoided. Properties that have gone TD should be free and clear of the mechanic’s liens. I think buying a unit from the bank is pretty safe legally (given the other risks), but there are NOT any of the foreclosed units on the market right now. That smells fishy to me, so there may be more to the story.

This would be correct if it were a Trustee foreclosure sale or short sale. The Belvedere properties were NOT short sales nor were they Trustee sales. These were tax deed sales, sold by Washoe County.

By using the tax foreclosure sale route the property no longer has any bank debt, mechanics liens, HOA liens.

The bank did not buy the properties. According to the RGJ, they were all bought by Madjlessi’s lawyer. Therefore, the bank is NOT the seller.

I welcome and invite your comments and especially your corrections to anything where I may have been in error.

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Bank of America Will Accept Back-up Offer in Short Sale

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One of the problems with short sales is the amount of time they take to complete, often as much as 4 to 6 months, or more. The typical retail buyer is not willing nor able to wait around that long and the buyer then walks away from the transaction.

Short sales approval typically take 60-90 days \ after the buyer and seller have signed their contract and all the corresponding paperwork has been submitted to the bank. Closing then takes another 30 days or so. Most buyers don’t want to stick around for 120 days with the uncertainty that they don’t know if the bank will even agree to the short sale or if the terms of the agreement will be acceptable to the seller.The biggest challenge with short sales is to keep buyers interested in the property long enough to see the entire transaction through to the end.

Bank of America recently notified real estate agents that they can now substitute a new buyer without having to initiate a new short sale. This is in the case of the original buyer walking away from the deal. For home buyers and sellers reading this who may not be involved every day in dealing with short sales, this really big change in the real estate market.

This development should help to speed up short sales, if for no other reason that they no longer need to start over.

Read the B of A document: http://sdshortsaleexperts.com/virtualoffice_files//bank-of-america-back-up-offer.pdf

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Foreclosure Overturned by Oregon Judge

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An Oregon judge overturned a foreclosure  and subsequent eviction. This case, like many nationwide, also involves MERS, the Mortgage Electronic Registration System.

MERS was created, in part to avoid the expense of paying recording fees to the local county recorder.

A Wells Fargo & Co. unit foreclosed on Flynn after she fell behind in her payments. Wells Fargo sold the mortgage to U.S. Bank, the second lienholder, in December 2010, Cutler said.

I don’t understand how Wells Fargo could have sold the mortgage.  This may due either to Oregon law or a reporter getting the story wrong.

U.S. Bank tried to evict Flynn from her Vernonia home during a May 24 court hearing. But on June 23, Columbia County Circuit Judge Jenefer Grant ruled against the bank and awarded legal costs to Flynn.

Grant found that the original lender, Eagle Home Mortgage, held beneficial interest in the property. But while Eagle Home eventually sold the mortgage to other parties, the exchanges were never recorded, or assigned, in the county’s recorder office.

“I am concluding the recording never occurred,” she wrote in a two-page ruling. “MERS does not become the beneficiary, irrespective of what is stated in the deed of trust.”

Oregon law requires any transfer of ownership of debt to be recorded at the county recorder.  The banks, by using MERS decided that it was not necessary to comply.

Read more on MERS and Oregon Foreclosure law.

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Home for Rent; Foreclosures Considered

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A month ago I posted: “Can You Rent a Home After Foreclosure?”  This post received a significant amount of viewers.

I want to add that in this current rental marketplace, especially here in Reno, any landlord who would not consider foreclosures, would close himself off from a large portion of the possible available tenants.

Anyhow, this is a cheap way of saying that we have a Virginia Foothills home for rent and we will consider foreclosures.

Leave a message if interested.

 

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Belvedere Developer and the Glassman

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Bijan Madjlessi is the real estate developer that was arrested because of dual insurance claims because of a fire at the Belvedere towers condo project.

It appears that he had a history of using and abusing people.  It seems that not paying his contractors and vendors was his standard practice.

One of these vendors was Chad Empey of Petaluma, CA and it appears that he is fighting back.  He has posted videos that explain in detail how Madjlessi ran his operation.  This video is only one of many describing Madjlessi, his operation, and the corrupt bankers that enabled this fraud.

http://youtu.be/zhMpSmAS5tA

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A New York Appeals Court Rules Against MERS

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Another foreclosure proceeding involving MERS was thrown out by a New York appeals court.

In part, the court ruled:

In sum, because MERS was never the lawful holder or assignee of the notes described and identified in the consolidation agreement, the corrected assignment of mortgage is a nullity, and MERS was without authority to assign the power to foreclose to the plaintiff. Consequently, the plaintiff failed to show that it had standing to foreclose.

The ruling does not bode well for MERS, but is clearly not the end, either.

Click here to read the court’s ruling on MERS.

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