Nearly half of the lawyers working in Florida’s largest “foreclosure firms” have been practicing law for less than three years, making the entire foreclosure process – already highly suspect thanks to the robo-signing fiasco back in October – even more susceptible to lawsuits and counter-claims from borrowers who do not believe that their foreclosures were justified[1]. According to Florida bar records gathered by the Palm Beach Post, not only are a large portion of these lawyers lacking in experience, but they have also been laid off since the foreclosure debacle began and many are facing Florida Bar investigations that “could end their careers.”

In the probe initiated by all 50 attorneys general in the country, testimony has come to light indicating that former employees of foreclosure firm David J. Stern believed that the firm itself was involved in deception at many levels, including “hiding problem files from federal auditors, forging signatures and making up documents when necessary.” However, St. Petersburg foreclosure defense attorney Matt Weidner believes that many of the younger lawyers may have been unaware they may have been committing an offense when they were following their employer’s lead. “I know the younger attorneys had no idea what they were doing,” he said.

Even if this is the case, do you think that less than three years’ experience is an adequate excuse for “not knowing” that forgery and fraud are wrong?

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A real estate company in Cheyenne, Wyoming is reporting that its property listings have been “hacked” by overseas con artists who are claiming to be landlords for those properties[1]. Assist2Sell has reported the issue, and one employee reports that “people have been falling for it like crazy.” The scam, which is a variation on an old Craigslist classic, involves an anonymous landlord who is located overseas posting a “for rent” listing on Craigslist and collecting security deposits and first month’s rent in the form of money wires. It used to be that these homes were often actually occupied, or that the listing entity did not even check to see if the address matched up with the property they were pretending to list. However, as renters have become more savvy, the scammers have resorted to listing real properties that are really for sale or lease. And they’re getting all their information right, because they are using publicly available information posted online by real estate brokers, agents and homeowners.

Wendy Miller, a broker’s assistant at the Cheyenne Assist2Sell, observed that their branch is having a tough time, with what “seems like every week…another one of the houses on Craigslist.” When renters send the absentee landlord their money, the key never appears – and they tend to show up at the house or the brokerage wanting to know just what is going on. Unfortunately, local law enforcement insists that there is not much that can be done about the thievery because the police cannot file charges against people who live overseas. Lieutenant Mark Munari of the Cheyenne Police department simply said that “folks need to be very cautious about internet postings,” reminding would-be renters that “if one of these things sounds too good to be true, it probably is.”

It never hurts to ask to see some legitimate proof of professional certification, and when someone offers to take over your payments and then brings in their daughter to help you draw up the paperwork, it might pay to check their credentials. A mother-daughter team of con artists in California spent nearly two years talking distressed homeowners into letting them “take over” their mortgage payments by renting out their properties[1]. The daughter, posing as a notary, presented legal-looking documents for the homeowners to sign and then, once the owners of the property moved out of the houses, the rent monies were simply placed in the mother’s bank account. Between 2007 and 2009, the team allowed most of the homes to simply slide into foreclosure while taking the rents for themselves.

The mother and daughter have been charged with 44 felonies and ordered to pay restitution, but they have no funds to do so and the daughter is headed to rehabilitation for drug use.

Thanks to $2.5 billion in losses in the third quarter of 2010, Freddie Mac will need an additional $100 million in taxpayer support, the GSE reported yesterday – and that is an improvement[1]. In the second quarter of 2010, Freddie reported a net loss of $6.0 billion. Freddie Mac is hoping that the U.S. Treasury will allow a “draw” of $100 million taxpayer dollars in order to cover the high volume of losses, and reports a “bright spot” in that delinquencies are declining and the credit quality of new loans is improving. After the second quarter of 2010, Freddie Mac asked for $1.8 billion in additional funds.

According to Charles E. Haldeman, Jr., the GSE’s CEO, there have actually been a number of changes that are “good for borrowers” in recent months. He cited “credit problems in our 2005 through 2008 books of business” as the main issue for Freddie Mac, and added that Freddie has “helped more than 210,000 borrowers avoid foreclosure.

Unfortunately, Haldeman’s overall outlook is still not truly bright when it comes to the housing market. He emphasized that the “housing market remains fragile” at the end of 2010 and pointed out that there is “renewed pressure” on the market thanks to the state of the economy, which is still slow, high unemployment numbers and “foreclosure uncertainties”[2]. Haldeman believes that “it will be a considerable time until the housing market has a sustained recovery.”

Thus far, the Freddie Mac and Fannie Mae bailout has been estimated to cost taxpayers $259 billion. Do you think the time has come to stop bailing out the GSEs, or do you think that the continued taxpayer support of the mortgage giants is a productive endeavor?

Thank you for reading! Your comments and questions are welcomed below.

[2] http://news.xinhuanet.com/english2010/world/2010-11/03/c_13589789.htm

Have you ever felt like you could never network fast enough at a big event or that you were simply throwing your cards at people without adequate introduction? If so, then a Midwest real estate investing trend could be the answer for you. A REIA in the Kansas City area has established a special form of speed “dating” just for real estate investors in which investors have a chance to meet each other face to face in a limited-time setting and tell each other about themselves[1]. The REIA charges a fee for non-members, and members attend the networking for free. Each session lasts about three minutes, with a minute for each person to share their expertise and tell a little bit about themselves and a minute to swap cards. Then, the parties move on. The association predicts that if they have a full house, each person will have the opportunity to meet 40 new potential contacts.

Does this sound like a good way to network to you? Have you ever speed networked at an event before?

Thank you for reading! Your comments and questions are welcomed below.

The “leading economists” who participate in the National Association of Business Economics (NABE)’s October 2010 Outlook survey assess the housing market recovery as “tepid overall” but believe that “home prices have hit bottom,” claims the NABE report, released yesterday[1]. These analysts are professionals with firms like Moody’s and Fannie Mae. While the figures and estimates from the 46 analysts were collected before the foreclosure moratoria were implemented, the fact that Bank of America has already resumed foreclosure proceedings in 23 states and predicts that only about 30,000 foreclosures will be delayed at all provides some home that the freeze will not have the long-term, negative effects – like a double dip – on the housing market that had been predicted.

NABE predicts a gain in home prices of 1.2 percent in 2011 along with an improvement in unemployment in 2011 from 9.5 percent to 9.2 percent.

Do you think that this analysis is accurate?

Thank you for reading! Your comments and questions are welcomed below.

A woman in Quincy, New York has recently been indicted for pretending to be a lawyer, obtaining equity lines of credit and mortgages through false information and even taking out loans on properties that did not exist. The woman, along with three other people, allegedly made more than $2.8 million in about two years by submitting appraisals for non-existent properties using other people’s identities. Once the loans were obtained, bills were paid for a short period of time, then the loans were allowed to go into default, at which point it was discovered that at least some of the properties did not exist at all, and that none should have been used as collateral[1].

Authorities dubbed this particular scheme “Operation Stolen Dreams,” and had targeted the fake lawyer (who has multiple aliases) as part of a 38-person sting. She faces 30 years in prison, up to $250,000 in fines and being forced to make restitution.

If Ned Abdul, a Minneapolis real estate developer and landlord, thought he had put his troubled past and possible fraud behind him earlier this year, he was wrong. Abdul, who is already in hot water thanks to possibly skimming cash from a nightclub and event center and fraudulent billing of tenants, now faces charges from a former NHL player who claims that Abdul and a real estate agent conned him out of $1.5 million by flipping commercial properties at inflated prices to him and “other unsuspecting buyers”[1].

Already the target of a federal probe, Abdul now faces charges that he sold the properties at inflated prices the same day he bought them, marking at one up by more than $13 million. While Abdul has big problems and may not be a “nice guy” as a federal probe indicates he is suspected of everything from mail and wire fraud to money laundering, the fact that he is being sued for marking up a property is cause for some concern. Do you think that this lawsuit is justified?

Both Abdul and his partners have denied wrongdoing.

Thank you for reading! Your comments and questions are welcomed below.

Leadership from the National Association of Realtors (NAR) met with representatives from Bank of America and Wells Fargo to discuss difficulties related to getting “deals to the closing table” earlier this week. The trade group has similar meetings scheduled with Chase Home Mortgage and CitiMortgage later this year[1]. While according to NAR, both lenders understand the problems associated with closing deals, particularly in today’s market, NAR is concerned that from a realtor’s perspective, many decisions about lending to buyers appear to be inconsistent and are not clearly explained so that agents can use that information in the future.

As a result of the meetings, both lenders will have an increased online presence designed to educate and provide resources to real estate professionals and will work to speed the loan approval and short-sale approval processes. NAR reported that “the banks do not debate that there is a lot of room for improvement,” and emphasized that “NAR is not yet seeing improvement and communicated that reality to the banks.” Both entities will be working “more closely together on solutions.”

Do you think that NAR was right in taking lenders to task?

Thank you for reading! Your comments and questions are welcomed below.

A California lawyer and his friends worked together with 30 sellers to net over $2 million sales on 30 homes in Orange and Riverside counties in California. On the loan applications for the mortgages on the properties, the lawyer and his cohorts created “straw buyer” persona that appeared to be living in the properties. Once the loans were approved for inflated values, the sellers had to return the inflated portion of the sales price to the conspirators, who then split the extra money[1].

The lawyer who headed the scheme, Gerald L. Wolfe, was originally a registered real estate broker in California. He now faces up to 20 years in a federal prison, and will appear in court for the first time today.

Thank you for reading! Your comments and questions are welcomed below.