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COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII

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Sunday – March 17, 2019

Eviction Fraud: Another Neglected Aspect of Mortgage Abuse

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The vast majority of homeowners facing foreclosure, as well as those who defend to no avail, including many of our listeners, are faced with being served with a writ of possession or writ of ejectment, in either case a court order directing law enforcement to evict all occupants at the foreclosed property.

One would think that in a supposedly civilized society the eviction process would be regulated by law. Wrong.

In most situations what is emerging in the eviction process is just another unregulated fraud waged upon defenseless owners, now producing a feeding frenzy for even more crooks.

Already we have seen how state foreclosure systems obliviously foster corruption and fraud throughout the foreclosure process leading up to eviction — for instance in judicial foreclosures (nonjudicial foreclosures are similar and in some aspects even worse):

1. Privacy Fraud: where homeowner information if in the early stages of default is allowed to be sold and circulated throughout the Internet, resulting in the market value of properties being diminished at the worst time for homeowners trying to sell or refinance to avoid foreclosure.

2. Service Fraud: where process servicers intentionally misdeliver or fake service of process of a foreclosure summons and complaint as a result of laziness or pure dishonesty, resulting in courts assuming jurisdiction through false defaults or inept service by publication.

3. Attorney Fraud: where attorneys are retained, if any can be found or afforded, who untrained and inexperienced often take homeowners’ money, yet rarely are able to stop foreclosures, some never even showing up in court.

4. Attorney Regulatory Fraud: where regulators believing that homeowners in foreclosure are just deadbeats and that anyone taking money to defend them must be unethical, like to pounce on foreclosure defense attorneys, which has led to unprecedented rates of suspension and disbarment of foreclosure defense attorneys nationwide, vulnerable to the claims of emotionally distressed or simply dishonest clients, to the point where attorneys in many States have understandably expressed fear of representing homeowners in foreclosure.

5. Standing Fraud: where the foreclosing plaintiff does not own the mortgage loan yet nevertheless is claiming that it does, either because the loan has been chopped up in the securitized marketplace such that ownership is in doubt, or the mortgage loan has been partially or completely paid off by insurance, or ownership has disappeared due to a prior bankruptcy, a corporate dissolution, or disappearance of the original lender.

6. Loan Modification Fraud: where borrowers apply for federal government sponsored loan modifications, only to go through the false merry-go-round of loan servicer claims of inadequate paperwork, expired paperwork, lost paperwork, unreceived paperwork, inadequate notarizations, and/or inadequate income, often after extorting three trial payments from applicants which sometimes can go on for years.

7. Court Fraud: where judges, often completely uninformed and untrained, allow false and fraudulent robo-signed and MERS’ lenders’ documents to be accepted into evidence, unthinkingly resulting in foreclosure summary judgments.

8. Commissioner Fraud: where those with no marketing credentials, mostly attorneys, are appointed by judges to sell foreclosed properties in a forced auction sale within a few weeks, yet as otherwise formally required falsely recite at confirmation of sale that they have secured the highest possible sale price.

9. Marketing Fraud: where properties to be auctioned are advertised a few times in a local newspaper, charging rip-off thousands of dollars for mini-classified extremely small print ads, requiring for most interested readers a large magnifying glass, supposedly bought to falsely justify resulting sale prices.

10. Credit Bidding Fraud: where foreclosing plaintiffs are permitted to bid at foreclosure auctions using the amount claimed owed to scare away potential competitive bidders understanding they can be outbid by credit bids, thus foreclosing plaintiffs being able to reduce their own auction bids, creating an artificial deficiency in the amount of the unpaid loan balance.

11.Collusive Bidding Fraud: where that small cadre of professional “flippers” who regularly bid at foreclosure auctions conspire together allocating which auctions they will singularly bid on and which they will allow the others to singularly bid on, thus reducing auction bids substantially.

12. Deficiency Fraud: where deficiency judgments are awarded against homeowners resulting from when auction sale net proceeds are lower than the amount claimed owed to the foreclosing plaintiff, even though the true value of the foreclosed property at time of confirmation of sale may have been and is usually much higher, yet no evidentiary hearing is ordinarily allowed to determine that true value or even surplus value absent the foreclosure blight that lowered the confirmed sale price.

We can now ad to the above types of mortgage fraud: #13 — Eviction Fraud.

This comes about when the writ of possession or writ of ejectment is served on the foreclosed homeowner.

Here are the elements of this newest Fraud in general:

A. No notice may be given. The moving vans may arrive. Your belongings will be boxed including your garbage and taken to storage and you will be presented with a huge $8,000 or more moving and storage bill, otherwise not given access to your belongings, which if the fees are not paid your belongings will be auctioned off to insiders for pennies on the dollar if that.

B. This will all be orchestrated by a private process server deputized by law enforcement with a badge on a business card and all, ordinary police officers and deputy sheriffs understandably not wanting that job, private process servers who may be paid extra incentive bucks by the new owner to aggressively remove you, even rough you up, often calling on law enforcement to assist in the process.

C. If found on the property, you will be given a few minutes to gather your things and depart. Otherwise you will be arrested, handcuffed, thrown in a car, taken to a police station, and booked for criminal trespass, along with tenants and your family.

D. In the process, expect some of your belongings to be stolen, broken, and/or misplaced. And you might be liable for a fine or even serve time in jail.

The history of eviction fraud in the land of due process is illuminating:

First, lenders were generally allowed to take your property and throw you out literally. Connecticut and Vermont were once the worst states, where lenders could go into court alleging a default and if prevailing you were out no matter how much equity you might have in your property.

Second, many states began to enact various anti-eviction statutes, allowing for the controlled timing of evictions and extended rights to cure and rights of redemption which today vary from State to State.

Third, tenants in foreclosed properties were eventually given limited federal law possessory rights, depending on whether they had written leases and were considered bona fide tenants.

Nevertheless, most States today have little if any restrictions on Eviction Fraud.

Hawaii for instance is the worst. On today’s show we had planned to air the personal experiences of those in Hawaii caught in eviction fraud, but last minute cancellations have restricted those interviews. So we will recite some of those most recent accounts.

We hope that as a result of today’s show the Hawaii Legislature will investigate eviction fraud and address the issue in forthcoming litigation.

Meanwhile, shouldn’t our judges be similarly concerned what happens to families after they sign, Pontius Pilate like, writs of possession and writs of execution?

Gary

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GARY VICTOR DUBIN
Dubin Law Offices
Suite 3100, Harbor Court
55 Merchant Street
Honolulu, Hawaii 96813
Office: (808) 537-2300
Cellular: (808) 392-9191
Facsimile: (808) 523-7733
Email: gdubin@dubinlaw.net.

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