Los Angeles Personal Injury Lawyer - Att

The Case of a Shattered Windshield, a Dead Fish and a Rose Moves Forward... Sorta

Paul Kiesel — Thu, 18 Jun 2009 19:12:53 GMT

Imprisoned former celebrity P.I. Anthony Pellicano and a man he allegedly hired to threaten former entertainment business journalist Anita Busch (then working as a contract employee for the Los Angeles Times) have pleaded not guilty to two felony charges. Pellicano, who is representing himself, and Alexander Frederick Proctor are expected back in court June 25th for a status conference. A preliminary hearing has been tentatively set for June 29th.

And...

From the Los Angeles Times:

Hollywood private eye Anthony Pellicano and his alleged hired hand, Alexander Proctor, pleaded not guilty Wednesday to charges that they threatened reporter Anita Busch in 2002 to scare her off a story.

Pellicano and Proctor, both 65, were charged four years ago in the threat on Busch's life. Busch, who was then working for the Los Angeles Times, found the fish with a rose in its mouth on the broken windshield of her car along with a sign reading "Stop," court documents allege. The windshield was punctured and made to appear like a bullet hole, prosecutors wrote in the complaint against the two men.

Los Angeles County district attorney's spokeswoman Jane Robison said the case was called for arraignment this week because Proctor, who is serving a 10-year sentence on an unrelated federal drug conviction, made a demand for a speedy trial. Pellicano, who is acting as his own attorney, as he did in his two federal criminal trials, showed up in court wearing an orange prison jumpsuit and a pair of sunglasses because of an eye condition, Robison said.

The case against Pellicano and Proctor was put on hold while the closely watched federal trial against Pellicano and his accomplices moved through the courts. At the conclusion of that trial in December, Pellicano was sentenced to 15 years in prison on a long list of federal wiretapping and racketeering charges. Both Pellicano and Proctor were transferred to state custody for their arraignment.

It was the threat against Busch that triggered the unraveling of Pellicano's investigations business. Proctor told an FBI informant that he had been hired by Pellicano to threaten Busch; based on that statement, authorities obtained a warrant to raid the investigator's Sunset Boulevard office. There, they found the extensive computer files that led to a wide-reaching grand jury investigation into Pellicano's illegal wiretapping enterprise.

Authorities initially charged Proctor in federal court, but dropped the charges after determining they did not have jurisdiction. State prosecutors took over the case and charged Proctor in 2003 with making a criminal threat. They filed an additional case in 2005 charging Pellicano with conspiracy and making a criminal threat, and Proctor with an additional conspiracy count.

If convicted, the men face maximum sentences of three years. They were ordered back in court June 25, Robison said.

Originally posted at InjuryBoard by Paul Kiesel

Countrywide Mortgage Modification to Help 125,000 Struggling Californians

Paul Kiesel — Tue, 07 Oct 2008 15:54:34 GMT

Bank of America, which purchased Countrywide Financial over the summer, will help almost 125,000 Californians who are struggling with pay option arm loans originated by Countrywide.

The move that was announced by Bank of America yesterday could save mortgage holders billions of dollars and could also keep over 400,000 borrowers nationwide in their homes. Countrywide's owner (B of A) agreed to the nation's largest loan-modification program to settle charges of lending abuse (TILA violations) brought by California and other states like Illinois and Connecticut.

The program may reduce borrowers' payments made to Countrywide and provide other benefits that are being estimated at $9 billion nationwide. It has not been determined if the program will switch customers to fixed-rate loans, reduce the interest or principal of the loan or use a method that samples all of the above.

The plan allows for a foreclosure freeze for most borrowers (borrowers that are likely to be helped by the loan modification program and who would qualify under its criteria) until Countrywide determines the borrowers' eligibility.

However, not all loans will be saved, as bank officials were cognizant that some borrowers were so far underwater that investors who own the loans, who purchased the loans via mortgage-backed securities, would have to cooperate, and this appears unlikely. So far investors have been inexorable in not participating in any modification programs as the one proposed yesterday, as they are also trying to get their own money back from Countrywide.

California Attorney General Jerry Brown will announce and detail the value of Countrywide's anticipated $3.5 billion loan modification program today that will help California homeowners who took out these adjustable-rate loans from 2004-2007.

This move by Bank of America sets a precedent for how other homeowners throughout the State of California, who've been victims of lending abuse by other lenders, can seek a remedy and have their loans modified.

Originally posted at InjuryBoard by Paul Kiesel

400,000 Countrywide Mortgages to be Modified

Paul Kiesel — Mon, 06 Oct 2008 20:59:27 GMT

From USA Today: Nearly 400,000 homeowners will be able to have their mortgages made more affordable under an agreement Monday by Bank of America to modify mortgages originated by Countrywide Financial in the largest predatory lending settlement in history.

Bank of America took over Countrywide in July, and Monday's announcement will settle claims by attorneys general in 11 states. Bank of America has agreed to modify loans for homeowners holding sub-prime loans and option adjustable-rate mortgages with Countrywide.

The bank says the settlement could result in up to $8.4 billion in interest-rate and principal reductions for those homeowners.

The loans must have been serviced by Countrywide and originated before Dec. 31, 2007.

The Countrywide settlement will dwarf the $484 million settlement with Household Finance Corporation in 2002, according to the California attorney general's office. Attorneys general in states including West Virginia, California, Connecticut and Illinois had argued that Countrywide deceived borrowers by misrepresenting loan terms, loan payment increases, and the borrowers' ability to afford loans.

"Countrywide's lending practices turned the American dream into a nightmare for tens of thousands of families by putting them into loans they couldn't understand and ultimately couldn't afford," California Attorney General Edmund Brown said Monday.

Details of the agreement:

• Loan modifications will be made for eligible borrowers who are seriously delinquent due to loan features such as resets in adjustable rates. Modifications will also be made for those likely to become delinquent.

• Foreclosure sales will not be initiated or move ahead for borrowers who are likely to qualify until a final decision has been made on whether a homeowner is eligible for a modification.

• Homeowners must occupy the home at issue as their primary residence.

• Eligible homeowners will not be charged loan modification fees, and prepayment penalties will be waived for those with sub prime and pay-option loans that Countrywide or its affiliates own.

A pay-option loan permits borrowers to pay only a small portion of interest and principal owed each month. This can cause the loan balance to balloon.

Some $150 million has been set aside for borrowers in certain states who suffered foreclosure or are at serious risk of foreclosure, and another $70 million is earmarked for relocation assistance to borrowers unable to keep their homes.

Before its sub prime mortgage loans began to falter, Countrywide was the largest U.S. mortgage lender. It was acquired for about $4 billion in stock by Bank of America. The cost of restructuring the loans is within the range of losses Bank of America estimated when acquiring Countrywide.

"Since acquiring Countrywide in July, we have committed significant resources and developed innovative programs to help as many Countrywide customers as possible stay in their homes," said Barbara Desoer, president of Bank of America Mortgage, Home Equity and Insurance Services.

Read Bank of America's full press release here.

Originally posted at InjuryBoard by Paul Kiesel

California and Illinois AGs Sue Countrywide Over Mortgage Loans, Borrowers Misled

Paul Kiesel — Wed, 25 Jun 2008 15:22:27 GMT

California Attorney General Jerry Brown filed a complaint today in Los Angeles state court claiming that Countrywide Chief Executive Officer Angelo Mozilo and a unit specializing in loans to consumers with poor credit used deceptive marketing tactics to entice thousands of borrowers into ARM loans without disclosing that their payments would balloon after 30 days. These are the same TILA violations that I've been blogging on for months now, and it is great to see Jerry Brown be one of the first two AGs to file suit against lenders like Countrywide, who were insatiable in their hunger to glut the mortgage market with misleading subprime loans.

According to Bloomberg News, Mr. Brown seeks restitution for borrowers, civil penalties of as much as $2,500 per violation and a court order halting the practices.

The other AG that has filed a lawsuit today is Illinois Attorney General Lisa Madigan, whom I discussed on Monday, in regards to how several states would be taking the appropriate steps to help mitigate the foreclosure crisis and bring lenders like Countrywide to task. Ms. Madigan contends that, "thousands of Illinois homeowners paid a steep price for Countrywide Financial's 'desire to dominate the marketplace'," (New York Times, 6/25/08). Lisa Madigan had subpoenaed Countrywide for documents last fall when the foreclosure crisis was in its early stages.

Ms. Madigan contends, as does Mr. Brown in California, that Countrywide promoted high-risk loans that contributed to the high number of foreclosures in Illinois and that Countrywide was more concerned with profits than keeping residents in their homes.

Both of these states' lawsuits come on news that Bank of America's acquisition of Countrywide has been approved by the latter's shareholders, earlier today.

Originally posted at InjuryBoard by Paul Kiesel

States to Help Rescue Homeowners from Foreclosures

Paul Kiesel — Mon, 23 Jun 2008 15:45:36 GMT

As Congress continues to talk about providing a federal response to the foreclosure crisis, which has been going on for almost a year, attorneys general, like New York Attorney General Andrew Cuomo, are busy helping troubled homeowners at the state level.

Lawsuits are being filed by AGs across the nation, as AGs also lobby legislatures for tougher mortgage lender laws and build partnerships with mortgage servicers and community development groups to help fight the troubled homeowner battle. And it looks like these efforts are starting to pay off.

According to CNNMoney.com, "The Mortgage Bankers Association says a million home were in foreclosure in the first three months of 2008 [. . .] that number would have been larger if the AGs weren't involved." Therefore, the Bush Administration should tone down its assertions that the Hope Now program has been a major factor or helper of combating foreclosures, when all other evidence, as cited in dozens of InjuryBoard's blocs since March (via news stories), shows that other parties have contributed to a majority of any homeowner relief that has taken place. The Hope Now program has mainly solved problems for homeowners that would have received help anyway, if they had spoken to their lender or servicer to begin with. The Hope Now program does not have a significant success rate, or at least it doesn't provide any evidence, that shows people in underwater mortgages receiving adequate assistance. The successes in troubled homeowner relief is coming from a variety of sources, like state attorneys general.

In Illinois, for instance, Attorney General Lisa Madigan is going after mortgage brokers and lenders she claims used abusive lending practices, such as the TILA disclosure form violations --those violations being one of the more underrated contributors to the foreclosure crisis. In November, she filed suit against Chicago-based mortgage broker One Source Mortgage, alleging the outfit drew in hundreds of clients by advertising low rates on Option ARM loans, but failed to inform the borrowers, usually through tricky TILA forms, that those rates would adjust higher, and often 30 days after the first mortgage payment was made.

In one instance, One Source allegedly told a borrower that his interest rate of .95% would last the entire first year of the loan, however, it jumped to 7.5% after one month. The borrower was still making a monthly payment based on a .95% interest loan, but the rest of the unpaid interest was being compounded, resulting in a negative amortization loan, and a shorter period before the loan reset to the 7.5% interest rate payment (sometimes tripling the prior month's mortgage payment). Hence, why these foreclosures have been happening in waves and in such high numbers; so many people were told disinformation by shady lenders, many of which are no longer in business or have sold the loan to a servicer.

"The vast majority of people with these loans didn't understand them and were lied to by brokers," said Lisa Madigan, (CNNMoney.com, 6/21/08).

The suit that represents disenfranchised borrowers is still making its way through the courts. One Source's phone service, like many other crooked mortgage brokers, has been disconnected, and is currently unrepresented.

Fortunately, we have AGs like Madigan, whose bill is requiring foreclosure notices to include an explanation of options that borrowers have to help them retain their houses. Unfortunately, those explanations weren't available prior to help the borrowers understand his or her options before signing on the loan, but hopefully more oversight throughout the lending industry in the future will prevent the reoccurrence of reckless lending practices from wreaking havoc on the entire economy.

Originally posted at InjuryBoard by Paul Kiesel

When It Comes to Combating Mortgage Fraud, Mukasey is Running in Place

Paul Kiesel — Fri, 06 Jun 2008 18:44:17 GMT

Attorney General Michael Mukasey rejected the idea on Thursday of creating a national task forced to combat mortgage fraud. Mukasey made it clear that he saw mortgage fraud as a major contributor that is helping exacerbate (if it didn't help start) the housing crisis.

However, since Mukasey took over as Attorney General last November, he has been unable to deal with the law enforcement aspect of the growing housing crisis. He is satisfied with using local prosecutors' offices around the country to oversee separate FBI investigations; this could be a costly mistake on so many fronts.

First, he does not see mortgage fraud and the housing crash as equitable to Enron. He made these points clear on Thursday. And he's right and wrong in his assessment. He's right because it is WORSE than Enron and wrong because he doesn't even want to create a task force, which he could at relative minimal cost, through the Justice Department to investigate mortgage fraud more closely and with more resources.

Critics of Mukasey have called, asked and are now begging for the same federal response seen in the Enron case to be applied to the mortgage crisis and the growing number of mortgage fraud related cases and inquiries associated with it.

Congressman Barney Frank sees Mukasey's remarks as "disappointing." Representative Frank, whoheadsthe House financial services committee, sees the mortgage crisis as being "worse than Enron, [because] Enron didn't cause a worldwide recession. This has more innocent victims." Rep. Frank has a legitimate housing bill that has passed through congress but, unfortunately, it doesn't have enough votes to prevent it from being vetoed by President Bush.

Overall, mortgage fraud and its frequency indicates a systematic problem that needs to be corrected through regulation. Lenders were able to go out into the market and trick borrowers into mortgages that were doomed to fail (TILA disclosure fraud). They knew these mortgages were doomed to fail as they were knowingly packaging mortgage-backed securities with the knowledge that the quality of the loans were deteriorating. We have seen lenders like Countrywide and Bear Stearns crash and burn over the last year (as Bear Stearns has been acquired by JP Morgan Chase and B of A is acquiring Countrywide), an apparent sign that the way mortgage-backed securities were being packaged over inflated the value of these lenders' stock. Therefore, the scope of fraud committed by the lenders is even broader than looked upon at first glance, which indicates a need for the White House to take a tougher approach towards mitigating mortgage fraud andincrease the available funds and resouces to combat it effectively.

Mukasey may not want to interject his authority, which he has every right to do, but his recognition of mortgage fraud and his languid approach to dealing with the situation shows that the country is going to have to hold on and wait till the next administration can come in and hopefully clean up this current one's failures: of lost opportunities.

Originally posted at InjuryBoard by Paul Kiesel

Another TILA Victim

Paul Kiesel — Fri, 09 May 2008 17:12:52 GMT

Below is an excerpt from a Seattle Post-Intelligencer article from earlier this morning that relates the story of another borrower who was taken advantage of via TILA documents.

Nancy was a retired widow who wanted to buy a small home in the Redmond area but everything seemed too expensive, even the modest homes that she desired. She met a nice lady in a senior singles group who worked as a mortgage broker who told her that she should not be put off by the price. Instead she should look at the amount of the monthly payments and she should gauge what she could buy by the amount she would have to pay each month. Prices increased quickly enough that she should view the payments as an investment because when she sold she would make a lot of money on the equity she built up.

This made sense to Nancy so she decided to at least have a real estate agent show her some houses. They found a modest house and the real estate agent assured her that it was an excellent investment; houses were going up in price so much that she could always sell the house without any trouble and after a year or so sell it at a profit. Nancy did not want to sell the house but this did give her comfort. She went back to her "friend" the mortgage broker who said that she was getting a great deal on the house and that if Nancy did not buy it she would.

When Nancy asked about financing she was told that the payments would be about $1,300 per month. This was a bit of a stretch but something that she could afford. The broker ran off some numbers and printed a page showing that her payments would come to $1,334.50 each month. She was told that by renting the basement (which could be used as a stand alone apartment) she could easily afford this. Nancy then signed a purchase agreement and went back to the broker who asked her to sign a loan application. She got a call a few days later from the mortgage broker who told her everything was ok and she would receive the loan. She then waived the financing contingency and was locked into buying the house.

Before the closing she went to the broker's office again and was told that everything went smoothly, that she had to tinker with the application a little bit but it was no problem. A couple of days later went to the closing office at a title company to sign the papers. She overwhelmed by the stack of papers that awaited her there. The note that she had to sign was three single spaced pages and was utterly incomprehensible. The Truth in Lending sheet showed that the amount would increase over time but not over $1900. When she called her friend about this she was told that this would not occur for a number of years and that it would be covered by the rent of the improved basement out and anyway she could always sell the house for a profit.

That was two years ago and now she has monthly payments of $3,900, which she cannot afford to make. Foreclosure has been commenced and the house has been listed for six months without an offer. When the foreclosure is completed she will have lost her down payment of $100,000 and installment payments totaling about a third of that. The truth in Lending disclosures were false, but the subprime lender that made the loan is long gone and bankrupt.

Nancy's story shows why a housing bill is needed immediately in order to help aid borrowers who are in similar situations, however, legislation needs to be passed that does not allow lenders to go unaccountable for improper lending practices. Also, more government oversight is needed in investment banking industry in the future and/or tighter regulations in order to prevent a crisis like the current one from occurring again.

Originally posted at InjuryBoard by Paul Kiesel