Journalism in the Public Interest

One ‘Nightmare’ Mortgage: Problems From Origination Through Foreclosure

A look at one case that shows common indicators of fraud and the challenges of fighting it.


A foreclosure sign is seen in Miami Beach, Fla. (Joe Raedle/Getty Images)

Imogene Hall, a 49-year-old Jamaican immigrant living in Miami, is exactly the kind of poster child you don't want to be. From a mortgage broker's knock on her door four years ago all the way to today, when the Florida courts may be limiting her due process, the Miami Herald has the details on Hall's story, documenting the ways her situation shows many common indicators of fraud.

"If homeownership represents the American dream, then Hall's story is the nightmare," wrote the Herald's executive editor.

A broker (now serving 11 years prison) knocked on her door in late 2005 and said he could help Hall draw on some of the equity she had built in her home, where she had lived since 1997. Hall thought getting some cash would be helpful, since at the time she was having trouble finding work as a nursing aide and had bills to pay.

Ultimately, the broker and his associates pocketed $180,000 while Hall got about $50,000, the Herald reported.

The broker used a "straw buyer" -- someone other than the person living in the house -- to get the mortgage. Reuters has reported that using straw buyers was a common scam:

In this scheme, fraudsters use a fake identity or that of someone else who allows them to use their credit status in return for a fee. The seller pockets the money the buyer borrows from a lender to pay for the home.

The straw buyer listed as his employer a nonexistent Blockbuster video store, yet the lender still gave him the loan.

The broker's plot was aided by a closing agent, title agent and broker's affiliate who have all since been charged or convinced of mortgage-related fraud.

The Sarasota Herald Tribune's award-winning series on fraud in the practice of flipping homes -- where the paper identified $10 billion in suspect sales in Florida -- found that 40 percent of fraudsters were from within the real estate industry, including brokers, attorneys and real estate agents.

After Hall refinanced, she sent her monthly mortgage payments to the brokerage, none of which it forwarded on to the lender. The brokerage sent her "bogus receipts indicating 'mortgage paid,'" the Herald reported. Soon the lender started the foreclosure process. Scammers swarmed Hall even as she tried to save her home. Foreclosure defense lawyers she engaged to help her ended up instead taking thousands of dollars from her for little or poor work.

Initially, the courts recognized signs of fraud in Hall's case and slowed down the process so she could establish her defense. But this July, her case was transferred to Florida's "rocket docket," a special courtroom designed to blitz through thousands of foreclosures that had clogged the courts. In Miami-Dade County alone, the court was supposed to clear about 200 cases a day.

Rolling Stone's Matt Taibbi recently tore into the concept of the rocket docket:

It exists to launder the crime and bury the evidence by speeding thousands of fraudulent and predatory loans to the ends of their life cycles, so that the houses attached to them can be sold again with clean paperwork. The judges, in fact, openly admit that their primary mission is not justice but speed.

In the new court, Hall had just a 15-minute hearing, during which the judge did not allow her or her attorney to speak on her behalf, she told the Herald. She said the judge just told her, "You're going to lose the house, you're going to lose the house."

Law enforcement are set to evict Hall, her four kids and three grandkids from their home next Monday.

Alfred Jordan

Nov. 22, 2010, 3:56 p.m.

It is important to get the name of the judge and post his name to the newspapers. It is important to find out where he lives so that his neighbors know who and what he his. It is also important to find a method to publicly disgrace him and sue him because he was acting outside of his judicial framework.

this judge must be de-frocked then dead

Martha Paschal

Nov. 22, 2010, 5:05 p.m.

While I don’t agree with Alfred’s recommendations, I wholeheartedly agree with his sentiments.  What an awful miscarriage of justice!  It’s disgraceful that this type of abuse should be perpetuated.

As I read all these comments and others in response to earlier posts, I am struck by how effective your government is at making sure you don’t organize around these issues.

What the hell is your house rep/senator doing about the bank fees that are sending homeowners into foreclosure?

Why didn’t the banks have to pay fees to all their account holders (you - you were forced to have a deposit account to get a discount on your interest rate - remember?) when they took the bail-out money?

Why are you sitting by watching a bunch of incompetent bankers collect bonus’ while you lose your homes?  Why should they get off the hook?

This is America.  Your founding father’s took up arms against this type of tyranny . . . this a fact and not an opinion.  Remind our government that the power is with the people and the people are RED HOT mad!

This tyranny is happening because you let it happen.  Get on your computers - make your kids, your parents, your friends and your employers get on theirs as well and let our representatives/senators know that THEIR GRAVY TRAIN IS IN PERIL!

Send one email (the same email) a day to your rep/senator and don’t stop sending them until we hear that the bankers are afraid of the people they are cheating out of hard earned money (on fees) and out of their homes.

You are allowing your government and the banks to rape you.  For God sakes stand up and refuse to be victims!

I’m standing with you.  Good luck.

During the Depression in the 1930’s when the sheriff evicted someone from their home, their neighbors moved them right back in again. It’s again time for people stand up for themselves and don’t take the phony justice dispensed by the bankers courts!

IT is so sad regarding whats happening with the foreclosure fiasco the system is set up& stack against the home owner the banks , courts, & the elected officials dont really care this is all about making profit at all costs , they are preparing for the next wave of cash cows taking these homes by any means necessary so that when those home owners who are homeless will have no other choice but to rent then they are legitimate land barons & they will say they have saved the day & the politicians will compliment them & talk of affordable housing & HUD will use tax payers money to support them & its business as usual.The deck is stack against home owners , they only need your votes but they want the banks goodies.

Bullitt driver

Nov. 22, 2010, 6:20 p.m.

What did you expect?... It’s Florida, the scam capital of the USA..

If a republican candidate that what accused of fraud committed to seniors by overcharging them in Medicaid was elected Governor of Florida in the last elections,
Then, what do you expect ? You are voting for these people for god sakes!

Good Luck

amen to nissim people need to look at candidates for any elective office.

Barbara Ann Jackson

Nov. 23, 2010, 2:57 a.m.

“Although increasing numbers of courts are continuing to reject improper and fraudulent foreclosures, the Congressional Foreclosure Panel examination of mortgage services and foreclosure practices did not include foreclosure lawyers.

Lawyers are officers of the court; knowledge of applicable laws and civil procedure is not required from mortgage lenders.  In states that require judicial foreclosures, lawyers are the ones who file lawsuits to seize and sell property; and lawyers are responsible for filing and recording foreclosure property deeds.

An investigation could prove helpful to sorting out whether improper and illegal foreclosure proceedings are linked to any self-dealing conduct disadvantaging lenders, investors, homeowners, and city governments. . .”
Request for fraudulent foreclosure investigation

This is a classic 3rd world country story.
The only thing missing is the part where the gov’t goons take the victim outback and kill them.

Tell me again why I would want to do business and or take a vacation in the USSA, a 2bit commie country.

We need a bit of the French demonstrations here!  Why AREN’T people just storming the streets and just shutting everything down?  Heads NEED to roll!

We forget that just because things are all right for some of us does not mean we shouldn’t look at what happens when something goes wrong.  The proof of how well a system is working is in how it resolves itself in time of crisis.  The housing meltdown is a huge crisis and throwing people out in the street is not the answer.

Thank you once again propublica for reporting the real news.  My heart goes out to this woman.  What kind of court doesn’t allow an attorney to defend a case?  What the banksters are doing to this country is criminal.  Mind boggling, isn’t it that we have seen no one go to jail?  The savings and loan crisis resulted in hundreds of criminals behind bars, where they belong.  Remember Enron?  CEOs went to jail.

It’s time for a new party, a third party or any party that isn’t bought and paid for by the banksters.  The Department of Sachs is running this country in collusion with its bankster buddies.  Unless voters educate themselves, vote these criminals out of office, nothing will change.

This is a third world country.

This article is flawed Karen, in that it is the systemic fraud at the highest levels of the banking industry that is responsible for the economic depression that now ensues.

One need simply watch the following videos to understand the REAL story. Get your facts straight.

I’m not following. She has occupied house since 1997. How is she a victim of a straw buyer fraud on a refinance? I would like to learn more. She pulled an additional 230K (180+50) out of the house.  If she was a victim of straw buyer fraud in 2005 it is now 2010 has she lived payment free for five years?

Read - she made payments

Nissim Sasson

Nov. 23, 2010, 2:53 p.m.

Sophie, We are all these “Tea Parties” that were screaming like crazy when health care reform? how come we don’t see any of those people screaming for property rights? which are being violated left and right by the banks? falsification affidavits etc committing FRAUD-CLOSURES. Isn’t property rights the core of the capitalism and the core of the American Freedom?
Were are all these people that scream so much for freedom I don’t see any of them screaming to the BANKSTERS!
mmmmm I wonder…..

dRp, your wrong she didn’t continue to pay. Read.

Please don’t answer if you’re ignorant of the facts.

Ms Hall was clearly a victim, however, she claims to have made a total of eight bogus payments starting in 2005 and then received a foreclosure notice, so she has not made a payment for over four years. There is no mention of any current income.

The fraud is not the typical straw man scenario but rather a foreclosure rescue scam that involves surrendering your title to the thief as collateral for the promise of a refinance or a bridge loan to bring you current and then any equity (including inflated appraisal value) is stripped from the property and the foreclosure nevr stops. I am not sure how the title she signed over can get transferred back to her with the new debt but the fraud is centered on the property conveyance more so than the use of a straw buyer.

She was likely facing foreclosure prior to the scam which made it that much more enticing and ultimately that is the tragedy.

nissim sasson

Nov. 23, 2010, 8:44 p.m.

Here is the real nightmare

Wells Fargo teamed up with its attorneys and spent last 4 years in Nevada courts defending its appraisal and mortgage fraud.

Wells Fargo and its attorneys knew it’s Category C Felony to make mortgage loan based on fraudulent appraisal.

Wells Fargo and its attorneys knew it’s Category C Felony to foreclose home based on fraudulent appraisal.

Wells Fargo chose to violate the law and chose to defraud us.

Wells Fargo filed motion on Nov.3rd and demanded us to show cause why Wells Fargo can’t foreclose our home based on fraudulent appraisal and mortgage loan.  We will see whether the judge will continue facilitating such illegal conduct.

Hold Wells Fargo Accountable! Save American Dream! Restore banking integrity.
Please sign the Petition on our website
Please help us to expose Wells Fargo’s mortgage fraud.

Dismantle, scrap and start again. As a confirmed aesthetic I learn without predudice.The Islamic people do not ascribe to bankers interest and reap their financial rewards on the resale of their property. ie, Repayments are for the amount borrowed over anextended period without interest’ To mitigate, an arrangement might apply in western society where A REASONABLE handlig fee may be entertained.But restructuring the mortgage system would require unbiased, people, people.You should find people people on the Pro Publica staff and readers?

Alessandro Machi

Nov. 27, 2010, 3:32 a.m.

Hi, I am trying to get the word out about

Reporters are not using the words Parallel Foreclosure
when they discuss foreclosures that start before a homeowner can apply for HAMP.

In Illinois, and probably every other state, lawyers are supposed to file suits that are meritorious.  In other words, if the foreclosure itself is fraudulent or the loans docs on which the loan is based are fraudulent, yet the attorney nevertheless files the suit is that a breach of the code of ethics?  Likewise, is it malicious prosecution to file foreclosure proceedings against homeowners who have breached their contracts when the underlying contract is null and void because of fraud?

“Fractional Banking” has depended more and more on the ignorance of a consuming public.  The only way out of this mess is for the public to educate themselves so that they understand that the system depends on the, “Greater Fool Theory” of business….there has to be a greater fool to purchase what you feel is the ultimate consumer article when you get tired of it or feel you can resell it to a gullible public.
There’s enough blame to go around.  The problem now (and in the past) is that corrupt politicians have aided and abbeded (sp?) the most wealthy in the USA and literally “screwed” the rest of the Western World….
And, the results are not pretty.

This article is part of an ongoing investigation:
Foreclosure Crisis

Foreclosure Crisis: Banks and Government Fail Homeowners

Banks and the government have fallen short in helping homeowners in danger of foreclosure.

The Story So Far

Systemic failures at the country’s banks and mortgage servicers have exacerbated the most severe foreclosure crisis since the Great Depression, and government efforts to limit the damage have fallen short. ProPublica created an unrivaled database of homeowners who have faced foreclosure, opened a Facebook page to encourage homeowners to share their stories, wrote profiles of some of them, and incorporated their experiences into our reporting. We also provided a comprehensive rundown of the numbers behind the crisis.

More »

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