Los Angeles, CA

Back to business: Subprime brokers resurface as dubious loan fixers

July 20, 2009
From the ninth floor of a downtown office building on Wilshire Boulevard, Jack Soussana delivered staggering numbers of mortgages to homeowners during the real estate boom, amassing a fortune.
     By Soussana's own account, his customers fared less happily. He specialized in the exotic mortgages that have proved most prone to sliding into foreclosure, leaving many now scrambling to save their homes.
     Yet the dangers assailing Soussana's clients have yielded fresh business for him: Late last year, he and his team -- ensconced in the same office where they used to broker mortgages -- began working for a loan modification company. For fees reaching $3,495, with most of the money collected upfront, they promised to negotiate with lenders to lower payments on the now-delinquent mortgages they and their counterparts had sprinkled liberally across Southern California.
     "We just changed the script and changed the product we were selling," said Soussana, who ran the Los Angeles sales office of Federal Loan Modification Law Center. The new script: You got a raw deal, and "Now, we're able to help you out because we understand your lender."

Shelters sued over ban on aid dogs

July 18, 2009
Shawnine Mackay, who often sleeps on the street near Hollywood Boulevard by lowering herself out of her wheelchair onto the ground, said she would love to be able bed down in one of Los Angeles County's dozens of homeless shelters.
     But shelter workers have repeatedly turned her away because of her dog, Molly, who is trained to help her detect and cope with seizures.
     This week, the Housing Rights Center and the Disability Rights Legal Center filed a lawsuit against the Los Angeles Homeless Services Authority and several shelters it funds, alleging that such bans by homeless shelters are against the law.

Attorney General Brown sues foreclosure consultant and attorney who conned homeowners

July 06, 2009
Attorney General Edmund G. Brown Jr. today sued a foreclosure consultant and an attorney - Paul Noe Jr. and Mitchell Roth - who conned 2,000 desperate homeowners into paying exorbitant fees for "phony lawsuits" to forestall foreclosure proceedings.
     These lawsuits were filed and abandoned, even though homeowners were charged $1,800 in upfront fees, at least $1,200 per month and contingency fees of up to 80 percent of their home's value.
     "Noe and Roth ripped off homeowners desperate for help by charging unconscionable fees for phony lawsuits," Brown said. "Instead of aggressively pursuing the lawsuits, Noe and Roth strung them along so they could continue to rake in fees."
     Beginning in mid-2008, Noe promised homeowners facing foreclosure or default he could help them lower or eliminate their mortgage debt.

Cleaning up covenants

June 06, 2009
A month ago, the IJ reported that Hector De La Torre, the son of Mexican immigrants living in suburban Los Angeles, discovered that a racially restrictive covenant in his home deed would have prevented him from buying the home in 1948. Such covenants are rampant in property records around the nation, despite rulings by the Supreme Court and laws by Congress rendering them invalid.
     In 2002, Fair Housing of Marin received a call from a Greenbrae family, outraged upon discovering a restrictive covenant in their deed and asking what could be done to remove it. It read in part: "No portion of the property shall be conveyed, transferred, let to or occupied by anyone other than a person of the Caucasian or White race, subject to the right of any occupant to have the customary and reasonable domestic servants of other races. "
     The homeowner's home was part of a subdivision built in 1946. Even though the covenants were morally repugnant and illegal, we learned that the offensive wording could not be removed from the original deed. We then discovered a state Senate bill that would greatly simplify the invalidating process. We wrote to all the owners in the subdivision asking them to support the bill, and rallied support throughout the county.

Another mayor's aide to work for Obama--Mercedes Marquez has been nominated for a post with HUD

April 18, 2009
Another member of Los Angeles Mayor Antonio Villaraigosa's senior staff is heading to Washington.
     On Friday, President Obama announced that he has nominated Mercedes Marquez, general manager of the city's Housing Department, to become assistant secretary for community planning and development at the Department of Housing and Urban Development.
     If she is confirmed by the U.S. Senate, the post would represent a reunion of sorts for Marquez. During the Clinton administration, she served as the senior counsel to the HUD secretary for civil rights and fair housing.

Congresswoman: Lax fair housing enforcement adds to foreclosure crisis

April 10, 2008
U.S. Rep. Maxine Waters is calling on the federal government to beef up enforcement of the nation's fair housing laws, saying lax enforcement is contributing to the foreclosure crisis. The Democratic lawmaker, who chairs a House subcommittee on housing issues, said Thursday the lack of oversight left some borrowers open to predatory lending, which eventually led to foreclosures.
     She says the Department of Housing and Urban Development and the Department of Justice haven't been aggressive enough in pursuing complaints.

Roommates.com can be sued for violating fair housing laws, court rules

April 04, 2008
The law may temper the freewheeling nature of the Internet after all.
     The 9th U.S. Circuit Court of Appeals decided Thursday that a website may be found liable for violating fair housing laws by matching roommates according to gender, sexual orientation and parenthood.
     Federal law protecting websites "was not meant to create a lawless, no-man's land on the Internet," the court in San Francisco said in an 8-3 ruling.
     The judges said a site called Roommates.com may be brought to trial for possibly violating anti-discrimination laws because it requires users to provide information about gender, sexual orientation and whether they have children, and then uses the information to screen people for matches.

Judge shuts down mortgagors as Brown denounces ‘Fly-By-Night’ lenders

March 19, 2008
A Los Angeles Superior Court judge has frozen the assets of six predatory lending companies and shut them down, Attorney General Jerry Brown said yesterday.
     “As the mortgage crisis worsens, a growing number of fly-by-night companies are employing utterly brazen tactics to push homeowners into illegal and unconscionable loans,” Brown said in a release. “The illegal sales practices of these companies, run by Eric Pony and his family, included psychological pressure, forgery and outright lies.”
     Brown accused Lifetime Financial Inc., Nations Mortgage Inc., Greenleaf Lending Inc., Virtual Escrow Inc., Olympic Escrow Inc., Direct Credit Solutions Inc., Eric Michael Pony, his sister Paulette Pony, his mother Wilma Pony, Eli Hassine, John D H N Nielson, Carol Pencille, and Sibpun Ampornpet of using “bait and switch” tactics as part of a complex predatory lending scheme.
     These companies targeted homeowners with adjustable rate mortgages, according to the documents filed with the court, and telemarketers solicited customers in Spanish, English and Tagalog, falsely claiming that the customer was pre-approved to refinance their mortgage for fixed rate loan a five or six percent interest rate, Brown explained.

AHF sues L.A. Housing Dept. to prevent closure of AIDS site

February 25, 2008
AIDS Healthcare Foundation (AHF) announced its filing of a lawsuit against the City of Los Angeles and the Los Angeles Housing Department (LAHD) for breach of contract and for a "judicial determination" regarding the validity of a years-old loan agreement between LAHD and AHF, the US' largest non-profit HIV/AIDS healthcare, research, prevention and education provider. The loan allowed AHF to construct Linn House, an AIDS hospice care facility in Los Angeles. Thanks to the advances in medical treatment, that hospice use is no longer needed, and AHF now uses the facility to provide other crucial HIV/AIDS services. LAHD, however, is insisting on what AHF believes are outdated, inequitable and unenforceable hospice restrictions. AHF filed the legal action (which was first reported in a news story in today's Los Angeles Times) in Superior Court for the State of California in Los Angeles earlier this month after lengthy negotiations with the City and LAHD failed to amicably and equitably resolve the issue. This lawsuit followed a threat by City officials to initiate foreclose proceedings on the facility if AHF does not immediately repay the $1.1 million loan plus interest. Under the terms of the 40-year loan, the money is not fully payable until after the year 2030.

The American Dream turns into a debtor's nightmare

October 08, 2007
Soledad Aviles dreamed for years of owning a home, with a plot of land where he could grow corn and chiles as he did in his native Mexico. So he felt blessed last year when he learned he could buy a three-bedroom, single-story stucco house on West La Verne Avenue in Santa Ana.
     Referred to a local loan broker by a trusted friend, he borrowed the entire purchase price of $615,000 from Washington Mutual at a high interest rate typical of sub-prime loans. The monthly payment, as he says he understood it, would be $3,600 -- steep for a glass cutter who made $9 an hour -- but Aviles counted on his wife and three of his six daughters, who also worked low-paying jobs, to contribute.

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