"Public housing tenants to pay higher rents"
2014-04-08 by Lynda Carson [tenantsrule (@) yahoo.com], posted to [https://www.indybay.org/newsitems/2014/04/08/18753792.php]:
Oakland - With around 50 million people living below the federal poverty line including 47 million people receiving food stamps, the attack on the poor by the Democrats, Republicans and the Obama Administration has heated up again by forcing public housing tenants across the nation to pay higher rents effective June 1, 2014.
Many public housing tenants are now facing major rent increases according to Section 210 of the Department of Housing and Urban Development (HUD) Appropriations Act of 2014. The FY 2014 omnibus appropriations bill (H.R. 3547) affecting public housing tenants was passed by a Senate vote of 72 to 26 on January 16, 2014, and shortly after was signed into law by President Obama.
The Oakland Housing Authority currently has 2,121 public housing units and based on the latest census report, Oakland has the highest poverty rate for children in the Bay Area with more than 27 percent of them residing in households earning less than $23,000 annually.
The bill H.R. 3547 requires a significant change to the way public housing tenants are being charged rents, and requires Public Housing Authorities (PHAs) to establish flat rents at no less than 80 percent of the fair market rent (FMR), effective June 1, 2014. This is a huge change from the old policy of setting flat rents at no less than 60% of FMR, and will hurt many public housing tenants locally, and across the nation. The higher rents are intended to affect higher income public housing tenants at 60 to 80 percent of median family income, and residents will have the choice of paying an income-adjusted rent, or paying a flat rent.
The latest attack on poor public housing tenants are in addition to the recent nearly $9 billion in cuts to the food stamp program that are to occur over the next decade, including massive across-the-board sequestration budget cuts that have occurred, and other on-going attacks on our nations poverty programs being orchestrated by Republicans and Democrats alike.
As an example of how the higher rents will affect some public housing tenants, it was reported that Columbia public housing tenants living at the Bear Creek project in Missouri, will see their rents more than double. Additionally, tenants at the Stewart Parker site will have their rents incrementally increased from $345 per month to $809 per month, over the next three years.
Other major changes in effect may also affect Section 8 housing choice voucher holders. Under HUD's old guidelines, Section 8 tenants that used to be considered as extremely low-income (ELI) tenants had an income of 30% of the area median income (AMI), or less.
Under HUD's new guidelines set during January of 2014 as a result of H.R. 3547, extremely low-income tenants are now being defined as persons with an income higher than 30% of the AMI, or the federal poverty line, adjusted for family size. The new change in definition may eventually mean that Section 8 voucher holders may also face higher rents in the future, along with their comrades in public housing. However, the rent increase to public housing tenants are not supposed to affect Section 8 tenants presently.
Strange as it may appear, now that extremely low-income persons are being defined by HUD as people with an income higher than 30% of AMI, or the federal poverty line, HUD has declined to give a new name to the millions of poor people living in poverty with an income of 30% of AMI, or less all across the country.
To help put the situation of people living in poverty into perspective. According to the latest Bureau of Labor Statistics, April 4, 2014 report, 10.5 million people are unemployed, and for many of those who are working at minimum wage, the federal minimum wage has been stuck at $7.25 an hour since July of 2009.
Additionally, the federal poverty line for an extremely low-income person was listed in 2009 as one person earning $10,830 annually, or less. The new poverty line for 2014 is listed as one person earning $11,670 annually or less, even though the minimum wage has been stuck at $7.25 an hour since 2009.
Other Local Public Housing Tenants Facing Rent Increases -
The Alameda County Housing Authority has 72 public housing units. The San Francisco Housing Authority has 6,592 public housing units. The Richmond Housing Authority has 715 public housing units. The Housing Authority of Contra Costa County has 1,177 public housing units. The Housing Authority of Marin County has 496 public housing units. The City of Livermore Housing Authority has 125 public housing units. The Santa Cruz County Housing Authority has 234 public housing units.
Tuesday, April 8, 2014
Saturday, March 22, 2014
Well's Fargo manual shows common use of forging foreclosure documents
Also see:
* Well's Fargo attacks Indybay.org newswire for publishing bank manual describing systematic forgery of foreclosure documents [link].
* Wells-Fargo Foreclosure Manual (Pub. 2011-11-09, current 2012) [link]
"Wells Fargo instructions for fabricating foreclosure documents" 2014-03-22 by IndyRadio [http://www.indyradio.nu/content/wells-fargo-instructions-fabricating-foreclosure-documents]:
Wells Fargo manual for fabricating foreclosure documents was distributed to Wells lawyer one week after settlement with DOJ. 150 page leaked document attached. download PDF (2.5MB) [https://www.indybay.org/uploads/2014/03/22/wells-fargo-foreclosure-manual.pdf].
One week after the non-prosecution settlement with the DOJ, Well Fargo published a 150 page manual to aid employees in fabricating foreclosures. The document was made available by the Washington Post, and discussed on Democracy Now! Friday [http://www.democracynow.org/2014/3/21/as_wells_fargo_is_accused_of]:
[begin excerpt]
LINDA TIRELLI: Good morning.
AMY GOODMAN: Can you describe this manual, how you got it and what it reveals?
LINDA TIRELLI: Absolutely. The manual that I have, it’s actually entitled the "Wells Fargo Home Mortgage Foreclosure Attorney [Procedure] Manual, Version 1." And it says on it that it’s last published 2/24/2012. Mind you, the national mortgage settlement agreement was announced a week prior, on 2/19/2012.
The way I obtained it, it was actually sitting right there on the Internet, of all things. A colleague of mine, through a Max Gardner’s Bankruptcy Boot Camp, which I am a member, an active member, gave it to me and said, "Hey, I found this online, and I know you’re doing a lot of Wells Fargo cases. Maybe you can use this."
Reading it, my jaw just dropped. As I see it, it’s clearly outlining procedures, not just for the $12-an-hour robo-signers that we've heard about all these years, but for the lawyers, who need to be held accountable to a much higher degree. It’s the manual for the lawyers to actually fabricate documents, as I see it, and request that documents that are lacking be fabricated by Wells Fargo.
[end excerpt]
---
2014-06-29 posted by Indyradio to [https://facebook.com/IndyRadio]:
Having gained impunity for the money laundering of their new investment division, Wachovia, Wells Fargo entered in to the national foreclosure settlement agreement. One week later an internal memo bragged about an automated process for (a new round of) foreclosures, even when the original contracts have been lost. the manual for creating false foreclosure documents was still being printed one week after they signed the settlement. [http://www.scribd.com/doc/213340455/3-Wells-Fargo-Home-Mortgage-WFHM-Foreclosure-Attorney-Procedure-Manual-Version-1-Basis-of-Terelli-s-Franklin-Litigation-Controversy].
The same DOJ that provided guns to Mexican cartels gave a pass to Wells Fargo in 2010, after Wells bought their money launderer, Wachovia. The Guardian explains the unique arrangement, but at the time we didn't know about "Fast and Furious" [http://www.theguardian.com/world/2011/apr/03/us-bank-mexico-drug-gangs].
We know the Washington Post has the Wells Fargo manual for creating fake foreclosures, but Wells Fargo has recently hired some hacks to go after Indymedia for sharing it [https://www.indybay.org/newsitems/2014/06/28/18758001.php].
"How to Fabricate Evidence: Wells Fargo’s Foreclosure Manual Confirms the Worst"
2014-03-15 from "The Florida Foreclosure Fraud Weblog" [floridaforeclosurefraud.com/2014/03/how-to-fabricate-evidence-wells-fargos-foreclosure-manual-confirms-the-worst/]:
If there was any doubt in your mind that banks have been forging evidence [http://floridaforeclosurefraud.com/category/fake-documents/], put it to rest. According to the New York Post [http://nypost.com/2014/03/12/wells-fargo-made-up-on-demand-foreclosure-papers-plan-court-filing-charges/], an internal Wells Fargo manual has now leaked confirming the exact procedures Wells and its attorneys use to fabricate evidence in foreclosure cases—down to the computer codes they use to order production of falsified documents.
The manual itself is now spreading like wildfire, and I’ve got a copy of it here. [PDF] [http://floridaforeclosurefraud.com/wp-content/uploads/2014/03/Wells_Fargo_Attorney_foreclosure_attorney_procedure_manual_20120224.pdf]
The 150-plus-page document describes how Wells Fargo expects its attorneys to prepare and handle files in foreclosure cases. When Wells begins a foreclosure case, page 14 tells us what is supposed to happen:
"Documents include the original note, recorded mortgage, title policy, and recorded and unrecorded assignments. Documents are sent to imaging so that at the time of referral they can be uploaded via VendorScape or Desktop to the Foreclosure Attorney."
In other words, the attorney should have a complete copy of the original note, as it exists at the time the foreclosure begins, before filing the foreclosure lawsuit. But not all cases go so smoothly. Sometimes the original note is missing. Sometimes the original note lacks an endorsement—the signature or stamp, like the signature on the back of a check, that transfers the note from one party to another. Sometimes the lawyers need to create an “allonge” to add a missing endorsement. Wells Fargo has a policy and procedure for each of these cases, and that’s where the trouble starts.
Robo-Signing Lost Note Affidavits -
The real meat begins on page 15. What happens if the original note never makes it to the attorney? They communicate that fact back to Wells Fargo through the “VendorScape” or “Desktop” system—basically, a fancy kind of instant-message and tracking system between the lawyers and their supposed clients:
"Attorney: If after the third business day of the referral date you have not received the note, add log code NOTRRP in VendorScape or add the Note Not Received in Referral Package Issue in Desktop. This can be done by selecting Issues from the Tool Menu and selecting Add Issue."
Wells Fargo’s document team then swings into action:
"WFHM Default Docs Team: Research missing note:
• If note is found: complete the K64 step with the actual date the note was provided/sent to the Attorney. If the state does not require the original note, the document will be uploaded to LIV. Otherwise, send the note via mail and track for delivery.
• If note is not found: complete the K64 step, delete the N82 step, and add step N83, LOST NOTE AFFIDAVIT NEEDED. Only the Default Doc Team should be adding the N83 step to FOR3."
Wait: shouldn’t they know if they have the original note before they begin foreclosure proceedings? (Hush friend, that’s just a technicality.)
But again, there’s more paperwork to be done. The attorney prepares a form affidavit, and then send it to Wells Fargo for signature. And then someone at Wells Fargo just signs the affidavit:
"Attorney: Once the N83 step is placed on the loan, this will authorize your office to create and forward a lost note affidavit as described in the Lost Note Affidavits (LNA) process in this manual.
WFHM Default Docs Team: Once you receive, execute, and return the LNA to the Attorney, close the N83 step."
By the way, did you catch what doesn’t happen in this loop? At After the attorney prepares the cookie-cutter affidavit using this form, Wells Fargo just signs it without making any investigation into whether the affidavit correctly states the facts of how the note was supposedly lost or what search for the note was done. In other words, more robo-signing. Haven’t we been here before?
Manufactured Endorsements -
So what happens when the attorney gets the original note, but it doesn’t have an endorsement on it, the mark that legally transfers the note to the foreclosing bank? That’s when, on page 17, things really get dicey:
"Note Endorsement **Please Note** This process is only to be used if your office has already received the note. If you have not received the note, follow process for requesting the note listed in the Missing Note Process section of this manual."
That last part is important—this process can only be used when the attorneys already have the original in their custody. Remember that.
"Attorney: Enter step Z02 (Endorsed Note Needed) to the FOR3 screen (if a loan is in foreclosure) or the BNK3 screen (if a loan is in Bankruptcy).
WFHM Default Docs Team: Research needed endorsement.
If the blank endorsement is in the file for an original state [a state that requires filing the original note in a foreclosure proceeding, like Florida], execute the endorsement, send the original document to the attorney, and complete the Z02 step."
So once the attorney has the original note, if it’s missing an endorsement, Wells Fargo employees “execute the endorsement” and then send it to the attorney—who already has the original note. This means that they aren’t applying the endorsement to the note itself, but to a separate document which the attorney must apparently attach to the note later. This is legally insufficient to transfer the note, and creates a huge legal problem for every Wells Fargo foreclosure in Florida and other “original document” states. (For more on why this is a problem, the ambitious reader may want to take a look at Adams v. Madison Realty & Development, Inc., 853 F.2d 163, 164 (3d Cir.1988) [http://scholar.google.com/scholar_case?case=15952441306028509721&hl=en&as_sdt=40006].)
Fortunately for borrowers, Wells Fargo will completely track this sequence of events in Desktop, on the FOR2 and FOR3 screens. A skilled attorney can obtain and decipher these documents, by paying particular attention for Z02 codes.
Fabricating Allonges -
Wells Fargo fabricates allonges in very nearly the same way. (What is an allonge? The Adams case explains, but so do Florida cases Booker [link], Isaac [link], and Bohatka [http://scholar.google.com/scholar_case?case=5199606611838758210]: “An allonge is “a piece of paper annexed to a negotiable instrument or promissory note, on which to write endorsements for which there is no room on the instrument itself. Such must be so firmly affixed thereto as to become a part thereof.” Some people joke that “allonge” is simply a French word meaning “fraud.”)
Because the allonge is the piece of paper the endorsement is applied to, it has to be attached to the note at the time the endorsement is made. (Again, see Adams.) If not, it fails to transfer the note. So what happens in Wells Fargo’s world?
"Attorney: If an allonge is still needed after a note has been endorsed, forward the allonge attachment to Wells Fargo Default Docs area via email address Defaultallongemailbox@wellsfargo.com and add step Y44, ATTORNEY REQUESTED ALLONGE, to FOR3."
So what happens if the attorney needs an allonge but still has the original note? No problem! (Actually, big problem.) Wells just executes the allonge and then sends it back to the attorney who then attaches it to the note later.
"WFHM Default Docs Team: If property is located in an original doc state and attorney has the original note, review the allonge attachment to determine if we have signing authority to execute internally.
• If WFHM does have signing authority, enter log code FCALGI (ALLONGE SENT FOR INTERNAL SIGNATURE)
• If WFHM does not have signing authority, enter log code FCALGE (ALLONGE SENT OUT FOR EXECUTION) and mail document for 3rd party signature.
• After allonge has been executed, enter log code FCALGA (ALLONGE COMPLETED/RETURNED TO ATTORNEY).
• Complete the Y44 actual date with the date allonge was returned to attorney."
This, simply put, means it is the policy and practice of Wells Fargo to manufacture evidence of standing. The good news for borrowers: a skilled attorney can review the FOR2 and FOR3 screens, and look at the dates of the N82 (NOTE SENT TO ATTY) and the Y44 (ALLONGE COMPLETED/RETURNED TO ATTORNEY) codes. That will tell the whole story.
What To Do If Wells Fargo Sues You -
You can tell if you get sued by Wells Fargo. They will either be named as the plaintiff, or the complaint will be verified by a Wells Fargo employee. So if you get a lawsuit with Wells Fargo’s filthy fingerprints all over it, find someone who knows how to obtain and read Wells Fargo’s records—the very records that will expose the fraud. Give us a call at (888) 830-0830 or contact us online for an appointment.
"Allonge is a French word for fraud" posted 2014-03-10 by by Florida Foreclosure Lawyer Michael Wasylik to [http://www.youtube.com/watch?v=sb5Zy9wsvWM]:
Why the appearance of an "allonge" in your foreclosure is a red flag for fraud—Florida foreclosure defense lawyer Michael Alex Wasylik explains.
Have foreclosure questions? Call us at 352-567-3173 and don't forget to download our FREE 30-page Consumer Guide to Defending Florida Foreclosures: [http://ricardolaw.com/guide]
Notice in the following article, the Department of Justice says "Finding hard evidence has proved difficult". They are proven Liars.
2011-12-22 by Scot Paltrow, edited by Michael Williams and Chris Kaufman
[http://www.reuters.com/article/2011/12/22/us-usa-foreclosure-idUSTRE7BL0M020111222]
(Reuters) - Four years after the banking system nearly collapsed from reckless mortgage lending, federal prosecutors have stayed on the sidelines, even as judges around the country are pointing fingers at possible wrongdoing.
The federal government, as has been widely noted, has pressed few criminal cases against major lenders or senior executives for the events that led to the meltdown of 2007. Finding hard evidence has proved difficult, the Justice Department has said.
The government also hasn't brought any prosecutions for dubious foreclosure practices deployed since 2007 by big banks and other mortgage-servicing companies.
But this part of the financial system, a Reuters examination shows, is filled with potential leads:
Foreclosure-related case files in just one New York federal bankruptcy court, for example, hold at least a dozen mortgage documents known as promissory notes bearing evidence of recently forged signatures and illegal alterations, according to a judge's rulings and records reviewed by Reuters. Similarly altered notes have appeared in courts around the country.
Banks in the past two years have foreclosed on the houses of thousands of active-duty U.S. soldiers who are legally eligible to have foreclosures halted. Refusing to grant foreclosure stays is a misdemeanor under federal law.
The U.S. Treasury confirmed in November that it is conducting a civil investigation of 4,500 such foreclosures. Attorneys representing service members estimate banks have foreclosed on up to 30,000 military personnel in potential violation of the law.
In Alabama, a federal bankruptcy judge ruled last month that Wells Fargo & Co. had filed at least 630 sworn affidavits containing false "facts," including claims that homeowners were in arrears for amounts not yet due.
Wells Fargo "took the law into its own hands" and disregarded laws banning perjury, Judge Margaret A. Mahoney declared.
And in thousands of cases, documents required to transfer ownership of mortgages have been falsified. Lacking originals needed to foreclose, mortgage servicers drew up new ones, falsely signed by their own staff as employees of the original lenders - many of which no longer exist.
But the mortgage-foreclosure mess has yet to yield any federal prosecution against the big banks that are the major servicers of home loans.
UNPRECEDENTED FRAUD -
Reuters has identified one pending federal criminal investigation into suspected improper foreclosure procedures. That inquiry has been under way since 2009.
The investigation focuses on a defunct subsidiary of Jacksonville, Florida-based Lender Processing Services, the nation's largest subcontractor of mortgage servicing duties for banks.
People close to the investigation said indictments may come as early as the end of this month. Nationwide press reports had showed photos of what appeared to be obviously forged signatures on foreclosure affidavits.
The Justice Department doesn't disclose pending investigations, making it impossible to say if other criminal inquiries are underway. Officials in state attorneys' general offices and lawyers in foreclosure cases say they have seen no signs of any other federal criminal investigation.
"I think it's difficult to find a fraud of this size on the U.S. court system in U.S. history," said Raymond Brescia, a visiting professor at Yale Law School who has written articles analyzing the role of courts in the financial crisis. "I can't think of one where you have literally tens of thousands of fraudulent documents filed in tens of thousands of cases."
Spokesmen for the five largest servicers - Bank of America Corp., Wells Fargo & Co., JP Morgan Chase & Co, Citigroup Inc., and Ally Financial Group - declined to comment about the possibility of widespread fraud for this article.
Paul Leonard, spokesman for the Housing Policy Council, whose membership includes those banks, said any faults in foreclosure cases are being addressed under a civil settlement earlier this year with federal regulators.
FALSE STATEMENTS -
Justice Department and Federal Bureau of Investigation officials say they have brought mortgage-fraud criminal cases through their "Operation Stolen Dreams." None, however, were against big banks. All targeted small-scale operators who allegedly defrauded banks with forged mortgage applications or took advantage of homeowners by falsely promising arrangements to get them out of default and then pocketing their money.
Justice Department spokeswoman Adora Andy declined to comment on the absence of prosecutions for foreclosure practices by big banks. She said in a statement: "The Department of Justice has been and will continue to aggressively investigate financial fraud wherever it occurs, including at all levels of the mortgage industry and, when we find evidence of a crime, we will not hesitate to pursue it."
Some judges have accused banks of falsely stating in court that they are working on loan modifications for homeowners in default.
In a November 30 court hearing, not previously reported, a federal bankruptcy judge in New York accused Bank of America of falsely telling courts and the public that it was working to renegotiate loans.
"Bank of America issues constant press releases about how it is responsive to their borrowers on these issues. They are not, period," said Judge Robert Drain, in a case involving homeowner Richard Tomasulo, a pharmacist from Crompond, New York. Drain said Bank of America had been telling the court since January that it was working to modify Tomasulo's mortgage, but hadn't done so.
"Whoever is in charge of this program and their supervisor, who should be following it, should be fired" because "they are frankly incompetent."
Bank of America spokeswoman Jumana Bauwens said the bank has completed "nearly one million" modifications since 2008. The U.S. Treasury this year suspended loan modification incentive payments to the bank because it was "seriously deficient" in responding to requests for modifications.
CHEATERS AND LIARS -
Foreclosure fraud came to light in September 2010, with evidence that employees of Ally Financial Corp. had committed "robo-signing," in which low-level workers signed and swore to the facts in thousands of affidavits they hadn't read or checked.
The affidavits were notarized outside the signers' presence, in apparent violation of state and federal criminal laws.
Since then, mounting evidence of possible foreclosure fraud has convinced judges and state regulators that servicers have harmed homeowners and the investors who bought mortgage-backed securities.
A unit of the Justice Department that oversees bankruptcy court cases, the U.S. Trustees Program, said in its 2010 annual report that there were "pervasive and longstanding problems regarding mortgage loan servicing," which "are not merely 'technical' but cause real harm to homeowners in bankruptcy."
Banks, the Trustees Program says, have falsified affidavits by claiming homeowners owe fees for services never rendered and by overstating how much owners are behind on payments.
Former federal prosecutor Daniel Richman, a professor of criminal law at Columbia University Law School, says a central question is who prosecutors would target in criminal investigations. Richman said it would be easy but not worthwhile to charge large numbers of rank-and-file workers who, directed by supervisors, falsely churned out affidavits.
He said criminal investigations would be warranted, but harder to bring, "if there are particular individuals who lie at the heart of this conduct in a very significant way."
In October 2010, members of Congress pressed the Justice Department to investigate. Attorney General Eric Holder said investigations were best left to the states, with help from the Justice Department.
The Office of the Comptroller of the Currency, the top bank regulator, quickly negotiated settlements with the 14 largest servicers, requiring changes in practices and "remediation" for harmed homeowners. That settlement allows the banks to choose their own contractors to determine who was harmed and by how much.
Lawmakers and homeowner advocates have criticized the arrangement, contending that it will let the banks avoid making all wronged homeowners whole, because the contractors are paid by and answer to the banks.
Since then, the department's civil division has worked with a shaky coalition of all 50 states, which have been seeking a civil settlement with five banks that are the largest loan servicers. The negotiations center on requiring them to pay $20 billion or more in penalties, only some of which would go to compensate wronged homeowners.
STATES TAKE ACTION -
Federal law enforcement has been noticeably absent, even in areas hardest hit by the crisis, such as Las Vegas.
In 2010 the FBI's Las Vegas office shut down its mortgage fraud task force, which had focused on small-scale swindlers.
Tim Gallagher, chief of the FBI's financial crimes section, said that the Las Vegas office had asked to transfer agents to other duties.
Impatient with the lack of federal prosecution, states including New York, Massachusetts, Delaware and California have launched their own investigations of the banks.
In November, it became the first state to file criminal charges. The state attorney general obtained a 606-count indictment against two California-based executives of Lender Processing Services.
It accuses the executives of paying Nevada notaries to forge the pair's signatures and falsely notarize them on notices of default, documents Nevada requires in foreclosure actions. State officials said more indictments are expected.
In an interview, John Kelleher, Nevada's chief deputy attorney general, said the investigation began in response to citizen complaints.
"We were concerned and then shocked at the sheer number of fraudulent documents we were finding that had been filed with the county recorder," Kelleher said.
Investigators found "tens of thousands" of false records filed on behalf of big mortgage servicers, he said.
The two executives have pleaded not guilty. In a press release, the company said: "LPS acknowledges the signing procedures on some of these documents were flawed; however, the company also believes these documents were properly authorized and their recording did not result in a wrongful foreclosure."
BACK HOME IN NEW YORK -
The U.S. Attorney's Office in Manhattan is the federal prosecutors' office that traditionally has filed the most cases against top banks and financiers. But it hasn't brought any foreclosure-related criminal cases involving Wall Street's biggest financial houses or the law firms that represent them.
To date the only step it has taken publicly was an October 2011 civil settlement with New York State's largest foreclosure law firm.
The Steven J. Baum P.C. law firm, based near Buffalo, New York, in recent years filed approximately 40 per cent of all foreclosures in New York State, on behalf of banks and other mortgage servicers. Court records show that the firm angered state court judges for alleged false statements and filing suspect documents.
Arthur Schack, a state court judge in Brooklyn, in a 2010 ruling said that pleadings by the Baum firm on behalf of HSBC Bank, a unit of London-based HSBC Holdings, in a foreclosure case were "so incredible, outrageous, ludicrous and disingenuous that they should have been authorized by the late Rod Serling, creator of the famous science-fiction television series, The Twilight Zone."
Another state judge that year imposed $5,000 in sanctions and ordered the firm to pay $14,500 in attorneys' fees, ruling that "misrepresentation of the material statements here was outrageous."
But the U.S. Attorney's office in Manhattan filed no criminal charges against the Baum firm. Instead, it signed a settlement with Baum ending an inquiry "relating to foreclosure practices." The agreement made no allegations of wrongdoing, but required the firm to improve its foreclosure practices.
Baum agreed to pay a $2 million civil penalty, but didn't admit wrongdoing.
The law firm said it would shut down after New York Times columnist Joe Nocera in November published photographs of a 2010 Baum firm Halloween party in which employees dressed up as homeless people. Another showed part of Baum's office decorated to look like a row of foreclosed houses.
"The settlement between the Manhattan U.S. Attorney's Office and the Steven J. Baum Law Firm resulted in immediate and comprehensive reforms of the firm's business practices," said Ellen Davis, spokeswoman for the Manhattan U.S. Attorney's office.
Earl Wells III, a spokesman for Baum, said the lawyer wouldn't comment because "he's laying low right now."
An HSBC spokesman said: "We are working closely with the regulators to address any matters raised regarding" the bank's foreclosure practices.
BROKEN PROMISES -
The most serious potential foreclosure violations involve falsified mortgage promissory notes, the documents homeowners sign vowing to repay mortgage loans. Courts uniformly have ruled that unless a creditor legally owns the promissory note, it has no legal right to foreclose. For each mortgage there is only one promissory note.
Bankruptcy court records reviewed by Reuters show that at least a dozen radically different documents purporting to be the authentic promissory note have turned up in foreclosure cases involving six different properties in the federal bankruptcy court for the Southern District of New York.
In one, Wells Fargo is battling to foreclose on the Bronx home of Tindala Mims, a single mother who works as an ambulance driver. In September 2010, Wells Fargo filed a promissory note bearing a signed stamp showing that the note belonged to defunct Washington Mutual Bank, not Wells Fargo. The judge threw out the case.
In a second attempt, the court was given a different version of the note. But inspection showed physical alterations. A variety of marks on the original were missing or seemed obviously altered on the second. And the second version had a stamped endorsement, missing on the first, that appeared to give Wells Fargo the right to foreclose.
The judge threw out the second attempt too. Wells Fargo is trying a third time. It declined to comment on the case.
Linda Tirelli, Mims' lawyer, in October sued Wells Fargo, alleging "fabrication of documents."
"It seems to me that Washington is deathly afraid of the banking industry," Tirelli said. "If you're talking about filing false documents and filing false notarizations, do you really think that the U.S. Attorney would find it too difficult to prosecute?"
The office of Attorney Preet Bharara in Manhattan has routinely brought charges involving forgery and filing false documents against smaller targets.
In April, the FBI arrested seven employees of the USA Beauty School in Manhattan. Bharara's office alleged that the seven suspects had forged documents such as high school diplomas, attendance records and applications for financial aid for students taking cosmetology classes.
In August, Bharara's office filed felony charges against a sports-memorabilia company's CEO, accusing him of auctioning jerseys falsely advertised as "game used" by Major League Baseball players.
In a press conference, a U.S. Postal Inspection Service official said prosecution was important because "victims felt that they had a piece of history only to be defrauded and left with a feeling of heartbreak."
Given the record of Bharara's office, and those of his fellow U.S. Attorneys around the country, to aggressively pursue violations both big and small, the absence of cases involving the foreclosure fiasco seems to stand out.
"Why there hasn't been more robust prosecution is a mystery," said Brescia, the visiting professor at Yale.
* Well's Fargo attacks Indybay.org newswire for publishing bank manual describing systematic forgery of foreclosure documents [link].
* Wells-Fargo Foreclosure Manual (Pub. 2011-11-09, current 2012) [link]
"Wells Fargo instructions for fabricating foreclosure documents" 2014-03-22 by IndyRadio [http://www.indyradio.nu/content/wells-fargo-instructions-fabricating-foreclosure-documents]:
Wells Fargo manual for fabricating foreclosure documents was distributed to Wells lawyer one week after settlement with DOJ. 150 page leaked document attached. download PDF (2.5MB) [https://www.indybay.org/uploads/2014/03/22/wells-fargo-foreclosure-manual.pdf].
One week after the non-prosecution settlement with the DOJ, Well Fargo published a 150 page manual to aid employees in fabricating foreclosures. The document was made available by the Washington Post, and discussed on Democracy Now! Friday [http://www.democracynow.org/2014/3/21/as_wells_fargo_is_accused_of]:
[begin excerpt]
LINDA TIRELLI: Good morning.
AMY GOODMAN: Can you describe this manual, how you got it and what it reveals?
LINDA TIRELLI: Absolutely. The manual that I have, it’s actually entitled the "Wells Fargo Home Mortgage Foreclosure Attorney [Procedure] Manual, Version 1." And it says on it that it’s last published 2/24/2012. Mind you, the national mortgage settlement agreement was announced a week prior, on 2/19/2012.
The way I obtained it, it was actually sitting right there on the Internet, of all things. A colleague of mine, through a Max Gardner’s Bankruptcy Boot Camp, which I am a member, an active member, gave it to me and said, "Hey, I found this online, and I know you’re doing a lot of Wells Fargo cases. Maybe you can use this."
Reading it, my jaw just dropped. As I see it, it’s clearly outlining procedures, not just for the $12-an-hour robo-signers that we've heard about all these years, but for the lawyers, who need to be held accountable to a much higher degree. It’s the manual for the lawyers to actually fabricate documents, as I see it, and request that documents that are lacking be fabricated by Wells Fargo.
[end excerpt]
---
2014-06-29 posted by Indyradio to [https://facebook.com/IndyRadio]:
Having gained impunity for the money laundering of their new investment division, Wachovia, Wells Fargo entered in to the national foreclosure settlement agreement. One week later an internal memo bragged about an automated process for (a new round of) foreclosures, even when the original contracts have been lost. the manual for creating false foreclosure documents was still being printed one week after they signed the settlement. [http://www.scribd.com/doc/213340455/3-Wells-Fargo-Home-Mortgage-WFHM-Foreclosure-Attorney-Procedure-Manual-Version-1-Basis-of-Terelli-s-Franklin-Litigation-Controversy].
The same DOJ that provided guns to Mexican cartels gave a pass to Wells Fargo in 2010, after Wells bought their money launderer, Wachovia. The Guardian explains the unique arrangement, but at the time we didn't know about "Fast and Furious" [http://www.theguardian.com/world/2011/apr/03/us-bank-mexico-drug-gangs].
We know the Washington Post has the Wells Fargo manual for creating fake foreclosures, but Wells Fargo has recently hired some hacks to go after Indymedia for sharing it [https://www.indybay.org/newsitems/2014/06/28/18758001.php].
"How to Fabricate Evidence: Wells Fargo’s Foreclosure Manual Confirms the Worst"
2014-03-15 from "The Florida Foreclosure Fraud Weblog" [floridaforeclosurefraud.com/2014/03/how-to-fabricate-evidence-wells-fargos-foreclosure-manual-confirms-the-worst/]:
If there was any doubt in your mind that banks have been forging evidence [http://floridaforeclosurefraud.com/category/fake-documents/], put it to rest. According to the New York Post [http://nypost.com/2014/03/12/wells-fargo-made-up-on-demand-foreclosure-papers-plan-court-filing-charges/], an internal Wells Fargo manual has now leaked confirming the exact procedures Wells and its attorneys use to fabricate evidence in foreclosure cases—down to the computer codes they use to order production of falsified documents.
The manual itself is now spreading like wildfire, and I’ve got a copy of it here. [PDF] [http://floridaforeclosurefraud.com/wp-content/uploads/2014/03/Wells_Fargo_Attorney_foreclosure_attorney_procedure_manual_20120224.pdf]
The 150-plus-page document describes how Wells Fargo expects its attorneys to prepare and handle files in foreclosure cases. When Wells begins a foreclosure case, page 14 tells us what is supposed to happen:
"Documents include the original note, recorded mortgage, title policy, and recorded and unrecorded assignments. Documents are sent to imaging so that at the time of referral they can be uploaded via VendorScape or Desktop to the Foreclosure Attorney."
In other words, the attorney should have a complete copy of the original note, as it exists at the time the foreclosure begins, before filing the foreclosure lawsuit. But not all cases go so smoothly. Sometimes the original note is missing. Sometimes the original note lacks an endorsement—the signature or stamp, like the signature on the back of a check, that transfers the note from one party to another. Sometimes the lawyers need to create an “allonge” to add a missing endorsement. Wells Fargo has a policy and procedure for each of these cases, and that’s where the trouble starts.
Robo-Signing Lost Note Affidavits -
The real meat begins on page 15. What happens if the original note never makes it to the attorney? They communicate that fact back to Wells Fargo through the “VendorScape” or “Desktop” system—basically, a fancy kind of instant-message and tracking system between the lawyers and their supposed clients:
"Attorney: If after the third business day of the referral date you have not received the note, add log code NOTRRP in VendorScape or add the Note Not Received in Referral Package Issue in Desktop. This can be done by selecting Issues from the Tool Menu and selecting Add Issue."
Wells Fargo’s document team then swings into action:
"WFHM Default Docs Team: Research missing note:
• If note is found: complete the K64 step with the actual date the note was provided/sent to the Attorney. If the state does not require the original note, the document will be uploaded to LIV. Otherwise, send the note via mail and track for delivery.
• If note is not found: complete the K64 step, delete the N82 step, and add step N83, LOST NOTE AFFIDAVIT NEEDED. Only the Default Doc Team should be adding the N83 step to FOR3."
Wait: shouldn’t they know if they have the original note before they begin foreclosure proceedings? (Hush friend, that’s just a technicality.)
But again, there’s more paperwork to be done. The attorney prepares a form affidavit, and then send it to Wells Fargo for signature. And then someone at Wells Fargo just signs the affidavit:
"Attorney: Once the N83 step is placed on the loan, this will authorize your office to create and forward a lost note affidavit as described in the Lost Note Affidavits (LNA) process in this manual.
WFHM Default Docs Team: Once you receive, execute, and return the LNA to the Attorney, close the N83 step."
By the way, did you catch what doesn’t happen in this loop? At After the attorney prepares the cookie-cutter affidavit using this form, Wells Fargo just signs it without making any investigation into whether the affidavit correctly states the facts of how the note was supposedly lost or what search for the note was done. In other words, more robo-signing. Haven’t we been here before?
Manufactured Endorsements -
So what happens when the attorney gets the original note, but it doesn’t have an endorsement on it, the mark that legally transfers the note to the foreclosing bank? That’s when, on page 17, things really get dicey:
"Note Endorsement **Please Note** This process is only to be used if your office has already received the note. If you have not received the note, follow process for requesting the note listed in the Missing Note Process section of this manual."
That last part is important—this process can only be used when the attorneys already have the original in their custody. Remember that.
"Attorney: Enter step Z02 (Endorsed Note Needed) to the FOR3 screen (if a loan is in foreclosure) or the BNK3 screen (if a loan is in Bankruptcy).
WFHM Default Docs Team: Research needed endorsement.
If the blank endorsement is in the file for an original state [a state that requires filing the original note in a foreclosure proceeding, like Florida], execute the endorsement, send the original document to the attorney, and complete the Z02 step."
So once the attorney has the original note, if it’s missing an endorsement, Wells Fargo employees “execute the endorsement” and then send it to the attorney—who already has the original note. This means that they aren’t applying the endorsement to the note itself, but to a separate document which the attorney must apparently attach to the note later. This is legally insufficient to transfer the note, and creates a huge legal problem for every Wells Fargo foreclosure in Florida and other “original document” states. (For more on why this is a problem, the ambitious reader may want to take a look at Adams v. Madison Realty & Development, Inc., 853 F.2d 163, 164 (3d Cir.1988) [http://scholar.google.com/scholar_case?case=15952441306028509721&hl=en&as_sdt=40006].)
Fortunately for borrowers, Wells Fargo will completely track this sequence of events in Desktop, on the FOR2 and FOR3 screens. A skilled attorney can obtain and decipher these documents, by paying particular attention for Z02 codes.
Fabricating Allonges -
Wells Fargo fabricates allonges in very nearly the same way. (What is an allonge? The Adams case explains, but so do Florida cases Booker [link], Isaac [link], and Bohatka [http://scholar.google.com/scholar_case?case=5199606611838758210]: “An allonge is “a piece of paper annexed to a negotiable instrument or promissory note, on which to write endorsements for which there is no room on the instrument itself. Such must be so firmly affixed thereto as to become a part thereof.” Some people joke that “allonge” is simply a French word meaning “fraud.”)
Because the allonge is the piece of paper the endorsement is applied to, it has to be attached to the note at the time the endorsement is made. (Again, see Adams.) If not, it fails to transfer the note. So what happens in Wells Fargo’s world?
"Attorney: If an allonge is still needed after a note has been endorsed, forward the allonge attachment to Wells Fargo Default Docs area via email address Defaultallongemailbox@wellsfargo.com and add step Y44, ATTORNEY REQUESTED ALLONGE, to FOR3."
So what happens if the attorney needs an allonge but still has the original note? No problem! (Actually, big problem.) Wells just executes the allonge and then sends it back to the attorney who then attaches it to the note later.
"WFHM Default Docs Team: If property is located in an original doc state and attorney has the original note, review the allonge attachment to determine if we have signing authority to execute internally.
• If WFHM does have signing authority, enter log code FCALGI (ALLONGE SENT FOR INTERNAL SIGNATURE)
• If WFHM does not have signing authority, enter log code FCALGE (ALLONGE SENT OUT FOR EXECUTION) and mail document for 3rd party signature.
• After allonge has been executed, enter log code FCALGA (ALLONGE COMPLETED/RETURNED TO ATTORNEY).
• Complete the Y44 actual date with the date allonge was returned to attorney."
This, simply put, means it is the policy and practice of Wells Fargo to manufacture evidence of standing. The good news for borrowers: a skilled attorney can review the FOR2 and FOR3 screens, and look at the dates of the N82 (NOTE SENT TO ATTY) and the Y44 (ALLONGE COMPLETED/RETURNED TO ATTORNEY) codes. That will tell the whole story.
What To Do If Wells Fargo Sues You -
You can tell if you get sued by Wells Fargo. They will either be named as the plaintiff, or the complaint will be verified by a Wells Fargo employee. So if you get a lawsuit with Wells Fargo’s filthy fingerprints all over it, find someone who knows how to obtain and read Wells Fargo’s records—the very records that will expose the fraud. Give us a call at (888) 830-0830 or contact us online for an appointment.
"Allonge is a French word for fraud" posted 2014-03-10 by by Florida Foreclosure Lawyer Michael Wasylik to [http://www.youtube.com/watch?v=sb5Zy9wsvWM]:
Why the appearance of an "allonge" in your foreclosure is a red flag for fraud—Florida foreclosure defense lawyer Michael Alex Wasylik explains.
Have foreclosure questions? Call us at 352-567-3173 and don't forget to download our FREE 30-page Consumer Guide to Defending Florida Foreclosures: [http://ricardolaw.com/guide]
Notice in the following article, the Department of Justice says "Finding hard evidence has proved difficult". They are proven Liars.
---
"Special report: The watchdogs that didn't bark"2011-12-22 by Scot Paltrow, edited by Michael Williams and Chris Kaufman
[http://www.reuters.com/article/2011/12/22/us-usa-foreclosure-idUSTRE7BL0M020111222]
(Reuters) - Four years after the banking system nearly collapsed from reckless mortgage lending, federal prosecutors have stayed on the sidelines, even as judges around the country are pointing fingers at possible wrongdoing.
The federal government, as has been widely noted, has pressed few criminal cases against major lenders or senior executives for the events that led to the meltdown of 2007. Finding hard evidence has proved difficult, the Justice Department has said.
The government also hasn't brought any prosecutions for dubious foreclosure practices deployed since 2007 by big banks and other mortgage-servicing companies.
But this part of the financial system, a Reuters examination shows, is filled with potential leads:
Foreclosure-related case files in just one New York federal bankruptcy court, for example, hold at least a dozen mortgage documents known as promissory notes bearing evidence of recently forged signatures and illegal alterations, according to a judge's rulings and records reviewed by Reuters. Similarly altered notes have appeared in courts around the country.
Banks in the past two years have foreclosed on the houses of thousands of active-duty U.S. soldiers who are legally eligible to have foreclosures halted. Refusing to grant foreclosure stays is a misdemeanor under federal law.
The U.S. Treasury confirmed in November that it is conducting a civil investigation of 4,500 such foreclosures. Attorneys representing service members estimate banks have foreclosed on up to 30,000 military personnel in potential violation of the law.
In Alabama, a federal bankruptcy judge ruled last month that Wells Fargo & Co. had filed at least 630 sworn affidavits containing false "facts," including claims that homeowners were in arrears for amounts not yet due.
Wells Fargo "took the law into its own hands" and disregarded laws banning perjury, Judge Margaret A. Mahoney declared.
And in thousands of cases, documents required to transfer ownership of mortgages have been falsified. Lacking originals needed to foreclose, mortgage servicers drew up new ones, falsely signed by their own staff as employees of the original lenders - many of which no longer exist.
But the mortgage-foreclosure mess has yet to yield any federal prosecution against the big banks that are the major servicers of home loans.
UNPRECEDENTED FRAUD -
Reuters has identified one pending federal criminal investigation into suspected improper foreclosure procedures. That inquiry has been under way since 2009.
The investigation focuses on a defunct subsidiary of Jacksonville, Florida-based Lender Processing Services, the nation's largest subcontractor of mortgage servicing duties for banks.
People close to the investigation said indictments may come as early as the end of this month. Nationwide press reports had showed photos of what appeared to be obviously forged signatures on foreclosure affidavits.
The Justice Department doesn't disclose pending investigations, making it impossible to say if other criminal inquiries are underway. Officials in state attorneys' general offices and lawyers in foreclosure cases say they have seen no signs of any other federal criminal investigation.
"I think it's difficult to find a fraud of this size on the U.S. court system in U.S. history," said Raymond Brescia, a visiting professor at Yale Law School who has written articles analyzing the role of courts in the financial crisis. "I can't think of one where you have literally tens of thousands of fraudulent documents filed in tens of thousands of cases."
Spokesmen for the five largest servicers - Bank of America Corp., Wells Fargo & Co., JP Morgan Chase & Co, Citigroup Inc., and Ally Financial Group - declined to comment about the possibility of widespread fraud for this article.
Paul Leonard, spokesman for the Housing Policy Council, whose membership includes those banks, said any faults in foreclosure cases are being addressed under a civil settlement earlier this year with federal regulators.
FALSE STATEMENTS -
Justice Department and Federal Bureau of Investigation officials say they have brought mortgage-fraud criminal cases through their "Operation Stolen Dreams." None, however, were against big banks. All targeted small-scale operators who allegedly defrauded banks with forged mortgage applications or took advantage of homeowners by falsely promising arrangements to get them out of default and then pocketing their money.
Justice Department spokeswoman Adora Andy declined to comment on the absence of prosecutions for foreclosure practices by big banks. She said in a statement: "The Department of Justice has been and will continue to aggressively investigate financial fraud wherever it occurs, including at all levels of the mortgage industry and, when we find evidence of a crime, we will not hesitate to pursue it."
Some judges have accused banks of falsely stating in court that they are working on loan modifications for homeowners in default.
In a November 30 court hearing, not previously reported, a federal bankruptcy judge in New York accused Bank of America of falsely telling courts and the public that it was working to renegotiate loans.
"Bank of America issues constant press releases about how it is responsive to their borrowers on these issues. They are not, period," said Judge Robert Drain, in a case involving homeowner Richard Tomasulo, a pharmacist from Crompond, New York. Drain said Bank of America had been telling the court since January that it was working to modify Tomasulo's mortgage, but hadn't done so.
"Whoever is in charge of this program and their supervisor, who should be following it, should be fired" because "they are frankly incompetent."
Bank of America spokeswoman Jumana Bauwens said the bank has completed "nearly one million" modifications since 2008. The U.S. Treasury this year suspended loan modification incentive payments to the bank because it was "seriously deficient" in responding to requests for modifications.
CHEATERS AND LIARS -
Foreclosure fraud came to light in September 2010, with evidence that employees of Ally Financial Corp. had committed "robo-signing," in which low-level workers signed and swore to the facts in thousands of affidavits they hadn't read or checked.
The affidavits were notarized outside the signers' presence, in apparent violation of state and federal criminal laws.
Since then, mounting evidence of possible foreclosure fraud has convinced judges and state regulators that servicers have harmed homeowners and the investors who bought mortgage-backed securities.
A unit of the Justice Department that oversees bankruptcy court cases, the U.S. Trustees Program, said in its 2010 annual report that there were "pervasive and longstanding problems regarding mortgage loan servicing," which "are not merely 'technical' but cause real harm to homeowners in bankruptcy."
Banks, the Trustees Program says, have falsified affidavits by claiming homeowners owe fees for services never rendered and by overstating how much owners are behind on payments.
Former federal prosecutor Daniel Richman, a professor of criminal law at Columbia University Law School, says a central question is who prosecutors would target in criminal investigations. Richman said it would be easy but not worthwhile to charge large numbers of rank-and-file workers who, directed by supervisors, falsely churned out affidavits.
He said criminal investigations would be warranted, but harder to bring, "if there are particular individuals who lie at the heart of this conduct in a very significant way."
In October 2010, members of Congress pressed the Justice Department to investigate. Attorney General Eric Holder said investigations were best left to the states, with help from the Justice Department.
The Office of the Comptroller of the Currency, the top bank regulator, quickly negotiated settlements with the 14 largest servicers, requiring changes in practices and "remediation" for harmed homeowners. That settlement allows the banks to choose their own contractors to determine who was harmed and by how much.
Lawmakers and homeowner advocates have criticized the arrangement, contending that it will let the banks avoid making all wronged homeowners whole, because the contractors are paid by and answer to the banks.
Since then, the department's civil division has worked with a shaky coalition of all 50 states, which have been seeking a civil settlement with five banks that are the largest loan servicers. The negotiations center on requiring them to pay $20 billion or more in penalties, only some of which would go to compensate wronged homeowners.
STATES TAKE ACTION -
Federal law enforcement has been noticeably absent, even in areas hardest hit by the crisis, such as Las Vegas.
In 2010 the FBI's Las Vegas office shut down its mortgage fraud task force, which had focused on small-scale swindlers.
Tim Gallagher, chief of the FBI's financial crimes section, said that the Las Vegas office had asked to transfer agents to other duties.
Impatient with the lack of federal prosecution, states including New York, Massachusetts, Delaware and California have launched their own investigations of the banks.
In November, it became the first state to file criminal charges. The state attorney general obtained a 606-count indictment against two California-based executives of Lender Processing Services.
It accuses the executives of paying Nevada notaries to forge the pair's signatures and falsely notarize them on notices of default, documents Nevada requires in foreclosure actions. State officials said more indictments are expected.
In an interview, John Kelleher, Nevada's chief deputy attorney general, said the investigation began in response to citizen complaints.
"We were concerned and then shocked at the sheer number of fraudulent documents we were finding that had been filed with the county recorder," Kelleher said.
Investigators found "tens of thousands" of false records filed on behalf of big mortgage servicers, he said.
The two executives have pleaded not guilty. In a press release, the company said: "LPS acknowledges the signing procedures on some of these documents were flawed; however, the company also believes these documents were properly authorized and their recording did not result in a wrongful foreclosure."
BACK HOME IN NEW YORK -
The U.S. Attorney's Office in Manhattan is the federal prosecutors' office that traditionally has filed the most cases against top banks and financiers. But it hasn't brought any foreclosure-related criminal cases involving Wall Street's biggest financial houses or the law firms that represent them.
To date the only step it has taken publicly was an October 2011 civil settlement with New York State's largest foreclosure law firm.
The Steven J. Baum P.C. law firm, based near Buffalo, New York, in recent years filed approximately 40 per cent of all foreclosures in New York State, on behalf of banks and other mortgage servicers. Court records show that the firm angered state court judges for alleged false statements and filing suspect documents.
Arthur Schack, a state court judge in Brooklyn, in a 2010 ruling said that pleadings by the Baum firm on behalf of HSBC Bank, a unit of London-based HSBC Holdings, in a foreclosure case were "so incredible, outrageous, ludicrous and disingenuous that they should have been authorized by the late Rod Serling, creator of the famous science-fiction television series, The Twilight Zone."
Another state judge that year imposed $5,000 in sanctions and ordered the firm to pay $14,500 in attorneys' fees, ruling that "misrepresentation of the material statements here was outrageous."
But the U.S. Attorney's office in Manhattan filed no criminal charges against the Baum firm. Instead, it signed a settlement with Baum ending an inquiry "relating to foreclosure practices." The agreement made no allegations of wrongdoing, but required the firm to improve its foreclosure practices.
Baum agreed to pay a $2 million civil penalty, but didn't admit wrongdoing.
The law firm said it would shut down after New York Times columnist Joe Nocera in November published photographs of a 2010 Baum firm Halloween party in which employees dressed up as homeless people. Another showed part of Baum's office decorated to look like a row of foreclosed houses.
"The settlement between the Manhattan U.S. Attorney's Office and the Steven J. Baum Law Firm resulted in immediate and comprehensive reforms of the firm's business practices," said Ellen Davis, spokeswoman for the Manhattan U.S. Attorney's office.
Earl Wells III, a spokesman for Baum, said the lawyer wouldn't comment because "he's laying low right now."
An HSBC spokesman said: "We are working closely with the regulators to address any matters raised regarding" the bank's foreclosure practices.
BROKEN PROMISES -
The most serious potential foreclosure violations involve falsified mortgage promissory notes, the documents homeowners sign vowing to repay mortgage loans. Courts uniformly have ruled that unless a creditor legally owns the promissory note, it has no legal right to foreclose. For each mortgage there is only one promissory note.
Bankruptcy court records reviewed by Reuters show that at least a dozen radically different documents purporting to be the authentic promissory note have turned up in foreclosure cases involving six different properties in the federal bankruptcy court for the Southern District of New York.
In one, Wells Fargo is battling to foreclose on the Bronx home of Tindala Mims, a single mother who works as an ambulance driver. In September 2010, Wells Fargo filed a promissory note bearing a signed stamp showing that the note belonged to defunct Washington Mutual Bank, not Wells Fargo. The judge threw out the case.
In a second attempt, the court was given a different version of the note. But inspection showed physical alterations. A variety of marks on the original were missing or seemed obviously altered on the second. And the second version had a stamped endorsement, missing on the first, that appeared to give Wells Fargo the right to foreclose.
The judge threw out the second attempt too. Wells Fargo is trying a third time. It declined to comment on the case.
Linda Tirelli, Mims' lawyer, in October sued Wells Fargo, alleging "fabrication of documents."
"It seems to me that Washington is deathly afraid of the banking industry," Tirelli said. "If you're talking about filing false documents and filing false notarizations, do you really think that the U.S. Attorney would find it too difficult to prosecute?"
The office of Attorney Preet Bharara in Manhattan has routinely brought charges involving forgery and filing false documents against smaller targets.
In April, the FBI arrested seven employees of the USA Beauty School in Manhattan. Bharara's office alleged that the seven suspects had forged documents such as high school diplomas, attendance records and applications for financial aid for students taking cosmetology classes.
In August, Bharara's office filed felony charges against a sports-memorabilia company's CEO, accusing him of auctioning jerseys falsely advertised as "game used" by Major League Baseball players.
In a press conference, a U.S. Postal Inspection Service official said prosecution was important because "victims felt that they had a piece of history only to be defrauded and left with a feeling of heartbreak."
Given the record of Bharara's office, and those of his fellow U.S. Attorneys around the country, to aggressively pursue violations both big and small, the absence of cases involving the foreclosure fiasco seems to stand out.
"Why there hasn't been more robust prosecution is a mystery," said Brescia, the visiting professor at Yale.
Tuesday, March 18, 2014
Berkeley public housing tenants speak out about billionaire takeover
An earlier version of this story is "Billionaires take control of Berkeley's public housing" [link], published 2014-03-15.
2014-03-18 by Lynda Carson [tenantsrule@yahoo.com], posted to [https://www.indybay.org/newsitems/2014/03/18/18752786.php]:
Berkeley - A March 13, 2014, memorandum from the Berkeley Housing Authority (BHA) announced that the disposition project to privatize and dispose of Berkeley's 75 public housing town homes closed as recent as Friday, February 14, 2014. According to the BHA, a February 11, 2014, notice was sent out to all current public housing residents advising them of the transfer of ownership of their public housing housing units to a private entity.
Meanwhile, current and former Berkeley public housing tenants are speaking up and shedding a little bit of light on what has been happening at Berkeley's 75 public housing units once the decision was made to privatize and sell their public housing units to out-of-state billionaires Jorge M. Perez and Stephen M. Ross, of The Related Companies.
Contrary to the claim by the BHA that a notice was sent out on February 11, to notify Berkeley's public housing tenants that their homes have been sold to some out-of-state billionaires, it appears that not all of the public housing tenants have been properly notified about the takeover of their housing.
Kenya Johnson and Francesca Barnett have spent a number of years living at a public housing unit on Russell St., in Berkeley. On Tuesday March 18, Francesca Barnett said, " Where we live there is a duplex and a house located at this property. All three units are still fully occupied with public housing tenants. I live in a two bedroom unit with my room mate Kenya. There is nothing that I can say about our building being sold. Far as I know we have not received a notice yet telling us that our home has been sold. In fact, around two weeks ago someone came by and told us that our building has not been sold. I have lived here around a year, and my room mate has lived here for around four years or more. I definitely am under the impression that my home was not sold yet, and that we are still public housing tenants. I am surprised to hear that our housing has been sold if that is the case. We were told that depending on who buys the property, that it will be the deciding factor on what will happen to us. We were advised that we may receive a 30 Day Notice, or a 60 Day Notice telling us that we may have to move somewhere else, when the building is sold. But it depends on who will buy our housing. They do not allow us to have a say in regards to what happens to our public housing."
The February 11, 2014, notice to some of Berkeley's public housing tenants from the BHA tells them that their 75 public housing units have been sold to the new ownership entity, Berkeley 75, LP, effective February 14, 2014. Additionally, the notice tells the tenants that Berkeley 75, LP, will be their new landlord, and that the BHA will no longer have any involvement in their tenancy. The tenants were advised that beginning February 14th and continuing through the end of the rehabilitation of their housing units that they can use Section 8 vouchers to move if they decide to do so. A phone number or address was not listed on the notice to the tenants in regards to how they can contact the new owners of their 75 privatized housing units.
Out-of-state billionaires Jorge M. Perez and Stephen M. Ross of The Related Companies took control of Berkeley's 75 public housing units on February 14, in a complicated deal that edged out local nonprofit housing developers. Many of Berkeley's low-income families have become displaced as a direct result of the sell out of Berkeley's 75 public housing units that originally were supposed to remain as public housing units in perpetuity, when they were built with taxpayer funding.
Former public housing tenant Terry Pete said, "I was pressured out of my public housing around a year ago after living in Berkeley's public housing for much of my life. I was pressured out of my housing and have been made homeless. I had to move in with some of my relatives to avoid living on the streets. I was not given a Section 8 housing voucher and moved because the stress was so horrible living at the public housing project once they started to pressure tenants out of their public housing units. The stress caused major health problems for me. Many others were pressured out of their housing also, and someone needs to look in to what has happened to us."
For background of the new owners of Berkeley's privatized public housing units, in 2010 it was reported that Jorge M. Perez owned 75% of The Related Companies, and that billionaire Stephen M. Ross a 95% owner of the Miami Dolphins football franchise, owned 25% of the multi-billion dollar development company.
After the billionaires targeted Berkeley's 75 public housing town-homes for privatization, during September, 2011, the Berkeley Housing Authority (BHA) announced that it had entered into an exclusive negotiating rights agreement with The Related Companies of California, LLC, that would last 90 days, with a possible 30 day extension to negotiate the full terms of the deal.
With political connections directly to the White House, Jorge M. Perez a co-founder of The Related Companies has been a major political fundraiser for President Barack Obama, Hillary Rodham Clinton, and was an advisor to ex-President Bill Clinton during his term in office.
In recent years Perez and Ross have also been involved in a major project to privatize many of Oakland's public housing units in a partnership with the Oakland Housing Authority (OHA), and the East Bay Asian Local Development Corporation (EBALDC), a so-called nonprofit housing developer. As a direct result of the partnership, during recent years the Oakland Coliseum Gardens public housing units were demolished, 178 low-income families were displaced from their homes, and the new rehabilitated project is now called Lion Creek Crossings at the former 22 acre site.
To give you an idea about the way EBALDC feels contempt for low-income public housing tenants, on the EBALDC website they currently refer to the old Coliseum Gardens public housing complex as the notorious 1964 OHA public housing development, when describing how nice the newer Lion Creek Crossings privatized rental housing project is. However, the website fails to mention that a 15 year old girl was shot and killed during late December of 2012 at Lion Creek Crossings along with a 14 year old boy who was also shot during that same incident, and that 15 year-old Hadari Askari was gunned down at the same housing complex on July 10, 2012.
Elsie Smith was another public housing tenant in Berkeley, and said, "I was a public housing tenant for fourteen years and moved out of there around two years ago when they offered me a Section 8 housing choice voucher and told me that they wanted to sell my housing. They put a lot of pressure on us to get out of there. I am lucky, because things turned out alright for me. However, it did not turn out so well for others that did not want to move out of their long time public housing."
Eleanor Walden a former Berkeley Rent Board Commissioner said, "I have heard of problems with elderly people being given a notice of two days to get out of their housing lately. Berkeley used to be a moral island that was better than many other places, but now it is no better than cities in Mississippi. We put people on the streets, and there is no morality here any more. We sit back and wait for the axe to fall, and fear that our lives will be eroded and demeaned by people that throw a lot of money around, and displace us in the process. I am horrified by what is going on and do not know what we can do about it. It is inhumane and it is a bad situation for the poor in Berkeley at this point. It is an injustice to the low-income families in Berkeley who face displacement because their public housing has been sold to some billionaires."
Payments Now Being Made To Billionaires -
According to released documents rents have been collected from Berkeley's former public housing tenants with an appropriate proration forwarded to Berkeley 75, LP, the new ownership entity. The BHA also delivered the first list of potential renters on February 20, to Berkeley 75, LP, for the newly privatized federal subsidized project-based units.
In addition, Berkeley 75, LP, is currently screening the first group of applicants for suitability as tenants at the eventually to-be rehabilitated 75 town homes. The potential tenants face a stiff double examination before being allowed entry into the former public housing units as new tenants, and have to be cleared by both Related and the BHA before moving into the privatized housing units.
The incorporation papers for Berkeley 75 Housing Partners, LP, were filed in Sacramento on 4/13/2012, and the entity address is located at 18201 Von Karman Avenue, Suite 900, Irvine California.
Once the privatized units are rehabilitated, inspected, and the new tenants are chosen with new contracts signed, the BHA will start earning as little as $75 per month, per unit in administration fees from the privatized public housing units sold to the out-of-state billionaires.
For additional information, Jorge M. Perez one of the billionaire owners of the recently privatized Berkeley public housing units, is known as the "Condo King" of Miami, Florida, because he has developed and owns so many condominiums in that region through The Related Companies/Related Group. He is also known as a billionaire Cuban American real estate developer.
Perez is also the majority owner of The Related Companies, which is also the parent company of The Related Companies of California, LLC, another wealthy housing development corporation.
Billionaires Made Out Like Some Fat Rats In Public Housing Takeover -
Public records reveal that the out-of-state billionaires got a sweet deal for their efforts to grab Berkeley's public housing units from the poor. It cost The Related Company around $35 million to buy Berkeley's 75 public housing units, at a cost that works out to be around $99 per square foot, even though the median price of housing in Berkeley is currently going for around $454 per square foot.
Public records also reveal that the City of Berkeley loaned the Related Companies of California $400,000 in predevelopment costs to fund some of the costs associated with the disposition and rehabilitation of Berkeley's 75 public housing town homes from the Berkeley Housing Authority. However, the $400,000 loan was later converted to a grant that left the taxpayers holding the bag, and made the taxpayers responsible to pay off the loan.
Payments To Consultants To Privatize Berkeley's 75 Public Housing Units -
On March 13, 2014, the BHA Commissioners also voted to pay an additional $23,241 in consultant fees to EJP/Praxis Consultants, even though the deal is done and the public housing units have already been sold. And it also appears that during the past three years the BHA payed EJP/Praxis consultants as much as $98,711 in total for their assistance in privatizing Berkeley's 75 public housing units, and selling them to out-of-state billionaires Jorge M. Perez and Stephen M. Ross, of The Related Companies. The original cost was expected to be as little as around $37,000 for consulting fees to EJP/Praxis before the costs shot up to around $100,000.
Additionally, documents reveal that on May 12, 2011, the BHA Commissioners voted to pay Overland, Pacific and Cutler an amount of $147,000 to relocate the tenants from their public housing units, and these amounts do not reflect the full costs of legal expenses and other costs associated with privatizing Berkeley's 75 public housing units.
Documented Sequestration Budget Cuts To Federal Housing Programs And Section 8 Vouchers -
Despite the sale of Berkeley's 75 public housing units to some out-of-state billionaires, budget cuts to HUD's federal housing programs may eventually result in higher rents for the new tenants moving in to the privatized former public housing units in Berkeley.
A 224 page Government Accountability Office (GAO) report released during early March 2014, reveals that the massive sequestration across-the-board budget cuts have savaged our nation's federal subsidized housing programs, including the Section 8 housing choice voucher program.
In total, according to the GAO report the Department of Housing and Urban Development (HUD) estimates that due to sequestration funding cuts Public Housing Authorities provided rental assistance payments to 42,000 fewer low-income households during 2013, compared to Fiscal Year 2012. HUD also estimates that sequestration funding cuts to Homeless Assistance Grants will lead to states and localities removing as many as 60,000 formerly homeless persons from housing and emergency shelter programs all across the nation, placing them at risk of ending up back onto the cold hearted streets of America.
Additionally, sequestration reduced funding for HUD's project-based housing assistance program, through which HUD makes payments to owners of multifamily rental housing units on behalf of around 1.2 million low and very low-income families. Available funding to renew contracts for this program decreased from $9 billion to $8.6 billion.
No one could be reached at the Berkeley Housing Authority for comment at the time this story was published.
2014-03-18 by Lynda Carson [tenantsrule@yahoo.com], posted to [https://www.indybay.org/newsitems/2014/03/18/18752786.php]:
Berkeley - A March 13, 2014, memorandum from the Berkeley Housing Authority (BHA) announced that the disposition project to privatize and dispose of Berkeley's 75 public housing town homes closed as recent as Friday, February 14, 2014. According to the BHA, a February 11, 2014, notice was sent out to all current public housing residents advising them of the transfer of ownership of their public housing housing units to a private entity.
Meanwhile, current and former Berkeley public housing tenants are speaking up and shedding a little bit of light on what has been happening at Berkeley's 75 public housing units once the decision was made to privatize and sell their public housing units to out-of-state billionaires Jorge M. Perez and Stephen M. Ross, of The Related Companies.
Contrary to the claim by the BHA that a notice was sent out on February 11, to notify Berkeley's public housing tenants that their homes have been sold to some out-of-state billionaires, it appears that not all of the public housing tenants have been properly notified about the takeover of their housing.
Kenya Johnson and Francesca Barnett have spent a number of years living at a public housing unit on Russell St., in Berkeley. On Tuesday March 18, Francesca Barnett said, " Where we live there is a duplex and a house located at this property. All three units are still fully occupied with public housing tenants. I live in a two bedroom unit with my room mate Kenya. There is nothing that I can say about our building being sold. Far as I know we have not received a notice yet telling us that our home has been sold. In fact, around two weeks ago someone came by and told us that our building has not been sold. I have lived here around a year, and my room mate has lived here for around four years or more. I definitely am under the impression that my home was not sold yet, and that we are still public housing tenants. I am surprised to hear that our housing has been sold if that is the case. We were told that depending on who buys the property, that it will be the deciding factor on what will happen to us. We were advised that we may receive a 30 Day Notice, or a 60 Day Notice telling us that we may have to move somewhere else, when the building is sold. But it depends on who will buy our housing. They do not allow us to have a say in regards to what happens to our public housing."
The February 11, 2014, notice to some of Berkeley's public housing tenants from the BHA tells them that their 75 public housing units have been sold to the new ownership entity, Berkeley 75, LP, effective February 14, 2014. Additionally, the notice tells the tenants that Berkeley 75, LP, will be their new landlord, and that the BHA will no longer have any involvement in their tenancy. The tenants were advised that beginning February 14th and continuing through the end of the rehabilitation of their housing units that they can use Section 8 vouchers to move if they decide to do so. A phone number or address was not listed on the notice to the tenants in regards to how they can contact the new owners of their 75 privatized housing units.
Out-of-state billionaires Jorge M. Perez and Stephen M. Ross of The Related Companies took control of Berkeley's 75 public housing units on February 14, in a complicated deal that edged out local nonprofit housing developers. Many of Berkeley's low-income families have become displaced as a direct result of the sell out of Berkeley's 75 public housing units that originally were supposed to remain as public housing units in perpetuity, when they were built with taxpayer funding.
Former public housing tenant Terry Pete said, "I was pressured out of my public housing around a year ago after living in Berkeley's public housing for much of my life. I was pressured out of my housing and have been made homeless. I had to move in with some of my relatives to avoid living on the streets. I was not given a Section 8 housing voucher and moved because the stress was so horrible living at the public housing project once they started to pressure tenants out of their public housing units. The stress caused major health problems for me. Many others were pressured out of their housing also, and someone needs to look in to what has happened to us."
For background of the new owners of Berkeley's privatized public housing units, in 2010 it was reported that Jorge M. Perez owned 75% of The Related Companies, and that billionaire Stephen M. Ross a 95% owner of the Miami Dolphins football franchise, owned 25% of the multi-billion dollar development company.
After the billionaires targeted Berkeley's 75 public housing town-homes for privatization, during September, 2011, the Berkeley Housing Authority (BHA) announced that it had entered into an exclusive negotiating rights agreement with The Related Companies of California, LLC, that would last 90 days, with a possible 30 day extension to negotiate the full terms of the deal.
With political connections directly to the White House, Jorge M. Perez a co-founder of The Related Companies has been a major political fundraiser for President Barack Obama, Hillary Rodham Clinton, and was an advisor to ex-President Bill Clinton during his term in office.
In recent years Perez and Ross have also been involved in a major project to privatize many of Oakland's public housing units in a partnership with the Oakland Housing Authority (OHA), and the East Bay Asian Local Development Corporation (EBALDC), a so-called nonprofit housing developer. As a direct result of the partnership, during recent years the Oakland Coliseum Gardens public housing units were demolished, 178 low-income families were displaced from their homes, and the new rehabilitated project is now called Lion Creek Crossings at the former 22 acre site.
To give you an idea about the way EBALDC feels contempt for low-income public housing tenants, on the EBALDC website they currently refer to the old Coliseum Gardens public housing complex as the notorious 1964 OHA public housing development, when describing how nice the newer Lion Creek Crossings privatized rental housing project is. However, the website fails to mention that a 15 year old girl was shot and killed during late December of 2012 at Lion Creek Crossings along with a 14 year old boy who was also shot during that same incident, and that 15 year-old Hadari Askari was gunned down at the same housing complex on July 10, 2012.
Elsie Smith was another public housing tenant in Berkeley, and said, "I was a public housing tenant for fourteen years and moved out of there around two years ago when they offered me a Section 8 housing choice voucher and told me that they wanted to sell my housing. They put a lot of pressure on us to get out of there. I am lucky, because things turned out alright for me. However, it did not turn out so well for others that did not want to move out of their long time public housing."
Eleanor Walden a former Berkeley Rent Board Commissioner said, "I have heard of problems with elderly people being given a notice of two days to get out of their housing lately. Berkeley used to be a moral island that was better than many other places, but now it is no better than cities in Mississippi. We put people on the streets, and there is no morality here any more. We sit back and wait for the axe to fall, and fear that our lives will be eroded and demeaned by people that throw a lot of money around, and displace us in the process. I am horrified by what is going on and do not know what we can do about it. It is inhumane and it is a bad situation for the poor in Berkeley at this point. It is an injustice to the low-income families in Berkeley who face displacement because their public housing has been sold to some billionaires."
Payments Now Being Made To Billionaires -
According to released documents rents have been collected from Berkeley's former public housing tenants with an appropriate proration forwarded to Berkeley 75, LP, the new ownership entity. The BHA also delivered the first list of potential renters on February 20, to Berkeley 75, LP, for the newly privatized federal subsidized project-based units.
In addition, Berkeley 75, LP, is currently screening the first group of applicants for suitability as tenants at the eventually to-be rehabilitated 75 town homes. The potential tenants face a stiff double examination before being allowed entry into the former public housing units as new tenants, and have to be cleared by both Related and the BHA before moving into the privatized housing units.
The incorporation papers for Berkeley 75 Housing Partners, LP, were filed in Sacramento on 4/13/2012, and the entity address is located at 18201 Von Karman Avenue, Suite 900, Irvine California.
Once the privatized units are rehabilitated, inspected, and the new tenants are chosen with new contracts signed, the BHA will start earning as little as $75 per month, per unit in administration fees from the privatized public housing units sold to the out-of-state billionaires.
For additional information, Jorge M. Perez one of the billionaire owners of the recently privatized Berkeley public housing units, is known as the "Condo King" of Miami, Florida, because he has developed and owns so many condominiums in that region through The Related Companies/Related Group. He is also known as a billionaire Cuban American real estate developer.
Perez is also the majority owner of The Related Companies, which is also the parent company of The Related Companies of California, LLC, another wealthy housing development corporation.
Billionaires Made Out Like Some Fat Rats In Public Housing Takeover -
Public records reveal that the out-of-state billionaires got a sweet deal for their efforts to grab Berkeley's public housing units from the poor. It cost The Related Company around $35 million to buy Berkeley's 75 public housing units, at a cost that works out to be around $99 per square foot, even though the median price of housing in Berkeley is currently going for around $454 per square foot.
Public records also reveal that the City of Berkeley loaned the Related Companies of California $400,000 in predevelopment costs to fund some of the costs associated with the disposition and rehabilitation of Berkeley's 75 public housing town homes from the Berkeley Housing Authority. However, the $400,000 loan was later converted to a grant that left the taxpayers holding the bag, and made the taxpayers responsible to pay off the loan.
Payments To Consultants To Privatize Berkeley's 75 Public Housing Units -
On March 13, 2014, the BHA Commissioners also voted to pay an additional $23,241 in consultant fees to EJP/Praxis Consultants, even though the deal is done and the public housing units have already been sold. And it also appears that during the past three years the BHA payed EJP/Praxis consultants as much as $98,711 in total for their assistance in privatizing Berkeley's 75 public housing units, and selling them to out-of-state billionaires Jorge M. Perez and Stephen M. Ross, of The Related Companies. The original cost was expected to be as little as around $37,000 for consulting fees to EJP/Praxis before the costs shot up to around $100,000.
Additionally, documents reveal that on May 12, 2011, the BHA Commissioners voted to pay Overland, Pacific and Cutler an amount of $147,000 to relocate the tenants from their public housing units, and these amounts do not reflect the full costs of legal expenses and other costs associated with privatizing Berkeley's 75 public housing units.
Documented Sequestration Budget Cuts To Federal Housing Programs And Section 8 Vouchers -
Despite the sale of Berkeley's 75 public housing units to some out-of-state billionaires, budget cuts to HUD's federal housing programs may eventually result in higher rents for the new tenants moving in to the privatized former public housing units in Berkeley.
A 224 page Government Accountability Office (GAO) report released during early March 2014, reveals that the massive sequestration across-the-board budget cuts have savaged our nation's federal subsidized housing programs, including the Section 8 housing choice voucher program.
In total, according to the GAO report the Department of Housing and Urban Development (HUD) estimates that due to sequestration funding cuts Public Housing Authorities provided rental assistance payments to 42,000 fewer low-income households during 2013, compared to Fiscal Year 2012. HUD also estimates that sequestration funding cuts to Homeless Assistance Grants will lead to states and localities removing as many as 60,000 formerly homeless persons from housing and emergency shelter programs all across the nation, placing them at risk of ending up back onto the cold hearted streets of America.
Additionally, sequestration reduced funding for HUD's project-based housing assistance program, through which HUD makes payments to owners of multifamily rental housing units on behalf of around 1.2 million low and very low-income families. Available funding to renew contracts for this program decreased from $9 billion to $8.6 billion.
No one could be reached at the Berkeley Housing Authority for comment at the time this story was published.
Saturday, March 15, 2014
Billionaires Jorge M. Perez and Stephen M. Ross directing forced removal operations against lower-income citizens in Berkeley, Oakland, elsewhere
"Billionaires take control of Berkeley's public housing"
2014-03-15 by Lynda Carson (tenantsrule [at] yahoo.com):
Berkeley - It's official. A March 13, 2014, memorandum from the Berkeley Housing Authority (BHA) announced that the disposition project to privatize and dispose of Berkeley's 75 public housing town homes closed as recent as Friday, February 14, 2014. A notice was sent out to all current residents advising them of the transfer of ownership.
The February 11, 2014, notice to Berkeley's public housing tenants from the BHA tells them that their 75 public housing units have been sold to the new ownership entity, Berkeley 75, LP, effective February 14, 2014. Additionally, the notice tells the tenants that Berkeley 75, LP, will be their new landlord, and that the BHA will no longer have any involvement in their tenancy. The tenants were advised that beginning February 14th and continuing through the end of the rehabilitation of their housing units that they can use Section 8 vouchers to move if they decide to do so. A phone number or address was not listed on the notice to the tenants in regards to how they can contact the new owners of their 75 privatized housing units.
Out-of-state billionaires Jorge M. Perez and Stephen M. Ross of The Related Companies took control of Berkeley's 75 public housing units on February 14, in a complicated deal that edged out local nonprofit housing developers. Many of Berkeley's low-income families have become displaced as a direct result of the sell out of Berkeley's 75 public housing units that originally were supposed to remain as public housing units into perpetuity, when they were built with taxpayer funding.
For background of the new owners of Berkeley's privatized public housing units, in 2010 it was reported that Jorge M. Perez owned 75% of The Related Companies, and that billionaire Stephen M. Ross a 95% owner of the Miami Dolphins football franchise, owned 25% of the multi-billion dollar development company.
After the billionaires targeted Berkeley's 75 public housing town-homes for privatization, during September, 2011, the Berkeley Housing Authority (BHA) announced that it had entered into an exclusive negotiating rights agreement with The Related Companies of California, LLC, that would last 90 days, with a possible 30 day extension to negotiate the full terms of the deal.
With political connections directly to the White House, Jorge M. Perez, a co-founder of The Related Companies, has been a major political fundraiser for President Barack Obama, Hillary Rodham Clinton, and was an adviser to ex-President Bill Clinton during his term in office.
In recent years Perez and Ross have also been involved in a major project to privatize many of Oakland's public housing units in a partnership with the Oakland Housing Authority (OHA), and the East Bay Asian Local Development Corporation (EBALDC), a so-called nonprofit housing developer. As a direct result of the partnership, during recent years the Oakland Coliseum Gardens public housing units were demolished, 178 low-income families were displaced from their homes, and the new rehabilitated project is now called Lion Creek Crossings at the former 22 acre site.
To give you an idea about the way EBALDC feels contempt for low-income public housing tenants, on the EBALDC website they currently refer to the old Coliseum Gardens public housing complex as the notorious 1964 OHA public housing development, when describing how nice the newer Lion Creek Crossings privatized rental housing project is. However, the website fails to mention that a 15 year old girl was shot and killed during late December of 2012 at Lion Creek Crossings along with a 14 year old boy who was also shot during that same incident, and that 15 year-old Hadari Askari was gunned down at the same housing complex on July 10, 2012.
Payments Now Being Made To Billionaires -
According to released documents rents have been collected from Berkeley's former public housing tenants with an appropriate proration forwarded to Berkeley 75 LP, the new ownership entity. The BHA also delivered the first list of potential renters on February 20, to Berkeley 75 LP, for the newly privatized federal subsidized project-based units.
In addition, Berkeley 75 LP, is currently screening the first group of applicants for suitability as tenants at the eventually to-be rehabilitated 75 town homes. The potential tenants face a stiff double examination before being allowed entry into the former public housing units as new tenants, and have to be cleared by both Related and the BHA before moving into the privatized housing units.
The incorporation papers for Berkeley 75 Housing Partners, LP, were filed in Sacramento on 4/13/2012, and the entity address is located at 18201 Von Karman Avenue, Suite 900, Irvine California.
Once the privatized units are rehabilitated, inspected, and the new tenants are chosen with new contracts signed, the BHA will start earning as little as $75 per month, per unit in administration fees from the privatized public housing units sold to the out-of-state billionaires.
Jorge M. Perez one of the billionaire owners of the recently privatized public housing units, is known as the "Condo King" of Miami, Florida, because he has developed and owns so many condominiums in that region through The Related Companies/Related Group. He is also known as a billionaire Cuban American real estate developer.
Perez is also the majority owner of The Related Companies, which is also the parent company of The Related Companies of California, LLC, another wealthy housing development corporation.
Payments To Consultants To Privatize Berkeley's 75 Public Housing Units -
On March 13, 2014, the BHA Commissioners also voted to pay an additional $23,241 in consultant fees to EJP/Praxis Consultants, and it appears that during the past three years the BHA payed EJP/Praxis consultants as much as $98,711 in total for assistance in privatizing Berkeley's 75 public housing units, and selling them to out-of-state billionaires Jorge M. Perez and Stephen M. Ross, of The Related Companies.
Additionally, documents reveal that on May 12, 2011, the BHA Commissioners voted to pay Overland, Pacific and Cutler an amount of $147,000 to relocate the tenants from their public housing units, and these amounts do not reflect the full costs of legal expenses and other costs associated with privatizing Berkeley's 75 public housing units.
Documented Sequestration Budget Cuts To Federal Housing Programs And Section 8 Vouchers
A 224 page Government Accountability Office (GAO) report released during early March 2014, reveals that the massive sequestration across-the-board budget cuts have savaged our nation's federal subsidized housing programs, including the Section 8 housing choice voucher program.
In total, according to the GAO report the Department of Housing and Urban Development (HUD) estimates that due to sequestration funding cuts Public Housing Authorities provided rental assistance payments to 42,000 fewer low-income households during 2013, compared to Fiscal Year 2012. HUD also estimates that sequestration funding cuts to Homeless Assistance Grants will lead to states and localities removing as many as 60,000 formerly homeless persons from housing and emergency shelter programs all across the nation, placing them at risk of ending up back onto the cold hearted streets of America.
Additionally, sequestration reduced funding for HUD's project-based housing assistance program, through which HUD makes payments to owners of multifamily rental housing units on behalf of around 1.2 million low and very low-income families. Available funding to renew contracts for this program decreased from $9 billion to $8.6 billion.
50% of the current AMI in Berkeley is $31,250
More details regarding the privatization of Berkeley's 75 public housing units -
Click on the link [http://tinyurl.com/mpqjqoe] for more details regarding the skyrocketing costs of privatizing Berkeley's 75 public housing units, and cost to taxpayers for selling the public housing town homes to billionaires Jorge M. Perez and Stephen M. Ross of The Related Companies. See how the project was totally corrupted and how a $400,000 loan was later turned into a grant... See the skyrocketing excessive costs for the consultants involved in the disposition project...
Excessive consultant fees? On March 13, 2014, the BHA Commissioners voted to pay an additional $23,241 in consultant fees to EJP/Praxis Consultants, even though the disposition project has already been completed and the 75 public housing units have been transferred to the new entity, Berkeley 75 Housing Partners, LP. The original consulting costs for EJP/Praxis Consultants was around $37,000, but have skyrocketed to around $100,000 during the past three years.
Click below for more details revealing the corruption of the project to privatize Berkeley's 75 public housing units and how some out-of-state billionaires got a sweetheart deal and were allowed to get their hands on OUR public housing town homes in Berkeley...
Tax Credits used to privatize Berkeley's public housing units -
Click here [http://www.treasurer.ca.gov/ctcac/staff/2013/20130925/869.pdf] for many details of the public housing privatization deal. Loans, bonds, tax credits, and 5 parcel lease agreements used to privatize Berkeley's 75 public housing town homes.
Billionaires grab public housing for $99 a square foot: Median price is $454 per sq foot -
The issuance of $20,000,000 in bonds to assist the billionaires in buying Berkeley's 75 public housing units.
Billionaires Jorge M. Perez and Stephen M. Ross of The Related Companies grab Berkeley's 75 public housing units for only $99 a square foot, even though the current median price is $454 per square foot for housing in Berkeley.
Loan of $18,500,000 for the privatization of Berkeley's public housing -
from [http://www.cmfa-ca.com/resources/CMFA-CFSC%20Agenda%2011%2022%2013.pdf]:
Adoption of a final resolution (resolution 13-110) authorizing the incurrence of a loan in an aggregate principal amount not to exceed $18,500,000 to finance the acquisition and rehabilitation of various housing rental facilities for Berkeley 75 Housing Partners, L.P., and other matters relating thereto.
Lease of Five City Parcels to Berkeley Housing Authority for the Disposition and Rehabilitation of Affordable Housing by Berkeley 75 Housing Partners L.P. -
FISCAL IMPACTS OF RECOMMENDATION:
* The City will receive an initial payment of $500 and an annual payment of $1 per year.
* Funds will be deposited into revenue fund 010- 8150- 360 -9999.
* The Lease has an initial term of seventy years to meet financing requirements, and has an option to renew for twenty-nine years as long as the housing is being operated within the terms of the lease. Click here [http://tinyurl.com/o5jpk7o].
* Issuance of $20,000,000 in bonds for the privatization of Berkeley's 75 public housing units for July 16, 2013, Click here [http://tinyurl.com/q7u83qo].
Breakdown of costs for billionaires to grab Berkeley's 75 public housing town homes -
* Estimated total project cost: $34,997,435
* Breakdown per unit cost of $466,632
* Construction cost per square foot $99
Click here for more details of the public housing privatization deal... [Treasurer.ca.gov/ctcac/staff/2013/20130925/869.pdf]
Estimated total project cost: $34,997,435 (includes breakdown of site amenities, loans, etc...)
* Breakdown per unit cost of $466,632
* Construction cost per square foot $99
75 units total (unit mix for the 15 sites in Berkeley the former public housing units are located on):
* 4 2-bedroom units
* 43 3-bedroom units
* 28 4-bedroom units
North Berkeley, Berkeley average and median listing prices at Trulia.com -
[Trulia.com/real_estate/North_Berkeley-Berkeley/533/market-trends]
The average price per square foot for homes in North Berkeley was $454 in the most recent quarter.
The billionaires Jorge M. Perez and Stephen M. Ross of The Related Companies grabbed Berkeley's public housing town homes for as little as $99 a square foot.
The address of the 75 public housing units recently privatized, tax credit amounts, loans, and the affordability breakdown by unit (Dated September 25, 2013):
Berkeley 75 Housing Partners, LP
Related/Berkeley 75 Development Co., LP
Lydia Tan was involved in the project to privatize Berkeley's public housing units.
lydia.tan [at] related.com at Related in San Francisco.
[http://www.relatedcalifornia.com/ourcompany/executives/23/Lydia-Tan]
Contact: Frank Cardone
address: 18201 Von Karman Ave, Suite 900, Irvine, CA. 926612
fcardone [at] related.com
949/660-7272
Tuesday, February 18, 2014
"Rancho Cordova Couple Turns Tables On Lender’s Foreclosure Attempt"
2014-02-16 from "CBS13 Sacramento" news [http://sacramento.cbslocal.com/2014/02/16/rancho-cordova-couple-turns-tables-on-lenders-foreclosure-attempt/]:
RANCHO CORDOVA (CBS13) — A Rancho Cordova couple is staying in their home after it was nearly sold out from underneath them by their bank.
Cheryl Alimena and her husband Charles say their home was full of life and celebrations.
“We planned on being here for the rest of our lives,” he said.
It was also filled with grief after their son died in a car accident just two years ago.
“This house, it has a lot of memories for us, and it meant a lot to us before, but it means a lot more now,” Cheryl said.
The family nearly lost that home, but they won it back from a pending foreclosure after suing their lender.
“It was like a bad dream,” Charles said.
They’re one of a growing group of foreclosed California owners taking their lenders to court following the foreclosure crisis.
Loans from the housing bubble were repackaged as securities and sold on Wall Street. That put the true holders of the mortgage debt in question.
“The entity that’s trying to foreclose on them has no legal standing to do so,” said attorney Stephen Foondos.
“This is of course something the banks want no one to know about, because otherwise you would have everyone running to the court trying to file a claim.
The legal ruling turned into a reversal of fortune for the Alimenas. The nightmare they’d lose their dream home is over.
“For the little person to actually be able to win, I think that’s what people need to know,” Cheryl said, “is that there is hope out there for them.”
As part of the settlement, the couple also reduced their monthly mortgage payment by $800 a month.
RANCHO CORDOVA (CBS13) — A Rancho Cordova couple is staying in their home after it was nearly sold out from underneath them by their bank.
Cheryl Alimena and her husband Charles say their home was full of life and celebrations.
“We planned on being here for the rest of our lives,” he said.
It was also filled with grief after their son died in a car accident just two years ago.
“This house, it has a lot of memories for us, and it meant a lot to us before, but it means a lot more now,” Cheryl said.
The family nearly lost that home, but they won it back from a pending foreclosure after suing their lender.
“It was like a bad dream,” Charles said.
They’re one of a growing group of foreclosed California owners taking their lenders to court following the foreclosure crisis.
Loans from the housing bubble were repackaged as securities and sold on Wall Street. That put the true holders of the mortgage debt in question.
“The entity that’s trying to foreclose on them has no legal standing to do so,” said attorney Stephen Foondos.
“This is of course something the banks want no one to know about, because otherwise you would have everyone running to the court trying to file a claim.
The legal ruling turned into a reversal of fortune for the Alimenas. The nightmare they’d lose their dream home is over.
“For the little person to actually be able to win, I think that’s what people need to know,” Cheryl said, “is that there is hope out there for them.”
As part of the settlement, the couple also reduced their monthly mortgage payment by $800 a month.
Thursday, February 13, 2014
"San Francisco’s Displacement Crisis: Speculators, Banks, and Developers Seeking to Unlock Value in San Francisco's Rental Housing Are Pouring Money Into the City's Politics. Tenants Are Fighting Back"
2014-02-13 by Darwin Bond-Graham from "CounterPunch" [counterpunch.org/2014/02/13/san-franciscos-displacement-crisis]:
Darwin Bond-Graham, a contributing editor to CounterPunch, is a sociologist and author who lives and works in Oakland, CA. His essay on economic inequality in the “new” California economy appears in theJuly issue of CounterPunch magazine. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion
---
The tech boom has made San Francisco’s real estate the most expensive in the nation. Tech companies, from startups to Fortune 500 firms, are cleaving more and more income for themselves out of the U.S. economy, mainly through advertising, smartphones, and tax shams. As the preferred domicile of the tech workforce, and now even as a choice address for tech offices, San Francisco’s housing and commercial space is in hot demand from buyers who have seemingly unlimited cash. This has pushed up prices considerably. Add the background effects caused by several years of bond buying by the U.S. Federal Reserve —the rise in all real estate values nationwide— and you’ve got a city where the median home price topped $1 million last year, and monthly rent for a one bedroom is averaging just shy of $3,000.
Into this maw of demand the developers are shoveling units and square feet. Take a look at the development pipeline (available online [http://www.sf-planning.org/index.aspx?page=1691] courtesy of the San Francisco Planning Department) and you’ll see a map of the 49 square miles of the city, much of it, especially the eastern half, is crowded with projects packing in housing, retail, and office footage. There’s 50,600 proposed units of housing coming to San Francisco. Approximately 27,000 of these housing units have already been approved by officials, with 6,100 currently under construction. Most of the housing being built is “market rate,” meaning that it’s priced for those who can afford to spend roughly $36,000 a year on rent, or who have a quarter million in cash to drop on a down payment. Despite the popular myth that “nimby” forces have retarded growth, San Francisco is a real estate development beast.
Beast is the operative word. Landlords, developers, and their lawyers are mauling thousands of lower-income renters. The crisis is displacement. The tech boom has conspired with rising housing prices to create an incredibly profitable incentive for landlords to push out low-income tenants and replace them with wealthy buyers, in spite of all the new units coming to market. The favorite tool, although it’s unclear how widely it’s used, is a quiet buyout, telling renters to just leave, and offering a tidy little cash sum to help them say yes. Maria Zamudio, a community organizers with Causa Justa, Just Cause, says many of these so-called “self evictions” are coerced. “Really when your landlord is calling you every night and pressuring you, is it really a choice to leave?,” Zamudio rhetorically asks.
But if they go on their volition, the renters go quietly into the night, and the landlord can do practically whatever they want with the apartment, or the building. They can jack up rents, or convert to condos, or go for the clean slate demolition to build taller and more luxurious. No one, not the city, nor the state, nor any community organization has a handle on how many of these kinds of evictions there are.
The increasingly common tool wealthy investors use to unlock value in San Francisco real estate is the Ellis Act. Speculative investors are buying small apartment buildings and invoking the 1986 law to remove rental buildings from the city’s housing stock. The Ellis Act is named after State Senator Jim Ellis, a conservative San Diego Republican who framed the law as a defense of beleaguered landlords who were just trying to keep Big Government off their backs. “Ellising” a building allows landlords to convert apartments into condos. During the Dotcom boom of the late 1990s and early 2000s there was a rash of Ellis Act evictions across San Francisco.
Ted Gullicksen of the San Francisco Tenants Union says Ellis Act evictions have risen this past year to another crisis point. “People are terrified,” he told a gathering of tenants and activists recently. “We know that if we lose our homes we will be forced out of the city, or in the worst case onto the streets.” According to Gullicksen Ellis Act evictions were up 140 percent in 2013 from the previous year.
The only problem for investors seeking to use the Ellis Act is that in San Francisco condo conversion was strictly controlled for years through a lottery that awarded only 200 permits a year. So instead many of the buildings emptied of their renters were converted into what’s called a tenancy-in-common, or TIC. TICs are an otherwise obscure and inconvenient form of real estate ownership, but it has become strangely common in San Francisco: such is the thirst to eliminate rentals and sell housing in a form that captures enormous profit through capital gains. In a TIC a buyer purchases a percentage interest of ownership in an entire building, concurrently with the other residents. Thus the property records of many buildings in San Francisco are now a tangle of deeds deeming small fractions of undivided ownership interests in whole parcels.
Because of their complexity and illiquidity, TICs are costlier and more difficult to finance than condos. The big banks and mortgage lenders don’t like them. In San Francisco a small group of banks have made financing TICs among their core business. Sterling Bank & Trust is among the top TIC lenders, and its executives and employees are a large source of campaign cash for San Francisco’s politicians. For Sterling Bank & Trust TICs are a multi-hundred million dollar market opportunity. Any restrictions would eat into profits, so the cash flows readily into political races.
In 2013 Stephen Adams of Sterling Bank & Trust dealt out the maximum allowable contributions to Supervisors Mark Farrell and Scott Weiner’s re-election committees, $500 a pop. He also gave $250 to Supervisor Jane Kim’s reelection committee, and another $250 to Supervisor Malia Cohen. In fact, look into almost any recent or upcoming San Francisco campaign and there will be money from Sterling Bank & Trust funding one, or both sides of the race. Since 2004 the Sterling Bank & Trust has spent at least $26,000 on San Francisco elections, according to campaign finance data. Mayor Ed Lee got $9,000 from Sterling Bank & Trust and its employees since 2011.
Just how much Sterling Bank & Trust has earned financing TIC mortgages is unknown. Sterling is a private bank, owned by Scott Seligman, the son of wealthy Detroit industrialist. One of Sterling’s main offices is in the ground floor of a San Francisco financial district boutique office mid-rise owned by the Hearst Corporation (Hearst owns the San Francisco Chronicle, and some very valuable real estate parcels in downtown San Francisco). Seligman is also a co-owner of the San Francisco Giants Baseball Club, as are other major San Francisco real estate entrepreneurs.
Supervisors Weiner and Farrell are widely seen as the most real estate industry-friendly elected officials. In 2013 they co-sponsored legislation that would have allowed thousands of TIC units to be converted to condos. Owners would have paid a one time fee, but from then on they’d own very lucrative slices of the urban market, carved into the more marketable unit than the undivided share: the lot.
Tenant advocates pushed the rest of the Board of Supervisor’s to intervene. “It was an extremely disastrous measure that would have furthered condo conversions,” says Sara Shortt of the Housing Rights Committee of San Francisco. “We pulled some amazing jiu-jitsu on that.”
The resulting legislation, modified by David Chiu and fellow Supervisor Norman Yee, allowed for some TIC conversions, but put in place serious restrictions, so serious that the real estate industry backed off, as did Weiner and Farrell who withdrew their support for the bill. It passed anyway. The conversions are allowed for units that were eligible in 2012, but the previous condo-conversion lottery will be suspended for ten years. The law effectively shut down the manufacturing line that banks like Sterling, and dozens of developers have been using to first turn apartment buildings into TICs, and then into condos. Still the TICs proliferate, as do other real estate deals that further erode the affordability and security of housing in San Francisco.
As the real estate market heats up, investors, developers, and landlords are sowing cash into local political races in hopes of gaining more influence over policy. One in every four dollars raised by Supervisor Scott Weiner last year for his reelection bid came directly from the real estate industry. Campaign finance disclosure forms filed by Weiner reveal that both small and large landlords, real estate developers, property managers, and dozens of brokers and agents put $37,000 in Weiner’s bank account in 2013. Many of these contributors have business pending before the city’s Planning Board, or awaiting decisions by the Board of Supervisors and various city departments. Some of the largest landlords in the city like Vanguard Properties and Herth Real Estate, Zephyr Real Estate, California Property Services, and Flynn Investments are backing Weiner.
Supervisor Mark Farrell raked in $29,000 from the real estate industry in 2013 according to campaign disclosure filings. One of Farrell’s backers is Thomas Coates, a millionaire who lives in a three-story mansion just a stone’s throw from the Marina Green, part of Farrell’s district which includes several of the wealthiest zip codes in the nation. Coates is infamous for spending $950,000 in 2008 to promote Proposition 98, a ballot initiative that would have phased rent control out across California. (Shortly after receiving unfavorable press about his role in bankrolling Proposition 98, Coates wrote in an open letter that his motivation had more to do with restricting cities’ power to use eminent domain, something the law would have also accomplished. He added that while he does own a lot of real estate, none of it is in the form of San Francisco apartments.)
Coates is also a recent contributor to Weiner, having given the Castro District Supervisor $500 last October. It’s all chump change so far compared to what Coates expended in San Francisco’s 2010 elections, $200,000 funneled through independent committees to supported Farrell, Weiner, and another candidate who was not elected. It’s likely, however, that as the November 2014 election nears, real estate industry partisans like Coates will intensify their efforts to shape the outcome.
About 15 percent, or $19,000, of Supervisor Jane Kim’s campaign cash raised in 2013 came directly from real estate interests, according to an analysis of her recent campaign disclosure filings. Among the single biggest sources was the Emerald Fund, a development company run by Marc Babsin. Emerald Fund builds giant apartment buildings. Babsin and his team control some of the most valuable property in the city. The city Planning Commission has green-lighted Emerald Fund to build a 13 story, 162 unit apartment high rise at 101 Polk Street, tucked between the Civic Center and Market Street in what is said to be the hottest spot for development in the whole city. Emerald Fund also controls parcels directly across Hayes Street, and nearby on Van Ness, and has sketched out plans to build upwards of 900 units. The area is considered choice because of its proximity to Twitter’s headquarters and several high-rise luxury apartment buildings already under construction that are being marketed to the industry’s affluent employees. Emerald Fund staff gave Jane Kim’s re-election committee $2,000 last year, and the wife of the company’s president Alastair MacTaggart put in $500 more. Emerald Fund gave another $2,000 to Weiner, and $1,500 to Malia Cohen.
Other big developers giving cash to San Francisco’s politicians include Forest City, AGI Capital, TMG Partners, and Group I. AGI Capital employees have given Supervisor Cohen $2,000 over the past year. Jack Sylvan, Forest City’s vice president who is leading up the company’s massive Pier 70 project, 1,000 condos and apartments and over 2 million square feet of office space designed to attract large tech companies, has written $500 checks to Supervisors Weiner, Farrell and Cohen. Employees of Group I, a developer and landlord with office space in the Mid-Market Twitter-zone that it fills with “start-ups” and “venture capitalist” firms, according to the company’s web site, have given $2,000 to Supervisor Jane Kim, and $500 to Scott Weiner over the past year.
Landlords who have recently used the Ellis Act, and who have even been targeted by tenants and protesters, haven’t been shy about putting their money into San Francisco’s political races. For example, Ashok Gurjal, a very active San Francisco property speculator, wrote a $250 check to Supervisor Scott Weiner in October of 2013. Gurjal recently moved to evict residents of a ten unit apartment building in the Mission District, according to the Anti-Eviction Mapping Project [http://www.antievictionmappingproject.net/], an activist group that tracks investor activity.
Dennis and Russell Flynn of Flynn Investments have already written checks to Weiner and Cohen for $1,000 for their 2014 re-election committees. In 2013 employees of Flynn Investments gave $9,000 to San Franisco politicians, including $1,500 to City Attorney Dennis Herrera, $1,500 to Supervisor London Breed, $1,000 to Assessor Carmen Chu, and $3,000 to Supervisor Katy Tang. Flynn Investments is one of the largest landlords in San Francisco, with a portfolio of apartments estimated around 3,500. The Flynns have the distinction of pursuing the most grandiose eviction and TIC conversion in San Francisco history, turning the Park Lane building, a ritzy 1925 address atop Nob Hill into pads that are selling for $3 million.
While the real estate industry has the money, San Francisco’s tenants still have quite a bit of power. Tenants have their allies on the Board of Supervisors, especially John Avalos, David Campos, Eric Mar, and David Chiu. Last Saturday over one thousand San Franciscans gathered in the Tenderloin Elementary School’s gymnasium for a city-wide tenants convention. To ring in the gathering they chanted, “when landlords use the Ellis Act, what do we do? Stand up, fight back!” Attendees brainstormed over proposals to reign in real estate speculation, including a moratorium on no-fault evictions, and even an anti-speculation tax that would dramatically reduce profits, creating a disincentive for landlords to carve up apartment buildings into TICs and condos.
“There’s this myth that it’s really difficult to evict tenants in San Francisco,” said Tyler Macmillan of the Eviction Defense Collaborate, a legal office that helps tenants in distress. “We need to write better laws that keep people in their homes. Those policies that we can’t get through the Board of Supervisors, we’re gonna put on the ballot for the people to vote on.” Others at the convention spoke in more direct and forceful tones about taking direct action to stop evictions.
The room listened somberly as Gum Gee Lee, a 74 year-old elder of San Francisco’s Chinatown community recounted her family’s eviction from their home of 30 years, an apartment on Jackson Street where converted TICs now sell for $1 million and up. “It was a time of pain, I couldn’t sleep,” said Lee. “I though to myself, is this how I’m going to live my last days?”
Cheers erupted when Lee shook off the sense of defeat saying resolutely, “for all those being evicted, friends, you need to stick together and fight!”
Darwin Bond-Graham, a contributing editor to CounterPunch, is a sociologist and author who lives and works in Oakland, CA. His essay on economic inequality in the “new” California economy appears in theJuly issue of CounterPunch magazine. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion
---
The tech boom has made San Francisco’s real estate the most expensive in the nation. Tech companies, from startups to Fortune 500 firms, are cleaving more and more income for themselves out of the U.S. economy, mainly through advertising, smartphones, and tax shams. As the preferred domicile of the tech workforce, and now even as a choice address for tech offices, San Francisco’s housing and commercial space is in hot demand from buyers who have seemingly unlimited cash. This has pushed up prices considerably. Add the background effects caused by several years of bond buying by the U.S. Federal Reserve —the rise in all real estate values nationwide— and you’ve got a city where the median home price topped $1 million last year, and monthly rent for a one bedroom is averaging just shy of $3,000.
Into this maw of demand the developers are shoveling units and square feet. Take a look at the development pipeline (available online [http://www.sf-planning.org/index.aspx?page=1691] courtesy of the San Francisco Planning Department) and you’ll see a map of the 49 square miles of the city, much of it, especially the eastern half, is crowded with projects packing in housing, retail, and office footage. There’s 50,600 proposed units of housing coming to San Francisco. Approximately 27,000 of these housing units have already been approved by officials, with 6,100 currently under construction. Most of the housing being built is “market rate,” meaning that it’s priced for those who can afford to spend roughly $36,000 a year on rent, or who have a quarter million in cash to drop on a down payment. Despite the popular myth that “nimby” forces have retarded growth, San Francisco is a real estate development beast.
Beast is the operative word. Landlords, developers, and their lawyers are mauling thousands of lower-income renters. The crisis is displacement. The tech boom has conspired with rising housing prices to create an incredibly profitable incentive for landlords to push out low-income tenants and replace them with wealthy buyers, in spite of all the new units coming to market. The favorite tool, although it’s unclear how widely it’s used, is a quiet buyout, telling renters to just leave, and offering a tidy little cash sum to help them say yes. Maria Zamudio, a community organizers with Causa Justa, Just Cause, says many of these so-called “self evictions” are coerced. “Really when your landlord is calling you every night and pressuring you, is it really a choice to leave?,” Zamudio rhetorically asks.
But if they go on their volition, the renters go quietly into the night, and the landlord can do practically whatever they want with the apartment, or the building. They can jack up rents, or convert to condos, or go for the clean slate demolition to build taller and more luxurious. No one, not the city, nor the state, nor any community organization has a handle on how many of these kinds of evictions there are.
The increasingly common tool wealthy investors use to unlock value in San Francisco real estate is the Ellis Act. Speculative investors are buying small apartment buildings and invoking the 1986 law to remove rental buildings from the city’s housing stock. The Ellis Act is named after State Senator Jim Ellis, a conservative San Diego Republican who framed the law as a defense of beleaguered landlords who were just trying to keep Big Government off their backs. “Ellising” a building allows landlords to convert apartments into condos. During the Dotcom boom of the late 1990s and early 2000s there was a rash of Ellis Act evictions across San Francisco.
Ted Gullicksen of the San Francisco Tenants Union says Ellis Act evictions have risen this past year to another crisis point. “People are terrified,” he told a gathering of tenants and activists recently. “We know that if we lose our homes we will be forced out of the city, or in the worst case onto the streets.” According to Gullicksen Ellis Act evictions were up 140 percent in 2013 from the previous year.
The only problem for investors seeking to use the Ellis Act is that in San Francisco condo conversion was strictly controlled for years through a lottery that awarded only 200 permits a year. So instead many of the buildings emptied of their renters were converted into what’s called a tenancy-in-common, or TIC. TICs are an otherwise obscure and inconvenient form of real estate ownership, but it has become strangely common in San Francisco: such is the thirst to eliminate rentals and sell housing in a form that captures enormous profit through capital gains. In a TIC a buyer purchases a percentage interest of ownership in an entire building, concurrently with the other residents. Thus the property records of many buildings in San Francisco are now a tangle of deeds deeming small fractions of undivided ownership interests in whole parcels.
Because of their complexity and illiquidity, TICs are costlier and more difficult to finance than condos. The big banks and mortgage lenders don’t like them. In San Francisco a small group of banks have made financing TICs among their core business. Sterling Bank & Trust is among the top TIC lenders, and its executives and employees are a large source of campaign cash for San Francisco’s politicians. For Sterling Bank & Trust TICs are a multi-hundred million dollar market opportunity. Any restrictions would eat into profits, so the cash flows readily into political races.
In 2013 Stephen Adams of Sterling Bank & Trust dealt out the maximum allowable contributions to Supervisors Mark Farrell and Scott Weiner’s re-election committees, $500 a pop. He also gave $250 to Supervisor Jane Kim’s reelection committee, and another $250 to Supervisor Malia Cohen. In fact, look into almost any recent or upcoming San Francisco campaign and there will be money from Sterling Bank & Trust funding one, or both sides of the race. Since 2004 the Sterling Bank & Trust has spent at least $26,000 on San Francisco elections, according to campaign finance data. Mayor Ed Lee got $9,000 from Sterling Bank & Trust and its employees since 2011.
Just how much Sterling Bank & Trust has earned financing TIC mortgages is unknown. Sterling is a private bank, owned by Scott Seligman, the son of wealthy Detroit industrialist. One of Sterling’s main offices is in the ground floor of a San Francisco financial district boutique office mid-rise owned by the Hearst Corporation (Hearst owns the San Francisco Chronicle, and some very valuable real estate parcels in downtown San Francisco). Seligman is also a co-owner of the San Francisco Giants Baseball Club, as are other major San Francisco real estate entrepreneurs.
Supervisors Weiner and Farrell are widely seen as the most real estate industry-friendly elected officials. In 2013 they co-sponsored legislation that would have allowed thousands of TIC units to be converted to condos. Owners would have paid a one time fee, but from then on they’d own very lucrative slices of the urban market, carved into the more marketable unit than the undivided share: the lot.
Tenant advocates pushed the rest of the Board of Supervisor’s to intervene. “It was an extremely disastrous measure that would have furthered condo conversions,” says Sara Shortt of the Housing Rights Committee of San Francisco. “We pulled some amazing jiu-jitsu on that.”
The resulting legislation, modified by David Chiu and fellow Supervisor Norman Yee, allowed for some TIC conversions, but put in place serious restrictions, so serious that the real estate industry backed off, as did Weiner and Farrell who withdrew their support for the bill. It passed anyway. The conversions are allowed for units that were eligible in 2012, but the previous condo-conversion lottery will be suspended for ten years. The law effectively shut down the manufacturing line that banks like Sterling, and dozens of developers have been using to first turn apartment buildings into TICs, and then into condos. Still the TICs proliferate, as do other real estate deals that further erode the affordability and security of housing in San Francisco.
As the real estate market heats up, investors, developers, and landlords are sowing cash into local political races in hopes of gaining more influence over policy. One in every four dollars raised by Supervisor Scott Weiner last year for his reelection bid came directly from the real estate industry. Campaign finance disclosure forms filed by Weiner reveal that both small and large landlords, real estate developers, property managers, and dozens of brokers and agents put $37,000 in Weiner’s bank account in 2013. Many of these contributors have business pending before the city’s Planning Board, or awaiting decisions by the Board of Supervisors and various city departments. Some of the largest landlords in the city like Vanguard Properties and Herth Real Estate, Zephyr Real Estate, California Property Services, and Flynn Investments are backing Weiner.
Supervisor Mark Farrell raked in $29,000 from the real estate industry in 2013 according to campaign disclosure filings. One of Farrell’s backers is Thomas Coates, a millionaire who lives in a three-story mansion just a stone’s throw from the Marina Green, part of Farrell’s district which includes several of the wealthiest zip codes in the nation. Coates is infamous for spending $950,000 in 2008 to promote Proposition 98, a ballot initiative that would have phased rent control out across California. (Shortly after receiving unfavorable press about his role in bankrolling Proposition 98, Coates wrote in an open letter that his motivation had more to do with restricting cities’ power to use eminent domain, something the law would have also accomplished. He added that while he does own a lot of real estate, none of it is in the form of San Francisco apartments.)
Coates is also a recent contributor to Weiner, having given the Castro District Supervisor $500 last October. It’s all chump change so far compared to what Coates expended in San Francisco’s 2010 elections, $200,000 funneled through independent committees to supported Farrell, Weiner, and another candidate who was not elected. It’s likely, however, that as the November 2014 election nears, real estate industry partisans like Coates will intensify their efforts to shape the outcome.
About 15 percent, or $19,000, of Supervisor Jane Kim’s campaign cash raised in 2013 came directly from real estate interests, according to an analysis of her recent campaign disclosure filings. Among the single biggest sources was the Emerald Fund, a development company run by Marc Babsin. Emerald Fund builds giant apartment buildings. Babsin and his team control some of the most valuable property in the city. The city Planning Commission has green-lighted Emerald Fund to build a 13 story, 162 unit apartment high rise at 101 Polk Street, tucked between the Civic Center and Market Street in what is said to be the hottest spot for development in the whole city. Emerald Fund also controls parcels directly across Hayes Street, and nearby on Van Ness, and has sketched out plans to build upwards of 900 units. The area is considered choice because of its proximity to Twitter’s headquarters and several high-rise luxury apartment buildings already under construction that are being marketed to the industry’s affluent employees. Emerald Fund staff gave Jane Kim’s re-election committee $2,000 last year, and the wife of the company’s president Alastair MacTaggart put in $500 more. Emerald Fund gave another $2,000 to Weiner, and $1,500 to Malia Cohen.
Other big developers giving cash to San Francisco’s politicians include Forest City, AGI Capital, TMG Partners, and Group I. AGI Capital employees have given Supervisor Cohen $2,000 over the past year. Jack Sylvan, Forest City’s vice president who is leading up the company’s massive Pier 70 project, 1,000 condos and apartments and over 2 million square feet of office space designed to attract large tech companies, has written $500 checks to Supervisors Weiner, Farrell and Cohen. Employees of Group I, a developer and landlord with office space in the Mid-Market Twitter-zone that it fills with “start-ups” and “venture capitalist” firms, according to the company’s web site, have given $2,000 to Supervisor Jane Kim, and $500 to Scott Weiner over the past year.
Landlords who have recently used the Ellis Act, and who have even been targeted by tenants and protesters, haven’t been shy about putting their money into San Francisco’s political races. For example, Ashok Gurjal, a very active San Francisco property speculator, wrote a $250 check to Supervisor Scott Weiner in October of 2013. Gurjal recently moved to evict residents of a ten unit apartment building in the Mission District, according to the Anti-Eviction Mapping Project [http://www.antievictionmappingproject.net/], an activist group that tracks investor activity.
Dennis and Russell Flynn of Flynn Investments have already written checks to Weiner and Cohen for $1,000 for their 2014 re-election committees. In 2013 employees of Flynn Investments gave $9,000 to San Franisco politicians, including $1,500 to City Attorney Dennis Herrera, $1,500 to Supervisor London Breed, $1,000 to Assessor Carmen Chu, and $3,000 to Supervisor Katy Tang. Flynn Investments is one of the largest landlords in San Francisco, with a portfolio of apartments estimated around 3,500. The Flynns have the distinction of pursuing the most grandiose eviction and TIC conversion in San Francisco history, turning the Park Lane building, a ritzy 1925 address atop Nob Hill into pads that are selling for $3 million.
While the real estate industry has the money, San Francisco’s tenants still have quite a bit of power. Tenants have their allies on the Board of Supervisors, especially John Avalos, David Campos, Eric Mar, and David Chiu. Last Saturday over one thousand San Franciscans gathered in the Tenderloin Elementary School’s gymnasium for a city-wide tenants convention. To ring in the gathering they chanted, “when landlords use the Ellis Act, what do we do? Stand up, fight back!” Attendees brainstormed over proposals to reign in real estate speculation, including a moratorium on no-fault evictions, and even an anti-speculation tax that would dramatically reduce profits, creating a disincentive for landlords to carve up apartment buildings into TICs and condos.
“There’s this myth that it’s really difficult to evict tenants in San Francisco,” said Tyler Macmillan of the Eviction Defense Collaborate, a legal office that helps tenants in distress. “We need to write better laws that keep people in their homes. Those policies that we can’t get through the Board of Supervisors, we’re gonna put on the ballot for the people to vote on.” Others at the convention spoke in more direct and forceful tones about taking direct action to stop evictions.
The room listened somberly as Gum Gee Lee, a 74 year-old elder of San Francisco’s Chinatown community recounted her family’s eviction from their home of 30 years, an apartment on Jackson Street where converted TICs now sell for $1 million and up. “It was a time of pain, I couldn’t sleep,” said Lee. “I though to myself, is this how I’m going to live my last days?”
Cheers erupted when Lee shook off the sense of defeat saying resolutely, “for all those being evicted, friends, you need to stick together and fight!”
Tuesday, December 17, 2013
"Save Our Homes" campaign in Richmond, CA
2013-12-17 from Ed Donaldson:
Richmond, CA homeowners out in force in support of.eminent domain aka #RichmondCares #LocalSolution
Richmond, CA homeowners out in force in support of.eminent domain aka #RichmondCares #LocalSolution
Subscribe to:
Posts (Atom)