October 23, 2010

Family Breaks Into Former Home, Moves Back In, Claims Foreclosure was Fraudulent, Lots of Legal Maneuvers

Thanks to a burbed reader for sending this in.  I know it looks like another TL;DR, but trust me, this one’s worth it.

Family reclaims foreclosed house, Simi clan moves in after home sold

By Stephanie Hoops, Ventura County Star
Posted October 12, 2010 at 2 p.m., updated October 13, 2010 at 6:58 a.m.
Photos by Karen Quincy Loberg, VC Star Staff

simi_family An 11-member Simi Valley family who claimed they were wrongfully evicted after a foreclosure forced their way back into the house over the weekend in a move meant to block the new buyer from moving in.

Jim and Danielle Earl and their nine children used a locksmith to help retake possession Saturday, despite an investor who spent $697,000 to purchase the house at a foreclosure sale in January and remodeled and sold it to people ready to move in Tuesday. The two-story house in the 5800 block of Mustang Drive has nearly 4,000 square feet, six bedrooms and 4.5 baths.

Police officers were on hand when the Earls changed the locks Saturday but did not intervene. The Earls’ lawyer, Michael Pines of Encinitas, held a news conference to announce the family was taking back the home and reportedly filed a complaint against the real estate broker and investor when police arrived at the scene.

Pines said the Earls are not concerned about the possibility of being charged with trespassing.

The Wall Street Journal covered this story too, and they said we may be seeing more of this.  Now it’s not enough for a bank to go through through all the steps of foreclosure and eviction on determined deadbeats.  You never know when they’ll turn around, hire a lawyer and a locksmith, and move right back into the house you sold out from under them in good faith! Your team of robo-signers worked hard forging a pile of documents and backdated every single one of them, and all for naught.

image Actually this story gets more and more complicated depending on which version you read.  But the basic facts are, the Earl family bought the house in 2001 for $539,999.  Being Southern Californians, they considered mortgage equity withdrawal a religious rite rather than a guaranteed method of ruining their credit and their future, and owed $880,000 on the first mortgage, when they were finally shown the door of their former residence.  Total debt and unpaid costs on the property was over a million dollars, according to foreclosure documents.

The house was bought by investors for $697,000, who put $40,000 of improvements into it (including the mandatory granite countertops) and flipped it for $800,000.  With the new owners scheduled to take possession within a few days, the Earls (both parents and 9 children) broke in and moved their stuff back.

A number of items are in dispute, which is where the fraud claims come in.  This may be a question of which party are the bigger slimebuckets, as absolutely nobody comes out looking good in this story.

The Earls had some financial difficulties, and in trying to set their mortgage right, say that a catch-up payment of $12,500 they made to GRP Services was never credited to their loan.  Danielle Earl says she then stopped making payments because the loan had been repeatedly reassigned to different lenders, she believed, fraudulently.  “They clearly didn’t want us to catch up,” she explained.  Their lawyer elaborated:

The Earls’ fraud claims are twofold, [Michael] Pines said: The loan was originated and serviced with improper documents, and the foreclosure and eviction were created with new and phony documents. He said there were multiple instances of people signing the foreclosure documents who were not authorized to do so.

Foreclosure documents says GRP Financial Services owns the loan.  The Earls’ mortgage was from WaMu, which was acquired by JPMorgan Chase, and went to B of A the same day the Notice of Default was sent.  The Earls claim Chase never properly acquired their loan and therefore had no right to sell it.  Not surprisingly, the group acquiring the house doesn’t see it that way.

“They broke in and are proceeding to squat in there,” listing agent Chris Garvin of Troop Real Estate, told HousingWatch. […]

Garvin was not only the listing agent but also the acquisition and sales partner for his client, Conejo Capital Partners, the investors. He says that he purchased the home in good faith for $697,000 in January on behalf of his client, at an auction on the courthouse steps.

In June, a judge refused to seat a jury for trial, claiming it was another delaying tactic by the Earls.  Conejo had been trying to get them out of the house since February.

In 1994, the Earls have filed for Chapter 7 bankruptcy, and they began two serial and voluntary Chapter 13 bankruptcy proceedings after their house was sold at auction  The judge claimed the bankruptcies were yet another delaying tactic.  Their liabilities exceed one million dollars, with creditors including both the IRS and the state tax board.

At the close of the trial, however, [Conejo attorney Stanley] Yates said of the whole matter: “I will say this, that the (Earls) are an indefatigable source of stalling and red herrings.”

The Earls are asking for damages of over one million dollars on the fraud allegations, and claim this means they own the house free and clear plus additional money owed them.

Good luck with that.

Comments (30) -- Posted by: madhaus @ 5:04 am

30 Responses to “Family Breaks Into Former Home, Moves Back In, Claims Foreclosure was Fraudulent, Lots of Legal Maneuvers”

  1. waiting_for_the_fall Says:

    Why do the scammers always have a huge brood of kids?
    I feel sorry for anyone growing up in that environment. The kids are taught from an early age to cheat and steal instead of working for what you earn.

  2. SEA Says:

    “Their liabilities exceed one million dollars, with creditors including both the IRS and the state tax board.”

    Nine kids and a house and you still owe the IRS? I thought a house was supposed to fix tax problems. You know, that magic tax refund.

  3. nomadic Says:

    Why do the scammers always have a huge brood of kids?

    1. Kids are expensive.
    2. The higher # of kids, the lower the IQ?

  4. SEA Says:

    nomadic- You’re all backwards.

    First kids mean big tax refunds.
    Second the higher the number of kids, the larger the big tax refund.

    It’s like owing on a home to put all those kids in… The more interest you pay, the higher your tax refund. The only problem with this strategy, of course, is the fact that the so-called owner must pay the interest.

    It does remind me of Flagpole Sitta by Harvey Danger:

    “I’ve been around the world and found that only stupid people are breeding
    the cretins cloning and feeding
    and I don’t even own a TV.”

    Too bad they didn’t buy an RBA home, where they could have sold for so much more than what was owed.

  5. madhaus Says:

    I didn’t want to include even more complexity in this Teal Deer of a tale, but the Earls have three biological children and six adopted, plus over the years they’ve had 43 foster kids. And they homeschool.

    I linked to 3 different articles, and the effect from reading them all gave me vertigo. I still haven’t figured out which group is scammier.

    There’s been quite a lot of news about forged documents being produced for use in foreclosures, since a lot of banks skipped registering their liens with the county recorder, especially with the constant securitization bundling. This is a terrible case to use in telling that story since the “victims” seem as irresponsible as the string of banks as well as the flippers.

    $880K in debt on a house they bought for $539K. Way to go, Einsteins. Made as much sense as adopting six extra kids you couldn’t afford.

  6. Alex Says:

    Damn. TL;DR.

    Seems interesting though. Might go back and read the next 5 sentences tonight. Then the rest gradually if it maintains my interest.

  7. anon Says:

    Look at these stinkpots.

    Is it any wonder people with no money love to “buy” homes?

  8. Tuno Says:

    Oh, well, at least they’re better than the Octomom.

    It seems that they are utterly typical Californians (stupid house,stupid borrowing), *plus* they adopted six kids. I’d actually count the adoptions/fostering as being a good thing. The kids look pretty happy.

    And, they’re probably *right* about the foreclosure being done fraudulently.

    this from someone who has decided to go with dogs, instead of kids

  9. madhaus Says:

    That’s what I love about this story. You can’t tell who defrauded whom. There’s no evidence of any of the claims. Danielle Earl says in her “research” she discovered that Chase had gotten her loan, and she says it wasn’t done right, but how would she know that? I suspect it’s the lawyer pushing that aspect. Rather, these people seem like financial rubes (the scammer part isn’t clear but it’s possible, but if so they’re stupid scammers not clever ones). If they’re too stupid to understand two very basic rules:

    1. Money you borrow has to be paid back
    2. Just because your house went up in value this year doesn’t mean it will go up in value next year

    I doubt Danielle was able to figure out on her own that Chase’s purchasing her loan was off. Rather, I suspect the frequency of the loan handoffs threw her, as I doubt she knew about the loan securitization nonsense (how many people really get that?) let alone the CDSs and CDOs behind them.

    The back-to-back voluntary Chapter 13s don’t look good either, right on the heels of the foreclosure.

    And seriously, when she stopped paying the mortgage, do you think she covered her butt by depositing the payments into escrow? Doubt it.

    Then again, the whole business of the Realtard listing the foreclosure turning around and and investing in the flip has a whiff of something funky.

    I wonder why none of the four news sources (there was the local ABC affiliate too) interviewed the new buyers. How do you think they feel having paid for this place and the Dukes of Earl move back in?

    And of course it wouldn’t surprise anyone if the banks didn’t have any documentation so they just made some up for the foreclosure. I just wonder if the Earls had any documentation for any of their claims, because if they did, it’s amazing they didn’t bother showing it to any of the reporters.

  10. nomadic Says:

    The back-to-back voluntary Chapter 13s don’t look good either, right on the heels of the foreclosure.

    That’s called CYA. They probably wanted to make sure the lenders didn’t chase them down for their non-recourse loans. (I say loans because I’d be surprised if there wasn’t a HELOC in there on top of the first mortgage.)

  11. Randy Quaid Says:

    One of the comments:

    […] Also, “Pines argued his clients have a constitutional right to a jury trial.” The on-line court records for the unlawful detainer action brought against the Earls by Conejo Partners shows that the Earls expressly waived their right to a jury (and also that they lost the trial, and have been ordered out of the property, and to pay Conejo Partners over $27,000 in damages for not vacating when they should have). Re Pines saying he was unable to remember if the appeal was “either dismissed or denied,” he needs to eat more Wheaties. The appeal was dismissed on September 16 because Pines’ office didn’t pay certain fees to the court. Something doesn’t smell right here, and it’s clearly not Conejo Partners that’s stinking up the situation.

  12. Krista Says:

    The fact that the note was bought and sold should be of no concern to the Earls. Their note is a negotiable instrument that can be bought and sold. The fact that the note was sold does not negate their responsibility to pay.

    Based on the amount of interest accrued on the foreclosure docs, the Earls weren’t behind a paltry $12k, and had skipped a substantial amount of payments. Lost interest, legal expenses, and tax and insurance advances accrue rapidly. When borrowers are playing catchup, the payments get applied to these pay due items and expenses first- so she shouldn’t expect her balance or interest due to decrease immediately from catch up payments. Considering the number of foreclosure related actions in the last few years, the fees had to have been substantial.

    As to the jury trial on the eviction, it does not appear that their request for jury trial was made timely, and was purely a stall tactic. Nonetheless, it was the wrong venue to challenge foreclosure, and a lawsuit to stop the foreclosure should have been done prior to the Trust Deed sale.

    As to the initial default, the date of first default and NOTS correlates to their first Christmas light display. According to her website, she got the idea Nov 2005 (after they had taken out $250k cash months earlier), and by March 2006, had purchased everything they needed. The first show occurred December 2006 which was the month the first NOTS was filed. Google Danielle Earl Christmas Light Show and check out the blog and videos to understand what is likely behind the Earl’s default and the type of financial choices they made. Extravagant Christmas Light Show- important. Making mortgage payments- not so important.

  13. Krista Says:

    This HAMP Parody video is applicable to the Earls:


  14. nomadic Says:

    Interesting post, Krista – thanks for more info on the Earls.

    Commenting on the broader issue you raised in the first paragraph, the issue with the sale of notes is much larger. Banks were trading notes in bulk and not bothering to record the change in title with the municipalities where the properties were located. Technically, this is not a legal transaction (and the municipalities are crying foul because of the lost income from those recording fees). Sounds like the Earls heard about these issues after it was too late for them, but decided to sue anyway. After all, they seem out to get something for nothing in every way possible.

  15. madhaus Says:

    Yes, do check out the Xmas light show website. Just page through it and watch it get more elaborate every year, despite those pesky financial problems.


    If you google for this story there’s a statement from Conejo Capital, and there’s more info in the comments. Somebody, maybe even Krista above, posted the borrowing history on the house and it reads like an IHB entry, with total debt on the house over a million. Also an update in the VC Star says the sheriff is kicking them out again this week and their lawyer snickers that they’ll just move right back in, since the judge neglected to issue a permanent injunction against their doing so.

    The lawyer, Michael Pines, seems made for this family. He’s advised other foreclosed clients to break back in and they were arrested.

  16. Krista Says:

    Randy Quaid, I checked out the court records, and you are right. The Earls waived a jury trial. Thank you for the heads up.

    Nomadic, I checked the Ventura County Public Records (Grantor/Grantee Index), and the mortgage assignments and trustee substitutions were recorded. The original deed of trust was with First City Funding Credit Corp and recorded 5/15/05. First City Funding Credit Corp assignment to Bayview Loan Servicing LLC was recorded 8/22/2006. The assignment from Bayview Loan Servicing to GRP Loan LLC was recorded 6/4/2007.

    As to MERS, a borrower can always contact MERS and get information on who holds the note. Though I agree that MERS is not a viable substitute for recorded assignments, it does have it conveniences.

    The Earls had no right to say whether or not their note could be sold so long. The notice was recorded, and they could have checked MERS for transfers. As long as servicing transfers were handled properly and the appropriate notices were given, they are straining at gnats and swallowing camels. They did not perform under the terms of the note and were not entitled to live free, steal improvements, and cause damages to subsequent purchasers. Not every loan was handled by robo-signers and not all documents were forged on every single foreclosure.

    Madhaus, yes, I am the same Krista that posted on Conejo Partners site. I hope that Conejo will secure the property and move someone in. Even though the order is not a permanent order, if the Earls attempt to move in again, I suspect the judge will lose patience and hold them in contempt.

  17. Krista Says:

    If the Earls leave their stuff in the property as they claim they plan, Conejo Partners should immediately remove all of it, and put it in storage. Then they will have to follow California procedure by given the Earls written notice. The Earls will be responsible for storage charges.

    Upon moving the Earls stuff out, they should move other property in, and make sure that the property remains occupied until the property is sold and the new owners take possession.

  18. nomadic Says:

    all right, Krista. Nice piece of work. I can see this case pisses you off.

    Not every loan was handled by robo-signers and not all documents were forged on every single foreclosure.

    True. I just didn’t know if this one was an exception. Apparently it was. Just for the record, I don’t think ANYONE is entitled to their property free and clear if they have not paid off their note. Even if the documentation is FUBARed.

  19. Alex Says:


    MERS may indicate who the note-holder but there is no paperwork to back it up.

    MERS was set up by the mortgage companies to bypass the county recording system. It was not created by some statute or been deemed legal in a court of law. By circumventing the legal process, the banksters now find themselves without the appropriate LEGAL papers during a foreclosure proceeding. In order to foreclose, many states require that each assignment is properly documented, notarized and signed by company officers.

    As discussed ad nauseum here http://market-ticker.org/

    the mortgage bankers and securitizers knowingly and fraudulently packaged crappy loans and sold them to investors. They used MERS to expedite the process and circumvent the legal system. They intentionally broke the laws and forged documents. Those documents have since been shipped off to la-la land or destroyed.

    Using MERS, the banksters bypassed the usual process of assigning notes and recording with the county. Now that it’s time to foreclose, the banksters have a hard time proving ownership because there is no legal paper trail. They’ve had to fraudulently create documents, post-date, notarize and sign using “robo-signers.”

    Deadbeat home-debtors won’t get a free house. But it’s all a matter of time before mortgage-backed security investors force the banksters to unwind these fraudulent loans. These banksters all should be going to prison for knowingly misrepresent their cases to the court. That is, unless Obama and CONgress decides to bail out the banksters again.

  20. Krista Says:

    Alex, this particular transaction had recorded assignments. But, the courts should have stopped MERS years ago when MERS was established. I know how due diligence is supposed to work in documenting assignments, and a lot of lenders took MERS for granted and relied on it in good faith. Again, its helpful to pull up assignment on MERS, but that should not substitute for properly executed endorsements and recordation of intervening assignments.

    I’m well aware of the Karl Denninger’s take and am a member of Ticker Forum myself. Additionally, I have met Karl Denninger, and think he is a great person and very intelligent. I agree with his observations about how the big institutions abused laws, foreclosure mills, and his observations on MERS. I also agree that mortgages should be pushed back and people should go to jail- so long as borrowers don’t use it as an excuse to milk the system and be unjustly enriched.

    I also think that KD is taking a lot about this case on face value- such of their claims that they were denied a jury trial. It sounds incredulous until you check the record and see that they waived a jury trial. They also claim that there is no documentation as to the transfer of note ownership, yet public records shows that assignments are recorded. As to her claims that the mortgage started at Chase and that B of A popped up at the last minute, there is no record that that Chase was involved in the last refinance, and B of A is not reflected anywhere in public records or the Trustee Sale. I do see some assignments involving Ameriquest, Chase, and Argent, however, the assignments appear to connected with a reconveyance of their prior loan in Sept, 2005. If someone didn’t know what the instruments were, they might mistake these for assignments of the most recent mortgage instead of assignments to facilitate reconveyance of a prior lien.

    In looking at the Grantor/Grantee index, the Earls’ have a history of defaults, and subprime loans. The court record also shows a history of bankruptcies. Despite Danielle Earl’s claims that she purchased the equipment for their Christmas light display before their financial troubles began, this is just plain false. Her website claims that she got the idea in Nov 2005, and the first light show was done December 2006 when a Notice of Trustee Sale was filed. Additionally, her own website chronicles how the displays have evolved over the last few years (while there were numerous NODs and NOTS filed), as well as the fact that they converted all the lights to LED in 2009 and added thousands more.

    Given the discrepancies in their statements which conflict with public and court records as well as basic common sense, I don’t believe Michael Pines or the Earls one iota. Michael Pines is currently in bankruptcy and has a number of properties that are in foreclosure. If they have documentation, they need to produce it.

    And yes, Nomadic, this case really pisses me off. But even more so is the fact that some bloggers and media sources will easily co-sign to BS and paint these people as victims without checking their facts.

    Conejo Partners have sustained damages as did the purchasers who were ready to close. These are the real victims, and the Earls and their attorneys should be ashamed.

  21. bob Says:

    This has to be the strangest story I’ve seen on this site. I don’t exactly feel ‘sorry’ for the family in question but I don’t really feel sorry for anyone else in the story either. The whole thing is basically one giant clusterphuck.

  22. Alex Says:


    If the note owner has full documentation and did not commit any fraud (whether it’s backdating, false notarization, etc), then they should just prove it in court and get a court order to have these deadbeats removed.

    I don’t feel sorry for any of these people. The Earls should be homeless. And the banksters should be in prison. (And don’t bother to argue that somehow the banksters are innocent of fraud).

    The only people I feel sorry for are taxpayers who are going to end up getting cornholed by the banksters, Federal Reserve, Helicopter Bernanke and associates, TurboTax Timmy, Obama and CONgress.

  23. Krista Says:

    Alex, the Earls didn’t contest the Trustee Sale so the note holder or subsequent purchaser don’t need to prove anything in court. The Earls did attempt to protest the foreclosure during the Unlawful Detainer hearing, but the judge ruled against them. Same judge issued an order to vacate last week. At this point, the Earls and their attorney should be providing proof of their claims.

    You are preaching to the choir about the systemic fraud as I have been very vocal about the fraud on both ML Implode and Ticker Forum for years.

    I’m just saying these people aren’t victims nor should they be the poster child for Foreclosuregate. Check out a new story on the attorney who sounds like he is doing this to get some sort of TV or radio gig:



    “My goal, frankly, is that I will get a TV show or radio show where once a week I can appear in the media, or be a guest on a show,” he said. “I can do a lot more good if I can inform millions of people.”

  24. madhaus Says:

    Yes, Pines and the Earls are a marriage made in heaven. Wow.


    Attorney Michael T. Pines is DESPERATE to get his failing law practice (1 year old) on the map and get more business. Michael T. Pines is calling the MEDIA to come to the properties he’s breaking into to PROMOTE himself and make a spectacle of his unsuspecting clients.

    Michael T. Pines is bankrupt, he can’t save HIS OWN 6 foreclosed properties, and it’s important to note: he’s not breaking into his OWN foreclosed properties. Attorney Michael T. Pines LOST HIS OWN HOME and LAWSUIT against EMC Mortgage (see decision below); and is about to lose his 6 other properties which he’s trying to protect in BK. Michael T. Pines not a foreclosure RELIEF expert, he’s a FORECLOSURE expert.

    I just read this online via this link: http://gadblog.srcar.org/2010/10/29/another-real-estate-scam-to-beware-of/
    “Recently, a judge called him out for filing frivolous lawsuits and slapped him with a $16,000 judgment that he owes one of his clients for wasting their time and money.”

    Michael T. Pines filed Chapter 11 Bankruptcy on January 11, 2010, he miserably represented himself and it was converted to a Chapter 7 Bankruptcy. Just GOOGLE “MICHAEL T. PINES” to see his background. To date, Pines has NEVER won a case against a mortgage company. Pines sued EMC mortgage regarding his own foreclosure and LOST. The judgments can be found online under UTAH COURTS or these links:

    and here:


    MICHAEL T. PINES has TWO Restraining Orders against him in San Diego County. You can find his Restraining orders on the San Diego County Sheriff’s website. Just type in “PINES” under *Restrained Last Name*. This is the Sheriff’s website:


    Pines’ foreclosed properties are as follows:

    1. 5 South 500 West Unit #1216, Salt Lake City UT 84101
    2. Case # 09-81657 – 1273 22nd Street, Ogden, UT
    3. Case # 09-81658-1246 South Meadow Run, Saratoga Springs, UT
    4.Parcel #010610036- 2336 Madison Ave. – Utah
    5.732 N. Coast Highway 101, Encinitas, CA 92024 – Law office building!
    6. Case # 1171481-21 Murphy Drive, Bella Vista, Arkansas

    Advice to the Bolanos, Earl & Rocha families:

    1- SUE MICHAEL T. PINES for his insane legal advice.

    2- File a California Bar Complaint against Pines. His bar # is 77771. You can get the form here: http://www.calbar.ca.gov/Attorneys/LawyerRegulation.aspx

    3- File a FEE DISPUTE with the State Bar of California:

    4- STOP using your home like an ATM, stealing money from the home and crying on TV like you are a VICTIM.

  26. nomadic Says:

    If even half of that last post is true, it’s hilarious in an unbelievable sort of way.

    Amen to summary point #4.

  27. anon Says:

    Desperate and unsophisticated people are fun to watch.




  29. Bite Back Says:

    Michael T. Pines needs to be reported to the State Bar (at least) for the damage he is doing to people. Instead of sticking to the business at hand, he is spending time staying in the news by erratic actions.

    His eMails are borderline literate. They are insulting and defamatory. He uses ethnic slurs. He admits to missing deadlines which have caused people to lose their homes. He advises clients to move back into their homes after they have lost them to foreclosure. He obviously gives bad advice.

    Why is someone of his ilk allowed to “act” as an attorney on anyone’s behalf? Why hasn’t he been disbarred?

    He is the definition of a meglaomaniac: “A psychopathological condition characterized by delusional fantasies of wealth, power, or omnipotence . . .” He has a non-validated, unreasonable opinion of his own value. His delusions of grandeur are hurting people and, so far, no one seems to be doing anything about it.

    If you have been in contact with this man, if he has taken your money and not performed as a professional, PLEASE report him to the state bar asap. People like him have to be stopped immediately. He has not been able to save his own six homes, which is is apparently losing to bankruptcy.

  30. Everett Says:

    Well for one thing a mortgage is a death pledge so why would they even call it a mortgage in the first place, and the other thing is a mortgage is a transfer of name only. There is no money to pay one inkling of anything so the people who moved back in. It was their house in the first place. Now you decide if they did the right thing?

Leave a Reply

Please be nice. No name calling, no personal attacks, no racist stuff, no baiting, etc. Let's be nice to each other in the true Bay Area spirit! (Comments may be edited/removed without notice.)