Desperation has led some of these homeowners to pay thousands of dollars to people who are not lawyers to help prepare their cases. Others hire attorneys in lawsuit mills that aggressively solicit for clients.

“It’s the new scam,” said Tom Layton, an investigator for the State Bar of California.

The number of lawsuits filed by individuals against banks and mortgage companies in the Sacramento region has more than doubled, rising to about 250 in the last six months, up from about 115 from the same period two years ago, according to a Bee review of court records in Sacramento and Placer counties.

Many of the lawsuits are filed by frustrated owners tired of dealing with banks that repeatedly transfer calls or reject loan modifications after a successful trial.

But homeowners don’t always know what they’re getting into when they go to court. Some unscrupulous operators, Layton said, are charging large fees for little work.

The Legislature barred lawyers and non-lawyers alike from charging upfront fees to file a loan modification; however, there is no ban on collecting such fees for preparing a lawsuit.

“Now we’re seeing the loan mod people morph into the sue-your-bank people,” Layton said.

Stephen C. Ruehmann, a Folsom lawyer who has filed dozens of recent lawsuits against lenders, agreed that some people are taking advantage of homeowner desperation. Others, though, are fighting for homeowners who have no other recourse.

“(Banks) don’t have any motivation to change; they’ve already been bailed out,” Ruehmann said.

Local judges, though, have traditionally been resistant to these types of fraud claims. In Sacramento County, 20 of the 24 homeowners who sued their lenders in Superior Court during a six-month period exactly two years ago have since lost their homes, according to court records and Foreclosures.com, a tracking firm.

Thirteen of those homeowners represented themselves in court; twelve of the 13 have lost their homes.

Despite that record, the trend of homeowners representing themselves has accelerated. More than 50 local residents who filed lawsuits during the past six months don’t have counsel.

“It’s a sad situation,” said Lawrence Green, professor of law at the University of California, Davis. “People not represented by a lawyer face a much harder time prevailing.”

Man paid paralegal $5,500

Sacramento resident Charles Ratliff is among those going it alone. He paid a Southern California paralegal $5,500 to prepare a complaint against IndyMac and others.

He filed his complaint in January. A judge denied his request for an order to stop the foreclosure, saying he was unlikely to win his case. The bank repossessed his house in March.

Ratliff said he regrets filing his lawsuit, which has sat dormant since he lost his home. “I fault myself,” he said.

He said he was introduced to the paralegal, Camilla Williams, by Sacramento real estate agent Kathleen Petroff, who was working with him on a short sale.

Petroff said she also introduced another one of her clients, Bay Area resident Clifton Constantine, to Williams, but never vouched for the paralegal’s services. She said she took a one-time payment of $200 from Williams but turned down an offer from Williams to pay her $500 per referral.

“I told them all, ‘It’s your own choice,’ ” Petroff said of her clients.

Reached by phone, Constantine said Williams wanted more than he could afford to prepare a lawsuit against American Home Mortgage Servicing and North American Title Co.

“She said, ‘Cliff, I’ve been praying about this and I want to help you guys,’ ” he said.

Even with an initial discount, Constantine said he wound up paying Williams more than $20,000 for his case in San Francisco Superior Court. The judge issued a preliminary ruling for Constantine’s lenders, but has given him a chance to amend his complaint.

Jim Towery, the State Bar’s chief trial counsel, said people without a law license should not be preparing lawsuits. “It is illegal,” he said. “It falls under the category of the unlicensed practice of law.”

In a brief phone interview, Williams declined to answer questions about her business, including how many clients she has or where she received paralegal training.

“I haven’t done anything illegal,” she said.

When informed of Towery’s comments, Williams said, “I’m not even aware of any law like that.”

While homeowners such as Ratliff and Constantine have tried to fight the banks on their own in court, others have turned to law firms that specialize in such cases.

Sacramento resident Maria Montoya-Cano, for instance, has been paying $1,500 a month to the Roseville-based United Law Center to pursue a fraud case against her lender.

Montoya-Cano, who filed her case in late October, alleges her mortgage officer and bank incorrectly told her the only loan she could get had an adjustable rate. That rate has since reset to an untenable level, she said.

The bank that gave her the loan went under in 2008. Her original mortgage broker said her case lacks merit.

A judge recently ruled against her request for an injunction against the current holders of her loan, saying Montoya-Cano’s case has little chance of success.

So Montoya-Cano has filed for bankruptcy protection to save her home. She’s selling a few rental properties she owns at rock-bottom prices to help pay her legal bills and other debts. She’s also taking care of her ailing mother and preparing for the return of her Marine son from Afghanistan.

“He told me not to worry – that he would find a job and help me out,” she said.

Montoya-Cano said she is happy with United Law Center’s representation. Her lawyer did not return a call for comment. Asked why she continues to pursue her case, Montoya-Cano said, “I’m just not through fighting. We can’t let the banks get away with this.”

False claims usually alleged

Lawsuits against lenders generally are based on the same argument: Banks and mortgage brokers made false claims during the boom, telling borrowers they could easily refinance their loans before interest rates reset, or didn’t disclose the true terms of loans.

The lawsuits often allege that lenders knew these statements were untrue, but were interested in making a quick buck by selling the mortgage on the secondary market.

Some of the lawsuits also allege that banks set conditions for trial loan modifications, then denied those modifications even after borrowers met the conditions.

Legal experts contacted by The Bee said it’s hard to prove fraud claims, even though dubious lending practices were widespread during the real estate boom.

“After all, borrowers typically did sign loan applications, escrow instructions, promissory notes, trust deeds and disclosures,” said Green, the UC Davis law professor.

Another obstacle facing borrowers is that it’s tough to prove a fraud conspiracy between the mortgage brokers, banks and investors.

Even if a bank committed fraud while giving a loan, the investors who bought that loan on the secondary market aren’t liable if they didn’t have direct knowledge of the fraud, said John Sprankling, a professor at the University of the Pacific’s McGeorge School of Law.

And if the loan holders aren’t liable, the homeowner likely doesn’t have a shot of keeping the house.

The response of banks to these lawsuits is often uniform. They say that even if everything in the complaint is true, it doesn’t constitute fraud. They file a request, usually successful, to dismiss the case or deny an injunction keeping the bank from taking a home.

Michael P. Malloy, a McGeorge professor, said judges may be more amenable to fraud lawsuits after a spate of “robo-signing” scandals revealed some lenders’ shoddy foreclosure practices.

“The courts are going to take their time and not treat these cases as routine,” Malloy said.

But, like other legal experts, Malloy cautioned that proving mortgage fraud takes a lot of work, and is tough to do without records outlining false promises.

“If all you have is a batch of paperwork and a vague recollection of what someone said to you, you have a real tough road ahead,” he said.

I believe defining oneself is difficult. Am I the way I am because of my genes? How about my personality and where did that come from? What about parents, family life and culture? Could society be a factor? Education? Do we ever stop becoming who we are?

Trying to define one’s self can bring about many interesting memories.

To this day, I actually remember playing at daycare with my brother and the other children. I credit my babysitter with giving me courage. I remember playing with my younger brother and I thank him for teaching me love. I have been a fairly independent person and I thank my father for that trait. And, my mother, I thank her for many things, but her greatest influence was purpose. She would refer to the 211 degree theory. 211 degrees is hot water – adding one more degree to that water can power a locomotive! Be your best, have a purpose.

Along with my Cousin Mike and his wife, Randi, I recently attended this year’s super bowl in Texas and made some great memories while rooting on our team, the Green Bay Packers. As I reflect on the time I have spent with Mike over the years, I realize that he has been such a great mentor to me, and the time I have spent with him has helped develop the best parts of the man I am today. Mike is an entrepreneur with a strong sense of leadership. Every time we converse, I learn something – he helps me grow by sharing his ideas and experience. Both Mike and Randi have inspired me to one day have a family as wonderful as theirs. I thank Mike and Randi for the super bowl memories, but most importantly, I thank them for helping shape my character.

Today, I want to thank all of you who made me …….ME. All of you have played a huge role in what makes me ME.

Take a few minutes this week to remember fond memories of people and experiences that have shaped you into the person you are today. Take time to thank those who are, or have been, a part of your life. Call that special high school teacher or that coach that positively influenced your life. What about your former neighbor from long ago, or your uncle who you haven’t talked to for such a long time?

The more we reflect on the people and experiences that have helped shape who we are, the better we can define what makes us the best of who we are today.

Here is a video that my marketing department did on my cousin, it is pretty funny.

This is the remix video he made. Thanks Nate!

Tyler Smith % Team make TOP 50 IN THE NATION

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More people bought pricier houses in April, signaling the end of Sacramento’s bargain basement-only sales scene.

Buyers picked up the pace from last year in Granite Bay, El Dorado Hills and older neighborhoods near downtown Sacramento, researcher MDA DataQuick reported Thursday. Simultaneously, buyers dwindled in Oak Park, North Highlands and other repo zones of the past two years.

What gives?

There are fewer available repos after a long blowout sale, market trackers say. There’s also a sense at the higher end that this market is as good as it’s going to get for a while.

He said he sold three houses this week valued between $350,000 and $800,000.

The shifting sales mix tugged Sacramento County’s median sales price for resale houses nearly 10 percent higher than the same time last year, DataQuick reported. The median, where half cost more and half less, was $175,000.

Resale home prices also beat April 2009 levels in Placer, Sutter, Yolo and Yuba counties.

Less than half of Sacramento County’s April sales were cheap bank repos – compared with two-thirds a year earlier. With fewer repos this year, sales in the $200,000 to $400,000 range grabbed a larger market share.

“We’ve had 70 people coming through open houses in the $300,000 to $400,000 range,” said Bob Bronswick, president of Coldwell Banker Residential Brokerage in Sacramento and Lake Tahoe.

“That’s the trend across the state,” said DataQuick analyst Andrew LePage. He said sellers are cutting prices and buyers are still getting low interest rates to make deals work.

Sellers are not thinking about 2005. They’re thinking: ‘We might have to take it back to 2003 or 2002 prices and sell it at that.’

This doesn’t mean expensive is back. LePage said homes priced above $400,000 are only a tiny percentage of Sacramento-area sales.

But the shift is part of restoring balance to a market where repos accounted for a majority of sales for much of 2008 and 2009. Banks have cut repossessed homes on the market.

“The way banks are managing it now will probably keep prices from falling much further,” said Rick Sharga of Orange County foreclosure analyst RealtyTrac.

Overall, 3,255 homes changed hands during April in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, DataQuick reported. That was down slightly from March – and fewer than April 2009.

Analysts attributed the slight drop to fewer repo listings for first-time buyers and people delaying escrow closings until May. The state began offering homebuyer tax credits of up to $10,000 May 1.

New homes accounted for 5 percent of sales in the region.

The Housing Group Fund, small-scale local builders, remodeled the house, and SMUD turned it into a energy efficient model demonstration project.It’s a tiny piece of the $3.9 billion federal Neighborhood Stabilization Plan that sent $32 million to Sacramento County earlier this year.

The Sacramento Housing and Redevelopment Agency contributed $86,000 from the allocation to bring back a house nearly destroyed on its way to foreclosure. Said Diana Tate at a ribbon cutting marking the accomplishment Thursday: “It’s been a long time coming.”

In another moving scene, husband Ken said they’d looked at houses for a year.  ”We finally finished the race,” he said.

Here’s a look at the ribbon cutting held in their front yard:

 Spokesman Rick Weinberg of the Real Estate Disposition Corp. said the lowest price was $30,000 received for a house in Stockton. It original housing boom high: $290,000.

The highest-priced house sold Saturday was a 3,418 square-foot giant in Santa Rosa for $714,286. It last sold for $1.1 million.

Weinberg pointed to a couple of Sacramento examples, too:

3324 Felham Way sold for $126,000, 72 percent off its housing boom high value of $450,000.
6408 Calvine Road sold for $73,500 – also 72 percent less than its original high.

REDC says it’s auctioned 19,000 houses nationally so far this year – for $1.3 billion.

Here’s the regional tally:
UCTION SALES
Irvine-based Real Estate Disposition Corp. has auctioned  2,045 Sacramento-area foreclosed homes for $272.9 million since mid-2007:

2007
June 23: 107 homes, $26.5 million
Sep. 29: 144 homes, $22.4 million
Sep. 30: 134 homes, $18 million

2008
Feb. 16: 174 homes, $28.7 million
Feb. 17: 125 homes, $23.6 million
April 19: 169 homes, $20.7 million
April 20: 147 homes, $21.6 million
July 12: 197 homes, $23.4 million
Sep. 20: 183 homes, $21.6 million
Dec. 6: 191 homes, $19.1 million

2009
Feb. 14: 179 homes, $18.7 million
April 19: 162 homes, $17.1 million

July 11:  133 homes, $11.5 million 

Source: Real Estate Disposition Corp.