Lehr Construction Corp. and four of its executives were indicted on charges of defrauding construction management clients of at least $30 million over the past 10 years, Manhattan District Attorney Cyrus Vance announced Wednesday.

Lehr allegedly stole money from its Manhattan clients from 1998 to 2010 by secretly shifting costs from the firm’s general-contractor projects to its construction-management projects, according to the Manhattan D.A.’s announcement.

“This construction company was corrupt at all levels,” Mr. Vance said in a statement. “Its executives developed—and successfully executed—a scheme to steal millions of dollars from their clients. Simply put, they used an over-invoicing scheme to steal from their construction-management clients, and then used general contractor jobs to recover the stolen funds.”

A spokeswoman for Lehr would not comment beyond the following statement provided by the firm’s attorney, William Schwartz, of the law firm Cooley LLP: “Having recently sought the protection of the United States Bankruptcy Court, Lehr Construction is confident that it will complete all of its projects and be able to pay all of its creditors and subcontractors notwithstanding these charges.”

Lehr, a 32-year-old firm, filed for Chapter 11 bankruptcy in February, citing the tightening of the credit market and the overall decline in the real estate market having an adverse affect on its business.

• share
• email
• Comment

Companies form Technology Partnership to Address Growing Trends for HD Quality Video, Social Networks and Chat to Connect Consumers and Businesses in a High Definition World.

Quanta Research Institute, the advanced technology research center of Quanta Computer Inc. (www.Quantatw.com), and ooVoo (www.ooVoo.com), the leader in providing high-quality, real-time video communication over the Internet, today announced a technology partnership that will for the first time turn any high-definition television (HDTV) or laptop computer into a simple high definition, multi person video instant messenger and chat screen.

The agreement between Quanta, the world’s largest laptop manufacturer, and ooVoo, one of the leading innovators of video conversation on the internet, calls for the creation of an advanced video-based chat system that brings real-time, face-to-face high definition communications to living rooms, laptops and offices. The technology promises to deliver true HDTV quality through a dedicated box or laptop that can be set up anywhere there is a common broadband internet connection and an HDTV display with the same ease as plugging in a webcam and launching a chat with a group of friends.

“The world is just beginning to realize the promise of high definition video as more and more HDTV sets are sold and more HD programming and content becomes available,” said CC Leung, vice chairman and president at Quanta Computer. “Quanta is delivering the highest-performing computer hardware platforms since 1988. We are now looking to the day when the benefits of high definition will move from a passive, entertainment-driven technology to one where connecting with friends and collaborating with colleagues is possible in HD. Whether at home, work or on the go, the promise of high definition video opens new possibilities when it is put in a social context. HD video chat is just the first step.”

“Quanta and ooVoo are now creating the next frontier in video communication over the Internet,” said Philippe Schwartz, CEO of ooVoo. “The promise of this technology is similar to the transition from standard television to high definition television- not only vastly improved quality, but the potential for delivering a totally new experience and service for consumers and businesses through their TVs and laptops. This partnership is a true reflection of ooVoo’s mission of enabling deeper, more meaningful and highest quality communication experiences between individuals and groups.”

The benefits of HD video conversations range from witnessing the smallest details of a friend’s newly renovated kitchen, or seeing the beauty of new grandchild come home for the first time to collaborating with colleagues on the finest details of a circuit board engineering project. When brought together in high definition, the possibilities for connecting with all kinds of social networks in new ways are far reaching.

Quanta plans to leverage its partnership with ooVoo along with its substantial manufacturing resources and global relationships in the computing and consumer electronics industries to develop the technology into a commercially viable product in 2008.

Inside The Technology

The Quanta and ooVoo system combines the latest in video compression/decompression technologies to deliver HD in a multipoint environment. The technology for HD video communication utilizes a high- throughput H.264 codec, with a minimum of only 512kbps bandwidth is required for one-way 720p video transactions at 30 fps. This low transaction data rate requirement makes true HD video chat possible for consumers, small and larger businesses with no need for a dedicated lease line.

The incorporation of ooVoo’s innovative software allows the Quanta/ooVoo technology to deliver a high quality multi-party video chat experience with low latency associated with video and voice over the internet and can provide improved quality of service, better lip synchronization, reduced video delay and clear audio.

• SocialEyes Launches Unnecessary Video Chat for Facebook
• Video Chat and Online Marketing – Building Business Relationships
• Video Chat Platforms – Choosing The One That’s Right for You
• Skype Live Mobile Video Chat App To Be Announced CES 2011?
• Vimeo To Launch Support for 1080p Full HD Video

Spread the word:

Learn more about: Video Technology, Web Video Industry News, h.264, high-definition, programming, social video

About the Author – Mark R Robertson
Mark Robertson is the Founder and Publisher of ReelSEO, an online information resource dedicated to the fusion of video, technology, social media, search, and internet marketing. He is a professional consultant, popular speaker, and considered to be a passionate leader within the online video and search marketing industries. Click here to contact Mark Robertson.

View All Posts By Mark R Robertson

 Real estate brokerage and franchise giant Realogy Corp. reported a $237 million first-quarter loss today, as interest expenses on the company’s massive debt outweighed improvements in operating income.

Realogy reported that excluding the costs of recent debt restructuring, its operating income — earnings before interest, taxes, depreciation and amortization, or EBITDA — rose 14 percent from a year ago, to $25 million.

The biggest components of Realogy’s loss were interest expenses on its $7.3 billion debt (which totaled $179 million), followed by depreciation and amortization expenses of $46 million. Realogy reported that it took a $36 million loss on the early extinguishment of debt in its restructuring.

Revenue for the quarter was up 1 percent from a year ago, to $831 million.

Most of that revenue came from 740 company-owned real estate brokerage offices, whose 43,000 sales agents generated $587 million in revenue, down 2 percent from a year ago.

Realogy’s company-owned brokerages, which are operated by NRT under the Coldwell Banker, ERA, Corcoran Group and Sotheby’s International Realty brand names, posted a cumulative $37 million loss for the quarter.

Real estate franchise services Realogy provides to independently owned franchisees and NRT brokerages generated considerably less revenue than the company-owned offices’ operations — $118 million — but were Realogy’s most profitable business segment, producing $62 million in earnings for the quarter.

The $118 million in revenue generated by franchise services includes $44 million in intercompany royalties and $45 million in marketing fees paid by company-owned real estate brokerages.

Realogy provides franchise services to independently owned brokerages, which operate nearly 14,000 offices with 217,000 agents worldwide under the Century 21, Coldwell Banker, ERA, Sotheby’s International Realty, and Better Homes and Gardens Real Estate brand names.

Closed home sales among Realogy franchisees were down 4 percent from a year ago, to 184,643. The average home-sale price climbed 3 percent, to $193,710, and the average broker commission rate held steady at 2.54 percent per transaction side.

The royalties Realogy collects from its franchisees on each transaction side were down $1 from a year ago, to an average of $251, as the net effective royalty rate declined 17 basis points to 4.87 percent.

(The net effective royalty rate represents the average percentage of franchisees’ commission revenues collected by Realogy, net of volume incentives achieved).

Company-owned real estate brokerages handled 51,200 transaction sides, down 3 percent from a year ago. Although the average home-sale price was down slightly, to $414,164, the average commission rate per side was up 2 basis points, to 2.5 percent, leaving gross commission income per side essentially unchanged from a year ago, at $11,188.

Revenue from relocation services was up 14 percent, to $87 million, and title and settlement services generated $83 million in revenue, up 28 percent from a year ago.

Both segments were profitable, with earnings from relocation services up 150 percent from a year ago, to $10 million, and title and settlement services generating $2 million in earnings compared to a $5 million loss a year ago.

In the relocation services segment, initiations were up 8 percent from a year ago, to 35,108, and referrals climbed 6 percent to 12,812.

The title and settlement services division saw business from refinancings climb 41 percent, to 16,826, more than offsetting a 5 percent decline in purchase title and closing units, to 18,971.

   

Between 1999 and 2009, the bank’s subsidiary, MortgageIT, got backing from the Federal Housing Administration for more than 39,000 loans worth more than $5 billion. In exchange, the firm was required to ensure that its lending met federal standards.

But, prosecutors say, the bankers “never held up their end of the bargain.”

“Borrower after borrower defaulted — often within just months of closing — because those loans were doomed to fail,” Preet Bharara, U.S. attorney for the Southern District of New York, said at a news conference.

As of February, the government had paid more than $386 million in insurance claims and other costs for loans approved by the bank that went bad. The complaint says the government expects to pay hundreds of millions of dollars more to cover bad loans underwritten by the bank.

Deutsche Bank responded saying that “close to 90 percent” of the activity covered in the complaint happened before it acquired MortgageIT in 2007. At the time, MortgageIT had been an approved FHA lender for nearly a decade, the bank said in a statement.

“We believe the claims against MortgageIT and Deutsche Bank are unreasonable and unfair, and we intend to defend against the action vigorously,” Deutsche Bank said.

The complaint paints a picture of a bank taking short cuts.

When an outside auditor found serious problems at MortgageIT, the concerns were “literally stuffed in a closet and left unread and unopened,” the complaint said. MortagageIT also failed to closely watch its own lending practices. At one point it reassigned its lone staff member in charge of auditing FHA-insured loans to churn out more mortgages, the complaint alleges. When the government found evidence the bank was violating requirements to check for the quality of the mortgages, MortgageIT promised to fix the problems and then did nothing.

The banks also repeatedly claimed eligibility for FHA loans that did not meet government rules, prosecutors said.

“While they promised to select qualified mortgages to be insured, they repeatedly abused that public trust by brushing aside the rules, lying about the quality of their underwriting operation, and passing on the costs of the inevitable hundreds of millions of dollars of defaults to the government,” said Bharara, whose office is also pursuing a major insider trading ring. “It wasn’t their problem anymore. The government held all the risks and, ultimately, was left holding the bag.”

The bank was also singled out in a report released last month by a U.S. Senate panel that investigated the causes of the financial crisis. That inquiry charged Deutsche Bank and Goldman Sachs with selling complex financial products filled with loans that traders at the banks viewed as being worthless.

“As alleged, MortgageIT and Deutsche Bank ignored every type of red flag and breached every duty of due diligence before underwriting thousands of federally insured mortgages,” Bharara said. “While the homes the defendants issued loans for may have been built on solid ground, the defendants’ lending practices were built on quicksand.”

Most Landlords Say They Would Rent to People Who Lost Homes to Foreclosure, The National Association of Independent Landlords Finds

LOS ANGELES, April 20, 2011 /PRNewswire/ — More than three-quarters (82%) of independent landlords say they would rent to someone who lost a home in foreclosure, assuming the applicant traditionally had good credit, according to a survey released today by The National Association of Independent Landlords.

“Landlords typically won’t rent to applicants with poor credit—and a foreclosure will absolutely slam someone’s scores. The exception is when they see people who have paid their bills their whole life, but lost their job, can’t meet their mortgage and must hand their keys back to the bank,” said Tracey Benson, president of The National Association of Independent Landlords.

Despite recent credit problems, Benson said, applicants with a foreclosure can prove good risks, chiefly because they did once own their own home: “These people are used to taking pride in where they live. Often, they lost their jobs and homes through no fault of their own.”

Increasingly, mortgage defaults stem more from lost jobs than ill-equipped borrowers who lost homes they never should have bought, Benson said. A thorough background check, like one conducted by The National Association of Independent Landlords, will indicate into which category an applicant falls—and whether financial woes are part of a recent spate of bad luck or a life-long trend.

“Because of this abundance of defaults, there is a greater need for rental property, so landlords should carefully vet applicants,” Benson said.

The National Association of Independent Landlords polled 563 members from March 21 through March 25, 2011.

About The National Association of Independent Landlords

The National Association of Independent Landlords is the country’s largest provider of services for small landlords.  Services include credit reports, electronic rent collection and tenant screening as well as information about property management, rental laws in all 50 states and other issues critical to property owners. Visit us at www.landlordassociation.com or call 800.352.3395.

SOURCE The National Association of Independent Landlords

Back to top

RELATED LINKS
http://www.landlordassociation.com

A Massachusetts man should be allowed to keep property he bought from U.S. Bancorp even though the bank didn’t have the right to foreclose on the previous owner, a lawyer argued before the state’s highest court.

The Massachusetts Supreme Judicial Court heard oral arguments today in the appeal of a lower-court decision that said the buyer of residential property in Haverhill, Massachusetts, never owned it because U.S. Bancorp foreclosed before it got the mortgage. If that decision is upheld it could have wide implications in the foreclosure crisis in which banks are accused of clouding home titles through sloppy transferring of mortgages. The high court will rule at a later date.

The lower court’s “statement that my client received nothing is what we disagree with,” Jeffrey Loeb, a lawyer for so-called third-party buyer Francis J. Bevilacqua III told the panel today.

The state high court already ruled Jan. 7 in a different case, U.S. Bank v. Ibanez, that banks can’t foreclose on a house if they don’t own the mortgage. That case didn’t address the status of those who buy property from someone after an invalid foreclosure.

“If the decision is upheld, and generally applied, it likely will have adverse implications for hundreds or even thousands of Massachusetts property owners if they find themselves in Bevilacqua’s shoes,” the Mortgage Bankers Association wrote in a friend-of-the-court brief.

Bundled Mortgages

Claims of wrongdoing by banks and loan servicers triggered a 50-state investigation last year into whether thousands of U.S. foreclosures were properly documented during the housing collapse.

Bevilacqua’s case could affect trusts that bundled mortgages and sold securities to investors. Like the Ibanez case, the court’s decision may resonate with other states as they grapple with the rights of new homebuyers who may hesitate to complete a purchase for fear of uncertain title. That may be especially so in states such as Massachusetts that don’t require court action to seize a house.

“The Massachusetts case will have significant repercussions in many states that allow nonjudicial foreclosure,” Alan White, a law professor at Valparaiso University in Indiana, said in an April 27 e-mail. “The decision in Bevilacqua will not only determine the fate of past foreclosure sale deeds, but hopefully provide guidance so that lenders and their lawyers can get it right going forward.”

Four Condominiums

The Ibanez and Bevilacqua cases both originated before Massachusetts Land Court Judge Keith C. Long in Boston.

Bevilacqua went to Long’s court to force the original owner to say whether he had a claim on the property. A city assessment website lists four condominiums at the location with four separate owners and a total value of $600,300.

In August, Long ruled that Bevilacqua wasn’t the property’s owner and didn’t have standing to inquire about claims. U.S. Bancorp, which oversees the mortgage-backed trust containing the loan, conducted an invalid foreclosure because it didn’t properly own the mortgage when it sold the property to Bevilacqua in 2006, Long said. The mortgage was assigned to it after the foreclosure sale by Merscorp Inc.’s Mortgage Electronic Registration Systems, a national database of mortgages.

All Bevilacqua had was a deed from an invalid foreclosure sale, the judge said.

‘Try-Title’ Statute

The servicer of the mortgage-backed trust the loan was in would have handled the foreclosure and sale, not U.S. Bancorp, Teri Charest, a spokeswoman for the Minneapolis-based bank, said in January. U.S. Bancorp isn’t a party to the Bevilacqua case.

In their appeal brief, Bevilacqua’s lawyers argue that Long confused requirements for the law used to prove one’s title to a property with those for the law their client sued under, the so- called try-title statute, through which one party seeks to force another to assert or waive a potential claim on the property.

Loeb, Bevilacqua’s lawyer, at Rich May PC in Boston, told the court today that his client had the right to bring the try- title case because he had “record title” to the property through the deed he got from U.S. Bancorp.

Richard A. Oetheimer, a lawyer at Goodwin Procter LLP in Boston for the mortgage bankers’ group, also argued today that Bevilacqua had record title.

Bevilacqua should have been aware that U.S. Bancorp didn’t have the right to sell the property to him when it did, Max Weinstein, a lawyer with the WilmerHale Legal Services Center of Harvard Law School, told the court.

‘Innocent’ Purchaser

“It matters not that you are the most pure-hearted and innocent of purchasers,” Weinstein said.

“While Mr. Bevilacqua’s situation engenders some sympathy, he lacks standing to bring a try title action,” Massachusetts Assistant Attorney General John M. Stephan told the court.

Justice Robert J. Cordy asked Stephan about the potential of thousands of people buying mortgages after faulty foreclosures that had been transferred many times.

“They are all void and that’s a situation that you’re comfortable with?” Cordy asked.

Stephan said there are other remedies available. A common one the state has seen is the original borrower giving a release to the third-party purchaser. Other possibilities are suing the bank or other party that sold the property after an invalid foreclosure, conducting a second and proper foreclosure against the defaulting homeowner or using a Massachusetts law that grants ownership of a property after possessing it for three years, Stephan said.

“My client wants the property,” Loeb said in response to a question from Justice Ralph D. Gants about the possibility of Bevilacqua canceling his purchase.

The case is Bevilacqua v. Rodriguez, 10880, Supreme Judicial Court of Massachusetts (Boston).

To contact the reporter on this story: Thom Weidlich in Brooklyn, New York, federal court at tweidlich@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.