Colorado AG Obtains $1.1 Million Judgment Against Foreclosure Rescue Operator

This 2003 case illustrates how far state Attorneys General can go in going after fraudulent foreclosure rescue operators. These operators have been put out of business and have agreed to pay over $1.1 million in restitution to approximately 80 homeowners.

According to the allegations in the original complaint filed by the Colorado Attorney General:

• the "rescue" operators, through their unlawful foreclosure "rescue" program, acquired title to over 100 homes from homeowners facing foreclosure under the guise of "rescuing" their homes from foreclosure,

• the estimated market value of the homes in the Denver metro area exceeded $15 million,

• the homeowners were misled into signing over title to their homes in exchange for defendants advancing money for back-payments to bring their mortgage payments current and unwittingly became renters in their own home,

• the homeowners then leased their homes back from defendants with an option to repurchase their houses at an inflated price,

• consumers believed these complicated transactions were second mortgage loans and not the sale of their homes,

• within months, numerous homeowners were evicted after entering the "rescue" program,

• consumers were targeted through door-to-door solicitations and direct mail flyers advertising their "rescue" program as “absolutely free” and with “no cost to you,”

• in-home sales presentations were made to homeowners through high-pressure sales tactics aimed at convincing the homeowners that defendants’ "rescue" program" would allow families to stay in their homes, rebuild their credit, and keep their monthly payments low,

• homeowners were required to transfer title to their homes by quit claim and warranty deeds to the defendants and enter into lease option agreements obligating the homeowners to monthly rental payments sometimes hundreds of dollars more than their original mortgage payment,

• any missed rent subjected the homeowners to eviction and loss of equity,

• defendants would arrive at the homes with numerous contracts, deeds, and other pre-printed documents, ready to transact business,

• once the homeowner signed as instructed defendants would take the papers and refuse to leave any copies,

• homeowners were not given the opportunity to confer with advisors or to rescind the loan transactions within three business days, nor to cancel their credit repair service contract within five days, both rights of cancellation afforded by Colorado law,

• neither of these rights was disclosed to the homeowners, as required by law. The homeowners were not given numerous other disclosures of their rights, such as their right to redeem the foreclosure, stay in their home 75 days after foreclosure, and the ability to sell their property even after foreclosure,

• promises of credit repair were unfulfilled and homeowners were unable to refinance their homes, as they no longer had title to their properties.

Of the 120 homeowners who participated in the "rescue" program, approximately 30 retained private attorneys to settle their claims against the foreclosure operators.

For ColoradoAttorney General's 8/07/2003 News Release, click here.

For ColoradoAttorney General's 12/22/2003 News Release, click here.

For ColoradoAttorney General's 12/19/2001 News Release, click here.

For text of the Colorado Attorney General's Original Filed Lawsuit, click here.

California Prosecutors Add 26 Charges Against Alleged House Swindling Trio

Three defendants, already facing numerous criminal charges involving a "foreclosure rescue" operation, will now be facing 26 additional charges, according to this report at modbee.com (The Modesto Bee).

Prior reference to this case in this blog was made in my November 21 post.

Links to prior articles on this case:

1. Novenber 21, 2006
2. November 17, 2006
3. July 4, 2005

FBI Report on Unlicensed Home Improvement Contractors

This report, found in the November, 2005 issue of the FBI Law Enforcement Bulletin (Volume 74, Number 11), discusses the problems posed by unlicensed home improvement contractors from the perspective of a law enforcement officer. The report, while directed to law enforcement professionals, gives the average consumer insight as to how he can deal with problems arising from hiring an unlicensed contractor.

The author of the report, retired FBI agent George Lyford, was serving as the director of investigations for the Nevada State Contractors Board in Henderson, Nevada when his report was issued.

Family Friend Pleads Guilty to "Equity" Scamming Disabled Philadelphia Family

According to a report by Channel 6 in Philadelphia (WPVI-TV), and reported here at 6abc.com, a family friend, who had volunteered to help a disabled Northeast Philadelphia family, has pled guilty to illegally obtaining a loan secured by the home of that family without their knowledge.

See related stories from the Philadelphia Daily News (no longer available online):

• Hard life, heartless acts and a home, safe (12-1-06),
• You showed your love & restored their trust (12-6-06).

Maryland Woman Signs Over Home For $7,000 To "Rescuer"

In a story originally reported in The Daily Record (Baltimore, MD) and can be found here, a Maryland woman was thrilled to have her home "rescued" from foreclosure, that is, until she found out that she no longer owned her home.

Virginia Homeowner Unknowingly Deeds $230,000 Home To Foreclosure Rescuer For $16,000

In a story originally reported in the Richmond Times-Dispatch, and can be found here, a Virginia homeowner facing foreclosure had no idea he sold his home to a foreclosure rescue operator until he saw a "For Sale" sign in his front yard one morning.

"As many as 17 homeowners in the Franklin area may have lost their homes because of foreclosure scams", according to local consumer activist Paula Sherman.

Virginia Group Declares War On Foreclosure Rescue Scams

This artcle, at TimesDispatch.com (Richmond Times-Dispatch) reports of an effort by a local non-profit group who took to Richmond city streets to remove signs connected to foreclosure rescue schemes.