Foreclosure Rescue Operator Violates Federal Law, State Usury Law
A Michigan Federal Court has ruled that a foreclosure rescue operator violated two Federal laws as well as the state usury statute when entering into a "lease buyback", foreclosure bailout arrangement with a financially distressed homeowner.
Moreover, the court, in invoking Michigan's "equitable mortgage" doctrine, declared the homeowners as being the true owners of the home involved in the transaction, in spite of the fact that they actually signed over the ownership of the home to the rescue operator. The court declared the rescue operator to be merely a secured lender in this arrangement, thereby disregarding the fact that all the documents signed between the operator and the homeowners pointed to the operator as having title ownership to the home involved and the homeowners as being mere tenants.
Representing the property owner in this case was attorney Phillip C. Rogers, Grand Rapids, Michigan. Mr. Rogers is a member of the National Association of Consumer Advocates.
This case, which I alluded to in an earlier blog post, is available here (Michigan Bar Association website; no registration necessary) and is also available here (U.S. District Court for the Western District of Michigan website; PACER registration, login and password necessary).
A summary and comment on this case is available from the online newsletter of the Michigan law firm Lipson, Neilson, Cole, Seltzer & Garin, P.C., (see the caption title Court Clobbers Foreclosure Rescue Plan).
My highlights of this court decision can be found here.
Click here for list of other equitable mortgage blog posts
Case Law Citation:
Moore v. Cycon Enterprises, Inc., (Case No. 1:04-CV-800), 2006 U.S. Dist. LEXIS 57452 (W.D. Mi. 2006) (unpublished) (click here for case) or you can access the Michigan Western District Federal Court website directly by clicking here for case (requires PACER registration, login and password)
Note:
If there is an "equitable mortgage" doctrine in other states that can be interpreted similarly to the one in this Michigan case, this may be a great way to attack those transactions by and between rescue operators and financially strapped homeowners where the operators walk away with all of the homeowners' equity and the homeowners wind up either having to pay excessive amounts to re-purchase their homes or being evicted from their homes.
revised 1-12-07
Moreover, the court, in invoking Michigan's "equitable mortgage" doctrine, declared the homeowners as being the true owners of the home involved in the transaction, in spite of the fact that they actually signed over the ownership of the home to the rescue operator. The court declared the rescue operator to be merely a secured lender in this arrangement, thereby disregarding the fact that all the documents signed between the operator and the homeowners pointed to the operator as having title ownership to the home involved and the homeowners as being mere tenants.
Representing the property owner in this case was attorney Phillip C. Rogers, Grand Rapids, Michigan. Mr. Rogers is a member of the National Association of Consumer Advocates.
This case, which I alluded to in an earlier blog post, is available here (Michigan Bar Association website; no registration necessary) and is also available here (U.S. District Court for the Western District of Michigan website; PACER registration, login and password necessary).
A summary and comment on this case is available from the online newsletter of the Michigan law firm Lipson, Neilson, Cole, Seltzer & Garin, P.C., (see the caption title Court Clobbers Foreclosure Rescue Plan).
My highlights of this court decision can be found here.
Click here for list of other equitable mortgage blog posts
Case Law Citation:
Moore v. Cycon Enterprises, Inc., (Case No. 1:04-CV-800), 2006 U.S. Dist. LEXIS 57452 (W.D. Mi. 2006) (unpublished) (click here for case) or you can access the Michigan Western District Federal Court website directly by clicking here for case (requires PACER registration, login and password)
Note:
If there is an "equitable mortgage" doctrine in other states that can be interpreted similarly to the one in this Michigan case, this may be a great way to attack those transactions by and between rescue operators and financially strapped homeowners where the operators walk away with all of the homeowners' equity and the homeowners wind up either having to pay excessive amounts to re-purchase their homes or being evicted from their homes.
revised 1-12-07
posted by Home Equity Theft Reporter at 7:08 AM
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