NYC Foreclosure Rescue Operator Target Of Federal Lawsuits

New York City foreclosure rescue operator Home Savers Consulting Corp. and Phil Simon have been the targets of two Federal lawsuits containing allegations of equity stripping involving the use of a "straw buyer" in connection with foreclosure rescue deals.

In one case, Johnson vs. Home Savers Consulting Corp., Phil Simon, et al., the allegations in the complaint state that:

• "After applying for what they believed was a refinance loan, plaintiffs discovered that Home Savers, through document trickery, misrepresentations, and outright fraud, had caused them to transfer ownership of their home to an “investor.” Unbeknownst to plaintiffs, the “investor” then mortgaged the property with Argent Mortgage Company for $425,000—a $182,000 increase over plaintiffs’ mortgage."

Neither Home Savers or Simon bothered to answer the allegations, and a default judgment was entered against them. According to the court docket, the victimized homeowners settled the lawsuit as it related to the mortgage lender involved in the transaction who was also named as a defendant in the case; and last week, the judge in the case entered an order against attorney Fred Way for actual and punitive damages of $10,000+ for his involvement in the transaction.

The victimized homeowners in this case were represented by South Brooklyn Legal Services, Brooklyn, NY; and White & Case LLP, New York City.

In another case, Phifer v. Home Savers Consulting Corp., the allegations in the complaint state:

• "After applying for what she believed to be a refinance loan, plaintiff discovered that Home Savers, through document trickery, misrepresentations, and outright fraud, had caused her to transfer ownership of her home to Wayne Griffith, the straw buyer, a person she had never met before. Unbeknownst to plaintiff, Home Savers then arranged for the straw buyer to mortgage plaintiff's home to Fremont Investment & Loan for $415,000--approximately a $170,000 increase over plaintiff's then existing mortgage on which she owed $245,000."

Neither Home Savers nor Simon have, as of yet, bothered to answer the allegations in this case, either. The litigation is currently ongoing and a motion for a default has yet to be filed against them.

The victimized homeowners in this case are represented by Oda C. Friedheim, Legal Aid Society, Queens of Kew Gardens, NY and Noah David Lang, of Seyfarth Shaw LLP, New York City.

Go here for other posts on foreclosure rescue operator, Home Savers Consulting.