Another Lawsuit In New London Alleged Mortgage Fraud Scam

In Connecticut, The Day reports:

• "A Waterford man whose housing complaint has garnered the attention of the Connecticut attorney general has filed a lawsuit in New London Superior Court seeking damages for real estate practices he calls 'fraudulent, oppressive, unethical, immoral and unscrupulous'. Luis Zayas, who told his story in The Day in May, purchased a $330,000 Waterford home in 2005 and is in severe debt and facing foreclosure. Zayas says the financing he received through New London loan originator Jose Guzman was based on bogus listed assets and income figures. The $81,000 worth of improvements he believed the house had received before the sale were faked as well, he says."

Named in the lawsuit are mortgage loan originator Jose Guzman, Zayas' then attorney Alan Messier; the seller, Juan Velez; the seller's attorney, Maurizio Lancia; the appraiser, Peter Kilbride; Royal Financial Services LLC, and Elizabeth Athan Real Estate in New London.

Guzman and other defendants named in the suit are also being sued by three other people who have similar claims. Connecticut Attorney General Richard Blumenthal is investigating the allegations and has said he is near to filing a suit. Meanwhile, several more people have come forward to both The Day and Blumenthal to claim they were victims of a scheme that includes purchasing houses in different names, redirecting profits and falsifying financial information in order to profit from the sale of houses in New London, Waterford and Norwich at the expense of the homebuyers and sellers.

For more, see Lawsuit Alleges 'Fraudulent' Real Estate Practices (Plaintiff Says He Was Targeted Because He Was A First-Time Homebuyer).

For story update, see Real Estate Offices Close Amid Lawsuits And Foreclosures (Alleged Predatory Lending Under Investigation By State) (TheDay.com - 8-29-07).

Go here for other posts on this investigation.