North Carolina Court Shuts Down "We Buy Homes" Equity Skimming Operation
The North Carolina Attorney General's Office reports:
They advertised their business through signs, mass mailings to targeted neighborhoods and a website that promised to buy consumers’ homes. The rent skimming / equity skimming allegedly occurred when they allegedly took title to property from the original owner without paying off an exsiting mortgage, subsequently rented the home to a tenant with an option to purchase, and then, while pocketing the rent payments unwittingly made by the tenants, they failed to make mortgage, tax and homeowner’s association payments on the homes, leading in some cases to foreclosure proceedings against the original owners. When the homes were foreclosed on, the tenants were also forced to leave and lost their deposit and their option to purchase a home.
Charlotte Home Solutions also used trust agreements when taking title to the homes (possibly under the mistaken belief that doing so avoids triggering the "due-on-sale" clause that may have been contained in the existing mortgage, or possibly, they were just trying to keep the mortgage lenders from finding out that the original owners transferred all their legal and equitable interests in the property). While the press release is silent as to this point, I must assume that the operators also used "assignments of beneficial interests" in connection with the trust agreements when having the original owner transfer his/her home to them.
For more, see AG Cooper ends Charlotte “We Buy Homes” scam (Charlotte Home Solutions scheme put homeowners in foreclosure, renters out on the street).
For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here. alpha
- "Attorney General Roy Cooper today announced the end to a scheme by a Charlotte company that promised to buy homes from people who needed to sell quickly but instead left them vulnerable to foreclosure. 'This scam hurt both homeowners and people who hoped to become homeowners,' said Cooper. 'We’ve put a stop to their phony ‘We Buy Homes’ promises so no more consumers will be caught up in this scheme.'"
They advertised their business through signs, mass mailings to targeted neighborhoods and a website that promised to buy consumers’ homes. The rent skimming / equity skimming allegedly occurred when they allegedly took title to property from the original owner without paying off an exsiting mortgage, subsequently rented the home to a tenant with an option to purchase, and then, while pocketing the rent payments unwittingly made by the tenants, they failed to make mortgage, tax and homeowner’s association payments on the homes, leading in some cases to foreclosure proceedings against the original owners. When the homes were foreclosed on, the tenants were also forced to leave and lost their deposit and their option to purchase a home.
Charlotte Home Solutions also used trust agreements when taking title to the homes (possibly under the mistaken belief that doing so avoids triggering the "due-on-sale" clause that may have been contained in the existing mortgage, or possibly, they were just trying to keep the mortgage lenders from finding out that the original owners transferred all their legal and equitable interests in the property). While the press release is silent as to this point, I must assume that the operators also used "assignments of beneficial interests" in connection with the trust agreements when having the original owner transfer his/her home to them.
For more, see AG Cooper ends Charlotte “We Buy Homes” scam (Charlotte Home Solutions scheme put homeowners in foreclosure, renters out on the street).
For other stories on tenants unknowingly renting homes in foreclosure, go here, or here, or here. alpha
posted by Home Equity Theft Reporter at 8:48 AM
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