Foreclosure Rescue Operator Violates State "Rescue" Statute; Court Invokes Equitable Mortgage Doctrine

A Minnesota Federal Court last week ruled that, in a sale leaseback transaction involving the home of a financially strapped homeowner and a foreclosure rescue operator, the rescue operator violated a number of provisions of the Minnesota statute regulating foreclosure rescue transactions, Chapter 325N.

Further, inspite of the fact that the sale leaseback transaction between the foreclosure rescue operator and the financially strapped homeowners did not involve any formal paperwork evidencing the existence of a consumer debt or mortgage , the court ruled that the evidence presented supported a finding that the sale leaseback of the plaintiff's home was an equitable mortgage, rather than a true sale leaseback.

For the longer version of this post, see Federal Court Finds Violations Of State "Foreclosure Rescue" Statutes; Invokes Equitable Mortgage Doctrine In Homeowners' Favor.

For the court's opinion in this case, see Jones vs. Rees-Max, LLC, et al. (Sept. 17, 2007).

Representing the homeowner in the Federal action were attorneys Kristine K. Nogosek and Robert B. Bauer, with the firm Severson Sheldon Dougherty & Molenda, PA., Apple Valley, Minnesota.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.). equitable mortgage yak