Wednesday, September 19, 2007

Massachusetts AG, Five Mortgage Lenders Reach Settlement In Alleged Foreclosure Rescue Scams

From The Massachusetts Attorney General's Office:
  • Attorney General Martha Coakley has filed a proposed settlement with the U.S. Bankruptcy Court in Boston with five mortgage lenders that funded loans which facilitated fraudulent foreclosure rescue transactions orchestrated by Brockton attorney Alec Sohmer. The Attorney General, together with the Chapter 7 trustee in Sohmer’s bankruptcy case, have requested bankruptcy court approval of the settlement, which impacts 26 residential properties that are part of Sohmer’s bankruptcy case. On Monday, the Attorney General filed a Motion to Amend the Complaint to add the closing attorney who conducted the transactions, another attorney who referred distressed homeowners to Sohmer in exchange for a fee, and a mortgage broker who arranged financing for many of the deals.

  • Under the terms of the proposed lender settlement, filed late last week, the lenders will pay restitution to the homeowners victimized by Sohmer’s fraudulent scheme by reducing the outstanding mortgage liens on the homeowner’s properties. As a result of these transactions, 26 homeowners transferred title of their homes to Sohmer. Under the terms of the agreement, the original homeowners can reclaim their property by paying a reduced mortgage obligation instead of the inflated mortgage loan arranged by Sohmer. In total, across 26 properties, the settlement would provide approximately $1 million in reduced mortgage obligations.

  • The lenders agreeing to the settlement to date are: First Horizon Home Loans; Option One Mortgage Corp.; Wells Fargo Bank, N.A.; America Brokers Conduit; and Ocwen Loan Servicing, LLC. Additional lenders may participate in advance of an October 15th hearing before the Bankruptcy Court.

For more, see the Massachusetts AG Press Release - Attorney General Martha Coakley Reaches Settlement With Five Mortgage Lenders Involved In Foreclosure Rescue Transactions; Expands Case To Include Four New Defendants.

See also, Coakley gets 5 to setttle, cites other loan brokers (Boston Herald).

For copies of the court documents referenced in the press release, see:

To obtain a copy of the settlement agreement entered into by the five mortgage lenders with the Massachusetts AG's office, you can either:

Go here for other posts on this case.

posted by Home Equity Theft Reporter at 9:33 AM