39 Michigan Homeowners Lose Homes In Equity Stripping / Home Improvement Loan Scam

In Detroit, Michigan, The Detroit News reports:

• The deceptions of Financial One LLC, a Delaware company, began with its name and didn't end until at least 39 people had lost their homes. Financial One wasn't in Delaware -- it was incorporated in Michigan. Those who walked through its doors in an office building in Lathrup Village looking for home improvement loans sometimes ended up homeless, with their equity stripped and their houses in foreclosure, according to state documents detailing the mortgage scheme.

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• The state issued a rare summary suspension of Financial One's license in February, citing "an imminent threat to the public welfare." Financial One's president, Johnnie Denham Jr., could not be located for comment this month by The Detroit News. An affidavit filed by state mortgage examiner Elliott Purty in support of the suspension of Financial One's license lists 39 homes -- 37 in Detroit -- where Financial One stripped $968,775 in equity out of the properties. Twenty-five of the homes are in foreclosure. "It sounds like they were making a living stealing people's houses," Day said. "They put together a group of rip-off artists to prey on people."

This story is an example that a homeowner need not be facing foreclosure to be victimized by an equity stripping scam. For more, see Equity skimming plagues region.

Editor's Note: In this case, there has been no reported prosecution of the scam artists. In a similar equity stripping / home improvement loan scam in which racketeering, conspiracy to commit racketeering, mortgage fraud, and grand theft charges were brought, see Florida Man Cops Plea In Combo Home Improvement Scam & Mortgage Fraud. foreclosure rescue