Another Maryland Foreclosure Rescue Operator Tagged With Lawsuit

From the Office of the Maryland Attorney General:

• Maryland Attorney General Douglas F. Gansler announced today that the Consumer Protection Division has filed a complaint in Baltimore City Circuit Court against a group of individuals and companies alleging they violated numerous laws in the course of providing services to homeowners who were facing foreclosure.

• The complaint names Michael K. Lewis, Earnest Lewis, Cheryl Lynn Brooke, Winston Thomas, and two companies, In the House Technologies based in Upper Marlboro and Cornerstone Title & Escrow based in Laurel. The Division alleges that the defendants market their services to homeowners who are facing foreclosure or are in foreclosure, falsely promising that they can help save the consumers’ homes. Instead of helping homeowners retain title to their homes, the defendants attempt to take title and then strip the equity out of the properties by charging the homeowners numerous undisclosed fees.

• After the defendants purportedly take the title to the homes, they charge the homeowners rents that are substantially higher than their previous mortgage payments. As a result, the homeowners find it exceedingly difficult to rebuild their credit and save amounts sufficient to retain their homes. The scheme results in homeowners losing both their homes and the vast majority of equity they had accumulated.

• The complaint seeks to stop the defendants’ unlawful practices and impose fines for violations of the Protection of Homeowners in Foreclosure Act and the Consumer Protection Act. It also was filed to ensure that the original homeowners retain title to their homes and to provide restitution for homeowners who were harmed by the defendants’ actions.

Source: Maryland AG Press Release: Attorney General Files Complaint against Foreclosure Service Providers.

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In an article in The Baltimore Sun, the story of one alleged victim of the foreclosure rescue plan is described, in which after the purported rescue, her monthly payments more than doubled, she ultimately defaulted on her payments, and felt compelled to move out because of a foreclosure action pending against one of Michael K. Lewis' straw buyers. The Maryland AG was able to halt the foreclosure, but the alleged victim said she is afraid to move back in. She has put her furniture in storage and is living with her sister.

An excerpt from the story:

• Michael Lewis said he and [his brother] Earnest were lured into trying to help bail out credit-poor homeowners who were unable to refinance their loans. "This was a good deed gone wrong," Michael Lewis said. Lewis said he runs an office that helps clients straighten out their finances and get started running home-based businesses to boost their income.

For more, see State alleges home aid ruse (Complaint says foreclosure advice victimized owners) (if link expires, give this link a shot) (these links no longer available online).

Editor's Note: All this comes on the heels of federal agents seizing documents, papers and computers from Michael K. Lewis last week in what apparently is a separate investigation of his foreclosure rescue business (see Feds Seize Business Records Of Baltimore-Area Foreclosure Rescue Operator).

See also:

• WBAL-TV Investigates Another Baltimore-Area Foreclosure Rescue Operator, a July 19, 2007 post on a TV report on Michael K. Lewis and his foreclosure rescue operation by local Channel 11 investigative reporter Barry Simms.
• Title company investigated on foreclosures (Laurel Leader, 11-8-07) (link no longer available online).

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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.).