Homeowner, Straw Buyer Settle Suit In Sale Leaseback Foreclosure Rescue Deal

In Northern New Jersey, The Star Ledger reports:

• Two years ago, Florine Williams, a nurse's aide, feared losing her Bloomfield duplex after falling behind on payments for the $259,000 mortgage. So, Williams went to a nearby business service company, which referred her to a mortgage broker. It was the beginning of the end for Williams, who became ensnared in an elaborate mortgage fraud scheme that left her broke and forced her out of her dream home.

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• Williams arranged through an agent of A&E Mortgage to temporarily sell her home to attorney Novlet Lawrence, who agreed to sell it back to Williams for $350,000 after a year, as long as Williams paid enough to cover the mortgage, taxes and insurance for the property. As part of the $350,000 price, Williams agreed to pay Lawrence $18,000 at closing and to give $16,200 to A&E Mortgage for fees and commissions.

• Williams tried to purchase the home back in March 2007, but got an eviction notice instead because Williams had stopped making monthly payments a few months earlier when rent increased from $3,500 to $3,860 to cover flood insurance. Lawrence, who recently settled a lawsuit filed on behalf of Williams by Essex-Newark Legal Services, said "the allegations are false" but declined further comment.

For the story, see Lawsuits target mortgage fraud (State AG announces cases against 3 firms).