Investigative Report: Firm Uses Quit Claim Deed Home Transfers Into Trusts As Part Of Loan Modification Efforts

In San Diego, California, an investigative report by the San Diego Union Tribune attempts to shine light on one area loan modification firm:

• [E]dmundo Rubi now does business under the names Apocalypse Trust and Amerisian Trust. Since July, he and a pair of real estate brokers have persuaded more than a dozen desperate families in San Diego County to transfer ownership of their homes to the trusts as a way of saving them, a San Diego Union-Tribune investigation has found. So far, at least 23 individuals in California, Nevada and Arizona have signed over 35 properties, using a simple document called a quitclaim deed. No one contacted by the Union-Tribune has received a modified mortgage. Two have lost their homes to foreclosure.

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• The operation has similarities with Rubi's past businesses in that all focused on Filipinos in National City and Chula Vista. Federal prosecutors characterized Rubi's previous activities as a Ponzi scheme. Investors were told his companies would purchase U.S. government obligations at a discount and investors would get 6 percent returns monthly.

• Rubi pleaded guilty in 2005 to money laundering and conspiracy to commit mail fraud after swindling $25 million from about 425 people. He was sentenced to five years and 10 months in prison, and three years' supervised release. Rubi was let out in July, which is when many of the San Diego quitclaims to Amerisian and Apocalypse were filed.

• Officials with the state attorney general and San Diego district attorney would not comment on Amerisian or Apocalypse trusts, nor whether they are investigating them.

For more, see Empty promises (To avoid foreclosure, families put home ownership in felon-run trusts; not one loan has been modified).