Foreclosure Rescue Operator To Cough Up $690K+ To Resolve Arizona AG Civil Charges In Alleged Sale Leaseback Equity Stripping Scam

In a recent press release, the Office of the Arizona Attorney General announced the settlement of a civil lawsuit it brought against a local foreclosure rescue operator(1) who peddled sale leaseback arrangements to homeowners facing foreclosure, purportedly to help them avoid the loss of their homes.(2)

• In March, [Arizona Attorney General Terry] Goddard filed a lawsuit on behalf of his office and the Arizona Department of Financial Institutions against an alleged foreclosure rescue operation believed to have defrauded some 270 Arizonans of their homes. In the suit, Goddard alleged that between 2003 and 2007, Richard Winer, 33, of Tempe, through his limited liability companies - Taken Care of Investments, LLC; Homeowner Solutions, LLC; Bourbon Street Property Management, LLC; and Filibuster, LLC - victimized homeowners facing imminent foreclosure with fraudulent offers to help them stay in their homes.

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• According to court documents, Winer and his salespeople persuaded struggling homeowners to deed him their homes in return for assuming their monthly mortgage payments and paying off the full value of their delinquent payments. Winer charged homeowners a monthly fee equivalent to the mortgage payment to remain in the home as a renter. Neither the owner’s mortgage lender nor servicer was notified of the transfer of title.

• These owners-turned-renters had the option to repurchase the house from Winer within one year for a fee of approximately $15,000, if they met all of the conditions of the sale-leaseback agreement. If the owner-turned-renter violated any of the conditions, such as by making even one late rental payment, the option to repurchase the home became void and the individual was subject to immediate eviction. The State’s lawsuit claimed that homes obtained under this scheme were resold within two weeks to investors who paid a commission to Winer. Almost all of the owners-turned-renters proved unable to repurchase their properties, at which time the investor sold or refinanced the home at full market value, earning profits in the tens or, in some cases, hundreds of thousands of dollars.

For the press release, see Goddard Wins $1.37 Million for Consumers in Two Mortgage Fraud Cases.

For earlier post on this lawsuit, see 400 Sale Leasebacks Are Disguised Equitable Mortgages, Says AZ AG In Invoking State Consumer Fraud Act, TILA In Suit Against Foreclosure Rescue Firm.

For the related court documents in this case, see:

• Consent Judgment - State of Arizona v. Winer, et al.,
• Lawsuit - State of Arizona v. Winer, et al.

(1) According to the terms of the settlement, Richard Winer must:

• Pay $391,500 in restitution to homeowners victimized by their alleged scheme,
• Pay $150,000 in civil penalties to the Attorney General’s Office,
• Pay $150,000 in civil penalties to the Arizona Department of Financial Institutions,
• Refrain from participating in any manner in any financial institution or enterprise licensed by the Arizona Department of Financial Institutions.

(2) In similar settlements of lawsuits brought by other state Attorneys General in alleged sale leaseback, foreclosure rescue, equity stripping scams, see:

• Court Approves Massachusetts Settlement With Lenders In Bogus Foreclosure Rescue; Case Involved AG Claims Of Equitable Mortgage, Usury, Etc.,
• MD AG Wins "Rescue" Scam Civil Suit; Settles w/ Lenders Who Financed Bogus Sale Leasebacks, Saves Homes For Some, Clips Closing Agent For $100K.