Victimized In Equity Stripping Scam, Minnesota Couple In Foreclosure Now Fight Feds In Attempt To Avoid Being Booted From Home

In Golden Valley, Minnesota, the Star Tribune reports:

• Raise your hand if you've heard something like this before: A couple looking to save money in tough times refinanced their home -- only to discover they'd been taken in by fraud.(1) Now they are fighting foreclosure and the loss of their home. What you probably haven't heard before is that they are being foreclosed on by the Federal Deposit Insurance Corp., a federal agency that generally pushes to keep people in their homes by reworking loans rather than foreclosing them. So Glenn and Brenda Clark of Golden Valley are taking another unusual step -- they are fighting their foreclosure in federal court.

For more, see Victims of mortgage scam fight foreclosure in court (A Golden Valley couple take their case to federal court to avoid eviction).

(1) The homeowners in this story were reportedly ripped off in an equity stripping scam by Michael Fiorito, 41, who a federal jury convicted in May, 2009 on seven criminal counts in connection with a scheme that targeted vulnerable homeowners, according to the story. Working with an assistant, he reportedly devised a program to defraud homeowners who were in foreclosure or behind on their payments. He and the assistant convinced homeowners to refinance their homes -- often after inflated appraisals -- and then stole some or all of the equity checks the homeowners were to receive, the story states. In all, Fiorito reportedly stripped more than $400,000 in equity from at least 17 victims, and is scheduled to be sentenced in federal court on Dec. 30.