Sunday, November 28, 2010

85-Year Old Victim Of Convicted Sale Leaseback, Equity Stripping Peddler Temporarily Dodges The Boot As Judge Grants '11th Hour' Stay Of Eviction

In Winter Park, Florida, the Orlando Sentinel reports:
  • In an unfortunate era marked by foreclosures, short sales and evictions, thousands of distressed Central Floridians struggle every day to hold onto their homes. Genevieve Barbour is one of them. The 85-year-old faces eviction from the Winter Park home she has lived in for about 46 years.

  • But the way Barbour lost her home is what makes her story unlike most any other foreclosure case. In reality, she doesn't own any part of her home today. She is barely a tenant. That's because she was swindled out of her large, tri-level on leafy Worthington Drive back in May 2007, during the real-estate boom.

  • This month, she testified at the sentencing of John Pavao, the head of an "equity skimming" or "equity stripping" scheme that robbed Barbour and other vulnerable seniors of homeowner values built up over decades. A judge sent Pavao to prison for 10 years as a result. His daughter Shastine, another felon involved in the racketeering scam, received a lengthy probation sentence.

  • But now, a little more than three years after Barbour unwittingly signed a document used by the unscrupulous group to claim her home, lending and loan servicing institutions are working to remove the woman from the residence, according to documents mailed to her home.

***

  • She asks a basic question: How can she be kicked out of a home that was sold from under her and without her knowledge — transactions that led to people being convicted of felonies? "They proved it was fraud, it was a felony," Barbour said. "They put the guy in jail, and I still lost my home."

***

  • When told about the Barbour situation [], Orange Circuit Judge Stan Strickland, who oversaw part of the foreclosure matter but not the final judgment, immediately halted all proceedings in the case, including the eviction. It should give Barbour time to get representation and sort out the legal mess, he said.(1) "I don't think it's written anywhere that I have to sit on my hands when I know something is wrong," Strickland said. "I'd rather err on the side of caution here and not have a woman thrown out."

For more, see Elderly Winter Park woman deals with scam aftermath — and possible eviction.

(1) This story serves as a reminder that, even when the scammer gets convicted on criminal charges connected to this type of home equity ripoff, the burden is still on the victim to file a civil lawsuit against the scammer and any other party that may have acquired an interest in the property as part of, or subsequent to, the swindle if the recovery of title to the home is desired.

In this case and others (assuming the scammed homeowner can't establish that the conveyance is absolutely void, such as in the case involving forged land documents - in which case all subsequently acquired interests in the home are also absolutely void) where the scammed homeowner retains and maintains continued possession of the home after signing the 'ripoff' documents conveying title to another, a strong case can arguably be made that a successful attempt to void the title conveyance to the scammer could also lead to the voiding of any subsequent mortgage placed on the home, even if the lender had no actual knowledge of the scam and claims to have the protection of the recording statutes as a bona fide purchaser.

In Florida, (as well as in most other jurisdictions), any subsequent purchaser of the home, or lender acquiring a security interest in the home, has a duty to conduct a physical inspection of the home, and where a physical inspection of the property would reveal an adverse interest or where there is a party in possession other than the record title owner, the subsequent purchaser or lien claimant has a duty to inquire of the possessor as to his interest and is charged with knowledge of the facts discoverable from such an inquiry or inspection.

Failure to make such inspections or inquiries will:

  • leave the subsequent purchaser's or subsequent lender's interest in the property subject and subordinate to any legal rights and equities that the scammed victim can establish, and

  • disqualify the subsequent purchaser or lender from the protections accorded a bona fide purchaser or bona fide encumbrancer.

For more on the duty of a subsequent purchaser or encumbrancer to conduct inspections and make the appropriate inquiries of persons in possession of real estate in Florida, (for which there is case law dating back over a century), see:

In other states, see Bona Fide Purchaser Doctrine, Possession Of Property By Occupants Other Than The Vendor & The Duty To Inquire.

For some insights on the various legal theories and startegies to attacking this type of scam in litigation brought on behalf of the screwed-over homeowner, see:

posted by Home Equity Theft Reporter at 4:02 AM