Wednesday, November 25, 2015

New Haven Feds Bag Real Estate Operator Who Allegedly Ran Rent Skimming Racket After First Duping Financially Distressed Homeowners Into Signing Over Title, Control Of Their Homes Under False Pretense That Suspect Would Pay Off Mortgages

In New Haven, Connecticut, the Connecticut Post reports:
  • A 64-year-old Easton man - using 13 different alias names - has been arrested in what federal officials call a long-running fraud scheme that targeted distressed homeowners.

    Timothy W. Burke was arrested [] for a using a scheme he alllegedly created to defraud individuals, mortgage lenders and the U.S. Department of Housing and Urban Development by falsely representing to homeowners who were in, or facing, foreclosure on their homes that he would purchase their homes and pay off their mortgages.

    ***
    How it worked

    Federal officials said the distressed homeowners agreed to sign various documents, including quit claim deeds, indemnification agreements, management agreements and third-party authorization letters, which Burke presented to them on the understanding that, by signing the documents, they would be able to walk away from their homes without the burdens of their mortgage or other costs associated with home ownership.

    Burke also told homeowners that the process of negotiating with the lenders “can take time and that, in the meantime, to ignore any notices regarding foreclosure.”

    Sounds too good to be true? According to federal investigators, it was.

    After he gained control of these houses, Burke rented out the properties to tenants by advertising the properties on craigslist.com and other means and falsely representing to tenants that Burke owned the property.

    The complaint further alleges that Burke - or one of his agents - then collected rent from tenants, in person, and Burke used the funds for his own benefit.

    Federal investigators say Burke failed to negotiate with the homeowners’ mortgage lender or pay expenses associated with the home, including the homeowner’s mortgages, taxes, insurance, association dues, or other expenses. And he failed to pay any rental income he was collecting to the homeowners, who thought he was helping them out.

    The investigation also revealed that homeowners often discovered on their own, and to their surprise, that Burke had rented out their houses.

    In the end, many of the properties Burke purportedly purchased were ultimately foreclosed upon by the mortgage lender.
For the U.S. Attorney (New Haven) press release, see Easton Man Charged with Defrauding Distressed Homeowners.

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