Monday, July 03, 2017

Wraparound Mortgage Scam Leaves Couple Facing Foreclosure Despite Having Made All House Payments; Real Estate Operator Who Sold Home Suspected Of Stiffing Lien-Holding Bank After Collecting Monthly Payments From Victims

In Tucson, Arizona, KVOA-TV Channel 4 reports:
  • The dream has turned to panic for Jan Ngo and her husband, Alan.

    They and their three children hope to stay in their Midvale Park home for a long time. They bought the house in 2014 for $99,000, and say they've spent more than $20,000 on improvements, including a new roof, solar panels and interior renovations.

    Referring to the time they moved in, Jan told the News 4 Tucson Investigators, "I was extremely excited. It was part of the American dream that everybody owns their own home, and, you know, you come to a home. So it was wonderful and the kids were so excited. This is our first home."

    The couple's dream was disrupted in March. That's when they received a Notice of Intent to Foreclose from Chase Bank. Jan says "I was completely stumped, I was worried, I was upset. I've been paying on time every single month and didn't understand why would we be going through foreclosure if we had paid every single month on time."

    Alan says he bought the home from a man the News 4 Tucson Investigators have reported on before, David Kinas. In 2015, Mark Brnovich became the second Arizona Attorney General to investigate Kinas. The A.G's office said Kinas engaged in deceptive rent-to-own practices. We reached out to Kinas at that tine, attempting to interview him outside his office. He did not stop. We asked, "Hey, why are you walking away? We want to ask you about the attorney general's lawsuit."

    Records from the Arizona Corporation Commission show Kinas is affiliated with companies called "881 Home" "Deed and Note Traders" and "Olympic Holdings." Alan Nguyen says he paid the monthly mortgage of $887.93 dollars in person at 881's office, and got receipts.

    However, there was a lien on the home, with Chase Bank.

    Attorney Richard Luff is suing Kinas, his wife Deanne, "Deed and Note Traders" and "881 home" on behalf of Jan and Alan. The "Wraparound" mortgage that Alan signed says Deed and Note Traders was supposed to advance his payments to Chase. Luff said "Chase Bank, I just got off the phone with them. They're indicating to me their last payment was in November 2015."

    We asked Luff what happened to his clients mortgage payments since then. He said, "That is an excellent question, and we don't have any answer to that at this point."

    Kinas did not return our call. His attorney, Scott Gibson, last week declined an on-camera interview but said on the phone that he'll "move to dismiss the lawsuit." He did not elaborate. However, in a court hearing on Monday, Gibson blamed Chase, saying Kinas made all the payments and the bank is wrong. Outside the courthouse, we did not ask Gibson any questions, and he did not want to be recorded. Gibson said, "I don't want to be on. I told you once."

    One other thing about the mortgage Alan Nguyen signed: the names "Michael" and "Mary" are listed at the top. Apparently, it was a copy that wasn't changed when given to Alan.

    Pima County Superior Court records show many lawsuits filed against Kinas and his companies over the years. Southern Arizona Legal Aid,(1) which represents low income residents, won a fraud case against Kinas three years ago. The plaintiffs were awarded $5767.60 and Legal Aid was awarded $30,000 in attorneys' fees. Legal Aid Managing Attorney Beverly Parker says Kinas has not paid both parties.

    Parker said she has seen a trend in cases involving Kinas. "We have clients who come in who believe they've bought homes, or are in the process of buying homes, and all of a sudden they received a notice of trustee sale on their door," Parker said.

    There's more: the Arizona Department of Real Estate recently filed a "Cease and Desist order" against Kinas and three companies he's with. The agency says Kinas and the firms are not licensed. The order says "881 advertised real estate for sale and lease that were not owned by 881. The properties were owned by other entities or individuals." Kinas' lawyer told us on the phone: "That's a true statement and we have ceased and desisted."

    Jan Ngo said, "I'm very, very disappointed in the attorney general's office because this has been going on for so long."

    In 2006, Kinas agreed to a settlement with the attorney general that involved his foreclosure-assistance business. Kinas was ordered to pay restitution to former clients, and pay $200,000 to the attorney general's office for the cost of the investigation. "It hasn't stopped him," says attorney Beverly Parker of Legal Aid. "I wish it did. But it hasn't stopped him."

    Jan Ngo said, "Somebody needs to put a stop to it."

    Deed and Note Traders" filed for bankruptcy in 2010. The case is still ongoing.

    Alan Nguyen and his wife obtained a temporary restraining order last week that puts a hold on the foreclosure proceedings. Attorney General Brnovich declined an interview through a spokesperson. We don't know if he's investigating David Kinas again. We do know the A.G. does not comment on investigations until they are completed.
Source: N4T Investigators: American nightmare.
(1) Southern Arizona Legal Aid is a non-profit, public interest law firm that provides free, civil legal aid to qualified low-income persons who would not otherwise have access to Arizona's civil justice system throughout southern and southeastern Arizona (covering a nine-county service area). land contract for deed