More On Florida AG Suit Against South Florida Foreclosure Rescue Operator Allegedly Offering Deceptive Sale Leaseback Arrangements

In Broward County, Florida, the South Florida Sun Sentinel ran a story on foreclosure rescue operator Jack Moussa and his Florida Housing Council, who are among the targets of a civil lawsuit brought by Florida Attorney General Bill McCollum for violations of the Florida Deceptive and Unfair Trade Practices Act:

• In interviews with the Sun-Sentinel last year, several homeowners said Moussa came into their homes and promised to help them avoid Foreclosure. Some said Moussa hurried them into signing documents, including complicated trust agreements and deeds that gave all the control of their properties to the housing council. Homeowners were often charged various fees for signing the trust agreements even though no actual services were provided, the suit said. In many cases, Moussa told homeowners that the housing council was a federally funded agency that helps homeowners in financial distress.

The story includes anectdotes from two financially strapped homeowners who did business with Moussa and who subsequently brought their own lawsuits against his companies. Florida attorney David Silverstone, who represents one of the homeowners and who has represented other homeowners in suits filed against the housing council, praised McCollum for taking the action.

For more, see State attorney general targets 3 mortgage companies (when link expires, try here or try here).

For a copy of the lawsuit and the Florida AG's allegations filed in Fort Lauderdale, see Office of the Attorney General - State of Florida v. Florida Housing Council, et al.

Go here for other posts on Florida foreclosure rescue operator Jack Moussa and the Florida Housing Council.

Go here , go here , and go here for one blogger's random thoughts on Jack Moussa.

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Some time ago, the CNN business program Open House with Gerri Willis featured a Florida couple facing foreclosure and their experience when they unwittingly signed over their home to a title-holding land trust in a deal arranged by foreclosure rescue operator Jack Moussa and his Florida Housing Council. To watch the video, see Rescue or Ripoff?

Florida AG Slams Firm Offering Foreclosure Rescue, Sale Leaseback Programs In Civil Suit; Alleges At Least 38 Homeowners Screwed Over

(original post - 3-27-08)
The Florida Attorney General's Office has filed another civil lawsuit against a foreclosure rescue operator offering allegedly sham sale leasebacks to homeowners facing foreclosure. Excerpts from the Florida AG announcement follow:

• Attorney General Bill McCollum [Wednesday] announced that his office has sued three Broward County companies and their owners for their alleged roles in a foreclosure rescue scheme. The lawsuit names Florida Housing Council, LLP; Equity Investment Capital Management, Inc.; Star Enterprises, LLC, and Jack Moussa and Rose Moussa as the participants in a deceptive operation that defrauded hundreds of thousands of dollars in home equity from numerous homeowners in the foreclosure process.

• Florida Housing Council allegedly identified homeowners in the foreclosure process and sent them an advertising mailer telling them to contact Florida Housing Council immediately to avoid foreclosure. Representatives of the companies would then persuade homeowners to sign documents, including complicated trust agreements and deeds, which conveyed the titles to their properties to trusts controlled by Florida Housing Council. The complaint states consumers were often charged various fees for signing the trust agreements even though no actual services were provided. According to the lawsuit, Jack Moussa also occasionally misrepresented to consumers that Florida Housing Council was a government entity.

• Once the deeds were transferred, Florida Housing Council would allegedly charge the homeowners rent, and if rent was not paid, the homeowners would be evicted from their homes. Jack Moussa would supposedly either keep the homes or sell them for a profit. At least 38 homeowners in Florida have been affected and hundreds of thousands of dollars in homeowner equity has been taken.

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• Consumers who believe they may have been victimized by any of these defendants may contact the Attorney General's Office at 1-866-966-7226 or online at http://myfloridalegal.com to file a complaint.

For the Florida AG press release, see Broward Companies, Couple Sued for Foreclosure Rescue Scam (Scheme victimized more than 30 families, defrauding them out of hundreds of thousands of dollars in home equity).

For a copy of the lawsuit and the Florida AG's allegations filed in Fort Lauderdale, see Office of the Attorney General - State of Florida v. Florida Housing Council, et al.

Go here for other posts on Florida foreclosure rescue operator Jack Moussa and the Florida Housing Council.

For another recent civil lawsuit by the Florida AG against another foreclosure rescue operator, see:

• Office of the Attorney General, et al. v. National Foreclosure Management, Inc., et al.,
• Florida AG Tags Foreclosure Rescue Operator, Title Agency, Others With Civil Suit In Alleged Sale Leaseback Scam; State "Rescue" Statute Proposed.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

Straw Buyer Suing South Florida Foreclosure Rescue Operator

Lawsuits against foreclosure rescue operators typically take the form of civil lawsuits pitting the financially strapped homeowner who signed away a home with the operator, or criminal charges where the government alleges the commission of a crime by the operator (see Foreclosure Rescue - For Criminal Prosecutors Only).

A recent article in the South Florida Sun Sentinel reports on the story of an investor, who apparently participated as a straw buyer in a foreclosure rescue "opportunity," who is suing the operator who put the rescue deal together. Straw buyer Matthew W. Anderson has sued well-known South Florida foreclosure rescue operator Jack Moussa, along with companies he controls, Equity Investment Capital Management, and Florida Housing Council, on Aug. 23 in a state court in Broward County, Florida.

Also named in the suit is Star Enterprises and its owner Rose Moussa (Jack Moussa's ex-wife), Jerome Weinstein, and the financially strapped homeowners who had sought help from Moussa and Florida Housing Council in the first place. According to the story:

• "The latest suit alleges that Weinstein and the Moussas conspired to defraud Anderson as they solicited him to put more than $80,000 into real estate investments. Anderson, who's seeking unspecified damages in the civil lawsuit, claimed the investments did not yield any profits."

Moussa and Florida Housing Council have been sued by South Florida homeowners in recent years, alleging fraud and deceptive practices. They have been accused of creating the impression that Florida Housing Council is a federally funded agency that helps homeowners in financial distress.

For more, see Delray Beach investor sues Broward foreclosure rescue firm (Investor's lawsuit follows actions by homeowners).

Go here for other posts on the foreclosure rescue activities of Jack Moussa and Florida Housing Council.

For links to stories involving criminal prosecutions of foreclosure rescue operators, see Foreclosure Rescue - Criminal Prosecutions.

For more on equity stripping scams, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).

More On South Florida Foreclosure Rescue Operator Jack Moussa

The South Florida Sun-Sentinel has an investgative report today on foreclosure rescue operator Jack Moussa and his company, Florida Housing Council. This is the second media report recently done on Moussa and his firm; the first being one done by South Florida TV station WSVN-TV Channel 7 (for prior post on Moussa and the Channel 7 report, see More Foreclosure Rescue Victims Fighting Back).

Today's story reports that Florida Housing Council and Moussa have faced seven lawsuits -- one was settled, six are pending -- in Broward, Palm Beach and Miami-Dade county courts in the past three years alleging fraud and deceptive practices.

Hollywood, Florida attorney David Silverstone, who recently settled a case against Florida Housing Council and has another pending, states "I think the Florida Housing Council is taking advantage of people who are in a desperate situation. They are saying one thing and then presenting papers that show something else. It's hard for even an attorney to get through these documents."

For more, see:

• Beware: Foreclosure 'rescue' firms could take title to your home
• S. Florida families learn bitter lessons about trying to save homes (no longer available online).

Go here for other posts on the foreclosure rescue activities of Jack Moussa and Florida Housing Council.

Editor's Note

There is plenty of case law in Florida (and other places as well) that allows courts to recharacterize these sale-leaseback foreclosure rescue deals as (possibly usurious?) secured loans / equitable mortgages. Go here for more on the Florida case law on equitable mortgage (some of which also addresses usury) to consider how the case law may be applied to foreclosure rescue transactions structured as a sale leaseback, or variations thereof, with a right to buy back the property in the future. Contained at this link are, among others, the following two posts:

• Equitable Mortgage & Usury In Sale Buyback Deals In Florida
• More On Equitable Mortgage & Usury (Florida). equitable mortgage yak

More Foreclosure Rescue Victims Fighting Back

WSVN-TV Channel 7 in Miami reports on two cases of financially strapped homeowners who unwittingly signed away their homes and who decided to fight back. In one case, attorney Carol Lombardi of Legal Services of Greater Miami, who has been involved in maybe 15 or 20 of these types of cases, successfully brought legal action against foreclosure rescue operator Hencile Dorsey to take back the home he took from Lombardi's client.

In another case, South Florida attorney James Brady has filed suit on behalf of a husband and wife who unwittingly signed over their home to Florida Housing Council, another local foreclosure rescue operator.

Jack Moussa of the Florida Housing Council has taken the position that the homeowner needs to follow the contract they signed, pay the trust $160,000 for its work and they will get the house back in their names. According to Moussa, "They are quite aware of the American system. They do realize what a contract is."

For more, see Home Heartache.

Postscript

I don't know what law school foreclosure rescue operator Jack Moussa of Florida Housing Council went to, but he better hope that all the judge does is order him to give back the home to the victims. If a judge finds that his forecloure rescue arrangement should be recharacterized as an equitable mortgage / disguised loan, and a judge calculates his "profit" on the deal to be more than 18% per annum, he may be found to have violated Florida's civil usury statutes (Section 687.03, Florida Statutes). Further, if Mr. Moussa's "profit" is calculated to be more than 25%, he potentially stands to forfeit any money he invested in the arrangement (and he also may be getting a visit from local prosecutors regarding possible criminal misdemeanor charges; "profit" over 45% per annum could result in felony charges; see Section 687.071, Florida Statutes).

See:

• Equitable Mortgage & Usury In Sale Buyback Deals In Florida,
• More On Equitable Mortgage & Usury (Florida).
• Go here for more on the Florida case law on equitable mortgage, generally (some of which also addresses usury), to consider how the case law may be applied to foreclosure rescue transactions structured as a sale leaseback, or variations thereof, with a right to buy back the property in the future. equitable mortgage yak

CNN On Homeowner Fighting Foreclosure Rescue Operator To Keep Home

Some time ago, the CNN business program Open House with Gerri Willis featured a Florida couple facing foreclosure and their experience when they unwittingly signed over their home to a title-holding land trust in a deal arranged by foreclosure rescue operator Jack Moussa and his Florida Housing Council ("FHC"). Interviewed for the piece was Florida attorney David Silverstone, who represents the homeowners in a lawsuit against Moussa and FHC in which Silverstone seeks to void the deed transfer, alleging that the foreclosure rescue transaction was a disguised loan that violates the Federal Truth In Lending Act, the Florida Deceptive and Unfair Trade Practices Act, and the Florida usury statute. Based on the transaction the homeowners entered into with Moussa, Silverstone claims that the return on investment on the disguised loan was 300%, more than the maximum amount allowed by Florida law.

To watch the video, see Rescue or Ripoff? (Open House with Gerri Willis; CNN).

Go here for other posts on Florida foreclosure rescue operator Jack Moussa and the Florida Housing Council.

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Editor's Note:

There is plenty of case law in Florida (and other places as well) that can be used to support a court's decision to recharacterize sale-leaseback foreclosure rescue deals as (possibly usurious?) secured loans / equitable mortgages. Go here for more on the Florida case law on equitable mortgage (some of which also addresses usury) to consider how the case law may be applied to foreclosure rescue transactions structured as a sale leaseback, or variations thereof, with a right to buy back the property in the future.

It may only be a matter of time before the Florida Attorney General's Office "steps up to the plate" and begins to prosecute foreclosure rescue operators who offer sale leaseback programs for violating Florida's usury statutes:

• Civil usury - Section 687.03, which currently sets a maximum 18% per annum interest, and applies to advances up to $500,000;
• Criminal misdemeanor usury - Section 687.071(2), generally applies on interest willfully and knowingly charged in excess of 25% per annum but not exceeding 45% per annum;
• Criminal felony usury - Section 687.071(3), generally applies to interest willfully and knowingly charged in excess of 45% per annum,
• Debt unenforceable - Section 687.071(7) states that a loan made in violation of the Florida criminal usury statute is unenforceable.

For more on foreclosure rescue and equity stripping arrangements, generally, see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).