The housing crisis in the United States is providing a ready market of victims for foreclosure scam artists and criminals preying on unsuspecting Americans who find themselves in a difficult situation. The unprecedented number of foreclosures in this nation is making the mouths water for up and coming white-collar scam artists. New foreclosure assistance companies and loan modification companies are springing up faster than they can be counted. Former mortgage brokers have now switched and suddenly become experts in loan modifications and foreclosure assistance. Everyone seems to be an expert in the foreclosure assistance market. Who will be the next victim-it could be you. Foreclosure scam artists commit several felonies in perpetrating their crimes including mail fraud, wire fraud, bank fraud, and providing false statements to federally insured lenders. Americans with a foreclosure problem are receiving five to ten phone calls every day and mailings too numerous to count. Yet this is only half the problem. Bankers, scam-artists, and straw buyers are all complicit in these crimes but government law enforcement officials and even the F.D.I.C. are standing back allowing it to happen. Case in point…
Sixty-nine year old Waver Brickhouse fell behind on her $213,000 home mortgage and needed help. She had always been a church-going individual but kept mainly to herself, living a solitary life and raising her four adopted children. In 1996, she purchased her first home and as economic times grew harder she fell behind on her mortgage payments in 2005. A white knight suddenly appeared- on the recommendation of a close friend- the white knight being Home Savers Consulting. The principals of Home Savers Consulting were neither bankers, nor mortgage brokers, nor real estate agents, but they were experts in foreclosure assistance-so they said. Both of Home Savers’ principals, Garth Celestine and Phillip Simon, had had numerous complaints filed with New York City prosecutors, but no criminal charges have ever been brought. Officials from the South Brooklyn Legal Services Foreclosure Prevention Project estimate that Mr. Celestine’s and Mr. Simon’s company had extracted over $5 million in equity from the homes of unsuspecting people in just a handful of cases. How could this happen? How do people fall prey to these unscrupulous scam artists? Here’s the pitch…
Home Savers Consulting and its principals, Mr. Celestine and Mr. Simon, offered to refinance Mrs. Brickhouse’s $213,000 home mortgage and make all payments for a year. This would allow Mrs. Brickhouse the opportunity to use the money she normally used for mortgage payments to pay off her other debts. At the end of the year, Mrs. Brickhouse was to resume paying her mortgage payments and pay a small fee to Home Savers Consulting. Home Savers Consulting said they had found a “sponsor” that would assist Mrs. Brickhouse in this transaction. Everything sounds good so far doesn’t it-well keep reading.
In May of 2007, Mrs. Brickhouse attended a meeting for what she assumed was the closing to refinance her home. She met with a representative of Home Savers Consulting, Indy Mac Bank, Yolanda Millett (the sponsor or straw buyer), and Ms. Millett’s lawyer. The meeting was not a refinancing at all. Unbeknown to Mrs. Brickhouse, they were all there to sell her home and strip it of all its equity.
Ms. Millet for her complicity as a straw buyer received $8,000. Indy Mac Bank immediately gave the new owner, Ms. Millet, a $380,000 mortgage which allowed Home Savers to peel away $150,000 in equity from the home-the small fee that Home Savers Consulting was going to receive. After the year was over, Ms. Millet returned the deed to Mrs. Brickhouse along with the $380,000 mortgage. Now, instead of a $213,000 mortgage, Mrs. Brickhouse is faced with a $380,000 mortgage! But the situation just gets worse.
Around the same time Indy Mac Bank went belly up. The F.D.I.C took over Indy Mac Bank and its large troubled mortgage portfolio including the $380,000 mortgage of Mrs. Brickhouse. Representatives from the F.D.I.C. notified Mrs. Brickhouse that she owed the $380,000 mortgage and they wanted payment. Mrs. Brickhouse, now realizing the fraud that was perpetrated, refused and said she owed the $213,000 but not the $380,000 which was due to a fraudulent transaction.
Federal officials, in what I believe is an astonishing statement, said they have no way of determining whether Home Savers Consulting committed a fraud and furthermore stated that Indy Mac Bank was not involved! Not involved, are you serious! Court papers show that a representative of Indy Mac Bank was at the meeting, provided the $380,000 mortgage, and knew that Home Savers had no legal standing whatsoever and still did nothing! Equally unbelievable is the statement by federal officials saying they don’t know if a fraud was committed. Do these individuals actually have a responsible job in our government? Apparently they do, but they certainly shouldn’t.
Mrs. Brickhouse’s case is still in limbo. Fortunately, she secured legal assistance and all parties are trying to come to a reasonable and fair solution. Home Savers Consulting is still in business and federal prosecutors have not brought any criminal charges as of yet. Ms. Millett for her part in the scam has stepped forward and admitted in a sworn affidavit that Mrs. Brickhouse “did not at any time believe that the ownership in the subject property passed on to me and that her intent was never to relinquish ownership.”
The gates are wide open for get-rich-quick scam artists in this vastly growing foreclosure market. Currently, the federal officials are doing little to try to curtail this epidemic of fly-by-night loan modification companies. Yet the stupidity and absurdity of the F.D.I.C. officials as demonstrated in the Brickhouse case is on a parallel with the cruel and ruthless behavior of those perpetrating the crime.