Attorney General Sues 19 in Massachusetts Mortgage Scam

A pastor, an attorney and a nurse were among those who lost their homes to a “foreclosure rescue scam” that targeted distressed homeowners, the Boston Herald reported yesterday.

Amid a record wave of Massachusetts home loan foreclosures across the Bay State, Attorney General Martha Coakley is suing 19 brokers, lawyers and companies for their alleged involvement in a foreclosure rescue and mortgage fraud scheme.

Coakley is seeking court injunctions to shut down these mortgage broker groups and cooperating individuals and asking restitution for nine struggling - and now mostly former - homeowners who were targeted.

At stake is more than $1 million in residents’ home equity and savings that was allegedly stolen as part of the foreclosure rescue scheme.

“These defendants, many of whom were professionals, preyed upon the vulnerable homeowners facing foreclosure to deceive them out of their home and life savings,” Coakley said.

“With the number of foreclosures increasing daily, this type of mortgage fraud is particularly troubling.”

Run out of Brockton, the scheme revolved around targeting homeowners facing foreclosure with promises to help them save their homes from being sold off by the bank, officials said.

The homeowners were told that the only way to save their property was to transfer ownership into a special “trust” where it would be safeguarded until they were financially ready to buy it back, the suit said.

Instead, Brockton-based Primary Mortgage Resource Inc., was at the center of a scheme in which the homes were sold to “buyers” believed to be part of the operation, the suit claims.

The quote-unquote sales involved new Massachusetts mortgage loans, but at much higher prices, creating equity that was then sucked out through an array of charges and fees, according to the suit.

Once all value was drained out, the homes were allowed to fall back into mortgage foreclosure. In a few cases, the homeowners were able to buy back their homes, but at crushingly high prices they couldn’t afford.

The filing names the home mortgage company owners, mortgage brokers and their sales people, as well as real estate attorneys. The companies cited include Primary Mortgage Resource, Universal Plus Realty & Financial Services, along with Home Pride Management.

The victims were a cross-section of Boston area residents. Along with a Mattapan pastor and a Natick attorney, the scam also targeted a Mattapan mother of two and a second nurse facing serious health problems.

SOURCE: Boston Herald