For those of you following the Edwards’ case, here’s an article from one of our local newspapers (Catherine Kavanaugh reporting for the Daily Tribune):

The eviction hearing for longtime residents Brenda and Terry Edwards was postponed Tuesday so the judge can review a legal brief raising more issues related to their mortgage fraud case. The Edwardses have lived 32 years in a Hilldale Avenue bungalow. They paid it off in 1997, but the couple became tenants in the house last year following a home equity scam.

The Edwardses unknowingly gave away the 79-year-old dwelling when a shady lender slipped sales documents into paperwork the couple thought they were signing for a $10,000 home equity loan. The residents ended up selling their house to the lender’s accomplice who didn’t make any payments and let the property go into foreclosure. It was sold at auction last summer to U.S. Bank National Association for $137,724. The bank wants the couple out, while the Edwardses’ attorney, Scott F. Smith, is asking 44th District Judge Terrence Brennan to set aside the eviction.

“I want to give everyone a full opportunity to present every argument they have,” Brennan said.

While the motion to set aside the eviction is pending in district court, Smith said he will file for a quiet title in Oakland County Circuit Court. This process determines the rights of all parties who are in dispute over a property.

The Edwardses contend they never intended to sell their house. They said they did not receive a penny from the transaction set up by their lender, who allegedly walked away from the deal with at least $33,000 from a forged check cashed in the Edwardses’ name at a Novi bank.

Novi and Royal Oak police as well as the Federal Bureau of Investigation are looking into criminal aspects of the transaction while the property rights issues proceed in district and circuit courts. Friends and neighbors of the Edwardses showed up in court to offer their moral support. The couple’s daughter, Tracy Wallaert, said she appreciates everyone who has encouraging words for her parents.

“I figured people would follow this, but more like gossip as in look what the Edwardses’ are dealing with now,” Wallaert said. “But fortunately they really care. A lot of people think: This could be me. When you take out a loan you feel it’s a secure process.”

The Edwardses needed the home equity loan to pay back taxes. The lender did cover that debt but when it came to finalize how the couple would repay it, other documents, including a two-page warranty deed, were put in front of them to sign.

Ralph Roberts, a mortgage fraud expert, is helping the Edwardses through the legal process, and he said the seven-week postponement on the motion to set aside the eviction is the “second-best thing that could have happened.”

“We can go to the circuit court for other remedies,” he said. “Some parties have clean hands, some don’t. This will take time to sort out.”

I must say, having been present in the courtroom for yesterday morning’s proceedings, Judge Brennan did a really good job, and it was especially nice to see his genuine concern for Brenda and Terry. For my part, I attempted to talk to U.S. Bank National Association’s attorney about setting up a Rent Escrow account for the Edwards’ but they wanted nothing to do with that suggestion.

It’s a shame, really, because all indications are that the Edwards’ will win this battle. They were clearly taken advantage of, and if U.S. Bank National Association was smart, they’d be doing everything within their powers to help–not get in the way of–the Edwards reclaiming their property.

2006-04-11 08:15

I’m headed back to court this morning to assist with the Edwards’ case. We’re hopeful that by the end of this week, the Edwards’ matter will be cleared up entirely, allowing Brenda and Terry to continue to live in the house they’ve called home for the last 32 years (click here for a recent news story about the Edwards’ and today’s hearing). In the meantime, I think it’s worth mentioning another local real estate fraud-related case I’m consulting on… this one involving an elderly couple from my part of the state who were tricked by fraudsters into giving up four of their income-generating properties.

Back on the 1st of March of 2005, after running into significant financial difficulties, 82-year-old Claude Seay and his 79-year-old wife Rosalie decided it was time to refinance four of their rental properties. According to documents field with the Circuit Court for the County of Oakland (Michigan), Rosalie Seay called Oak Park, Michigan-based Modern Mortgage Corporation, where she was referred to mortgage broker Max Garza. Shortly after Rosalie’s initial telephone conversation with Garza, Garza and co-conspirator Todd McNeil came to the Seay’s home, and through deceit, material misrepresentations and trickery, convinced Claude and Rosalie to sign a blank ‘quit claim‘ deed.

The Seay’s, of course, never intended to give up their properties, and as you might have guessed by now, only received $3,500.00 from Garza/Modern Mortgage Corp./McNeil for what they believed were the proceeds from the refinancing. Unbeknownst to Claude and Rosalie, Todd McNeil re-mortgaged their properties for around $125,000.00 cash, which was obtained by fraudulent means and without any consideration whatsoever for Claude and Rosalie.

My role in the Seay’s case is similar to my role in the Edwards’ case. I’ve been researching and untangling real estate fraud-related matters for years, and in this case, I’m helping the Seay’s attorney understand the intricacies of the fraud that has been committed against Claude and Rosalie Seay.

Check back soon for updates on both the Edwards’ and Seay’s cases.

For anyone who might be interested, here’s an update to the piece I wrote back on the 20th of March about the husband and wife who recently turned to me for help with a real estate fraud-related issue.

From The Daily Tribune:

The couple who unwittingly sold their house in a mortgage fraud scam finally got some good news. LaSalle Bank has offered to pay Brenda and Terry Edwards $33,000 for a check cashed in their name with forged signatures.

“We don’t know if we’ll take the money. We might just set it aside for now because we want the house back,” said Ralph Roberts, a mortgage fraud expert who is helping the pair through the court system.

The Edwards’s thought they were signing documents to repay a $10,000 home equity loan when an unscrupulous lender slipped in a purchase agreement. The husband and wife ended up selling their Hilldale Drive bungalow to a third party who was part of the scam called equity stripping.

The “straw buyer,” who got paid off by the lender, didn’t keep up his mortgage payments and the Edwards’ house went into foreclosure and was sold at auction last year. The buyer then sought a termination of tenancy order against the Edwards’s in 44th District Court. The couple has until Tuesday to leave the house they paid off in 1997 or face eviction unless an injunction they requested late last week in Oakland County Circuit Court is granted.

Roberts said he hopes the injunction will prevent an eviction while the fraud case is investigated. “The Edwards’s have gotten some good news. It’s not great news but it’s working that way,” Roberts said.

It’s really nice to see a reporter (in this case, Catherine Kavanaugh) and her newspaper (The Daily Tribune) following up on a story as impacting as the Edward’s. In fact, since the original article first appeared back on the 19th of March, the Edward’s, Catherine Kavanaugh, and I have all received numerous phone calls and inquires from concerned neighbors wondering what they can do to help the Edward’s and protect themselves from similar scams. Everyone surrounding this case seems to clearly understand that real estate and mortgage fraud is a deadly killer, and everyone wants to help.

I think it was the British writer Jane Austen who said, “Every man is surrounded by a neighborhood of voluntary spies.” When it comes to spotting, stopping, and recovering from real estate fraud, that’s actually a very good thing!

Real estate and mortgage fraud have become so prevalent that I now spend as much time on the phone talking with journalists, consumers, and other industry professionals about real estate fraud as I once did–back in the mid-1970s (when I first started out in this business)–selling real estate. On any given day, I field no less than 10-20 phone calls from newspaper reporters, victims, and real estate industry insiders… all of whom ask for help in understanding, fighting, and defending against real estate and mortgage fraud schemes and claims.

One such call came a few weeks ago. Lucinda Lienau from GMAC Real Estate/The Kee Group called to see if I could help a husband and wife from my area who unknowingly sold their house when what they thought they were doing was simply using their house as equity for a loan. Lucinda wanted to know if I could help Brenda and Terry Edwards prove that they’re victims of real estate fraud. Then, last week, a call came from a newspaper reporter covering the Edwards’ case.

From this weekend’s online edition of The Daily Tribune:

A DIRTY DEED
by Catherine Kavanaugh, Daily Tribune Staff Writer

Published March 19, 2006: Brenda and Terry Edwards wanted to take out a small home equity loan to pay back taxes. That’s all. Instead, the couple became targets of an unscrupulous lender who took them for all they have in a mortgage fraud scam that plays out in different variations every day in the United States.

The couple needed a quick $10,000 and decided to tap their biggest investment — a tidy bungalow on Hilldale Drive that they have lived in for 32 years and paid off in 1997. The Edwards found a mortgage company in the phone book, but it didn’t handle loans that small. They said the loan officer referred them to a personal lender named Gustavo Aguilar with the now defunct Hispanic Financial Group of Southfield.

The couple said Aguilar offered them service with a smile, coming to their house with his children on a Sunday, delivering them paperwork to sign and then cutting the check to Oakland County to cover their delinquent taxes just before the March 2004 due date. Sometimes Aguilar even stopped by unannounced to say hello and see how they were doing, Brenda Edwards, 54, said.

From April to October 2004, the Edwards said they called Aguilar repeatedly about a payment plan. To finalize the loan, the couple was told to go to a Farmington Hills office where they were presented with a stack of papers.

“There were some big figures in the papers, like $87,000 and $137,000,” Brenda Edwards said. “I didn’t know what was going on but I trusted Gus. I trusted him like you trust the doctor is going to take out your burst appendix and not cut off your leg. I signed things and we sold our house without knowing it.” Now the Edwards are tenants facing eviction from the 79-year-old house they bought as young newlyweds, lovingly updated, and never planned on leaving.

Shuffling through a file of documents with allegedly altered dates and forged signatures, the Edwards pull out an order from 44th District Court notifying them that they must vacate the premise by March 28 or face eviction.

The Edwards fell victim to a scheme called equity stripping, according to Ralph Roberts, a realtor, author and expert on mortgage fraud. In the typical equity stripping transaction, a lender or investor purchases the homeowner’s interest in a property for a fraction of the value, pays off the owner’s debt against the property and then sells the home to a third party for a handsome gain.

Roberts said these cases of equity stripping, loan flipping, packing and straw buyer schemes are just the tip of the iceberg. He said the FBI typically investigates complaints of losses totaling $500,000 or more. Roberts estimates one in four mortgage transactions involve some kind of fraud and he is urging Lansing lawmakers to tighten state laws to protect homeowners.

“This is the cancer of the American dream of home ownership,” Roberts said.

He wants to be the chemotherapy. A self-described crusader in the industry who discovered one of his agents participating in shady deals, Roberts contacted the FBI and started lobbying to close the legal loopholes.

“A loan officer doesn’t even have to be licensed in Michigan,” Roberts said, pointing to one of flaws in the system. “That has to change. You can scam someone, get fired for it and go to work somewhere else with no record of it.”

The scam against the Edwards began on the Sunday when Aguilar had the couple sign a…

Click here for the rest of Catherine Kavanaugh’s article, which shows exactly why I ALWAYS recommend the following:

Always, always, always understand what you are signing and agreeing to, AND always seek assistance from a skilled real estate attorney. If you do not understand something you’re being asked to sign, ask for clarification and re-read the document again before signing.

In fact, click here or scroll down to yesterday’s blog entry for my Top 10 Tips for Avoiding Real Estate and Mortgage Fraud.