Massachusetts Files Lawsuits Against Foreclosure and Morgatgage Fraud Ring

BOSTON: Attorney General Martha Coakley's Office requested a judge to issue preliminary injunctions against nineteen individuals and companies, allegedly involved in mortgage fraud and a foreclosure rescue scheme, to stop them from unfair and deceptive business practices. These individuals were named in two separate lawsuits that AG Coakley's Office filed in Suffolk Superior Court as part of a continued effort to uncover predatory conduct in mortgage brokering and lending in the Commonwealth. A hearing on the suit and the request for preliminary injunctions was scheduled. "These defendants, many of whom were professionals, preyed on vulnerable homeowners facing foreclosure to deceive them out of their home and their life savings," AG Coakley said. "With the number of foreclosures increasing daily, this type of mortgage fraud is particularly troubling and we will take aggressive action to ensure that this predatory conduct does not continue in Massachusetts."
The first of the two lawsuits filed alleges a foreclosure rescue scheme. 

The first of the two suits filed alleges that the defendants participated in a foreclosure rescue scheme targeted at desperate homeowners facing foreclosure. Each of the defendants allegedly conspired through their respective roles to deceive homeowners into selling their homes under the false promise avoiding foreclosure and maintaining their homes. The defendants not only obtained the title to the homeowner' residences but also stripped most of the homes' equity though inflated mortgages, false fees for fictitious services and false certifications by closing attorneys. In certain cases, the defendants resold the homes amongst themselves, thereby extracting any remaining equity.

According to the complaint, the defendants misled the consumers about the nature of the transactions, defrauded them out of their equity, absconded with the homeowners' money, and forged homeowners' signatures on checks payable to homeowners. As a result of the defendants’ foreclosure rescue scheme, homeowners were ultimately left destitute, facing foreclosure and eviction.

The Attorney General's Office is seeking a court order to prevent the defendants from evicting homeowners or selling properties obtained through foreclosure rescue schemes, and from operating as mortgage brokers, real estate brokers, and closing attorneys.  AG Coakley is also seeking restitution for homeowners harmed by the defendants' conduct, civil penalties, and reimbursement of the costs of investigating and litigating this case. 
  
In a companion case, the Attorney General's Office alleges that Leo Desire Sr., Primary Mortgage Resource, Inc. and Valerie F. Hanserd, together altered a deed from the Federal Home Loan Mortgage Corporation (a.k.a. "Freddie Mac").  Freddie Mac intended to transfer a residential two-family house in Revere to Leo Desire for $305,000, and prepared a deed to such effect. The defendants, however, altered the deed by changing the purchase price of the property from $305,000 to $475,000, and by changing the name of the grantee from Leo Desire to a "straw buyer," Gloria Avila.  The defendants made these changes over the existing signature of Freddie Mac, and without Freddie Mac's knowledge or approval.  The defendants also provided an inflated appraised value of the real property; thereby obtaining a mortgage loan from a third party, Argent Mortgage Company, in a sum which is greater than the property value supports; they fabricated a HUD Settlement Statement to reflect the fictitious purchase price and fictitious disbursements; and the defendants allegedly shared in the proceeds of the larger mortgage loan.
The Attorney General's Office, in the companion case, is seeking to prevent defendants Leo Desire and Primary Mortgage Resource, Inc. from acting as mortgage brokers, and to prevent defendant Valerie Hanserd from acting as a closing attorney or settlement agent in connection with real estate or real estate financing transactions in the Commonwealth. 

In Suffolk Superior Court the Attorney General's Office requested preliminary injunctions against all 19 defendants to stop transactions already in process from going forward and to ensure there are no new victims. Judge Allan van Gestel took the request under advisement.