Scammed In A Refi, Woman Loses Home

A woman who thought she was doing a simple refi for $50,000 and became the victim of an elaborate swindle was just dealt her final savage blow: her house is getting foreclosed on.

The scammers actually had a “straw buyer” take deed on her house and then took out a mortgage at $230,000, nearly twice what the home was worth. He also put down as his employer a non-existant Blockbuster store in New York. (Don’t you think the fact alone that it was Blockbuster should have set off some alarm bells?) They then transferred the deed back to her and gave her $50,000 from that mortgage, which she thought was the equity from her refi.

The woman was even preyed on by people calling themselves foreclosure defense lawyers. They charged her over $20,000 while routinely missing court appearances.

After 3 years in the system, it only took a “rocket docket” judge 15 minutes to review her case and rule in the bank’s favor. Neither she nor her lawyer were allowed to speak in her defense during the hearing.

A nightmarish story that illustrates the number one sign of a scammer: they call you. Never do a deal with the first guy pitching it to you. Do your research and choose your vendor based on who is best in the field for your budget.

Hellish home refinancing nears bleak conclusion [Miami Herald]

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Strapped To A “Rocket Docket” Built For Max Foreclosure Speed

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  1. macoan says:

    You feel sorry for her, but can’t blame the bank for anything on this one. (other then all banks trying to work with customers to refinance… but sounds like the lady already lost most of her money, so not sure what could have been done.)

    • B says:

      Well, other than the fact that the bank allowed somebody to take out a $230,000 mortgage on a house they don’t own using a fake blockbuster as an employment reference.

  2. stevenpdx says:

    Don’t try to refinance your house with some guy who shows up unsolicited.

    Want to refinance? Go to your bank.

  3. davidv says:

    “Neither she nor her lawyer were allowed to speak in her defense during the hearing” What is this, North Korea? How is this legal, and why hasn’t the judge been smacked down for it.

    • JustLurking says:

      EXACTLY my thought.

      That gets a big WTF in my book.

      What the hell is going on in my country?

      In the past ten years we have been subject to more and more steps taking us closer to Big Brother.

      We have had librarians subjected to control and restriction by top secret courts, complete with secret judges where not even the librarian not her lawyers are actually told the charges against her. We have pat downs and potentially dangerous x-rays given to to millions of Americans (and innocent foreigners alike) for the grave crime of buying an airline ticket. And now we have homes stripped from people who have obviously been robbed without being allowed to speak in their own defense?

      And, you, smug Consumerists, where’s the sympathy for someone who thought she was doing the right thing and had her home — her freaking home?!?!?! — stolen from her.

      You are a heartless bunch.

      • pecan 3.14159265 says:

        Are you a lawyer? I’m not, but I know it’s not like it is in Law and Order . There are sometimes reasons why defendants can’t speak in their own defense. You can’t just talk. Plus, it wasn’t her versus the scammers, it was her versus the bank. The bank didn’t do anything wrong in this case.

        And as for “We have had librarians subjected to control and restriction by top secret courts, complete with secret judges where not even the librarian not her lawyers are actually told the charges against her.”

        Erm what? Citation.

        • s73v3r says:

          Gag orders stemming from the USA Patriot Act. I believe there is one case in the entire history of the Patriot Act where the librarians refused to comply with the warrantless request for info and the ensuing gag order.

    • GearheadGeek says:

      I think what happened was that the court perceived her as not having standing, because they were foreclosing on the $230k note that the thief had taken out in his name (or his assumed name.) I’m not saying it’s right in the larger sense, but from the details they listed about the scam it seems like the real, registered mortgage was for $230k and wasn’t even in this woman’s name.

    • Buckus says:

      Was she at least allowed to opt for the enhanced pat-down?

    • JMarie says:

      Not being allowed to speak at a hearing is not unusual. You file papers.

  4. Alexander says:

    Just closed on a house two weeks ago and as expected I’m getting all sorts of letters for insurances of all kinds, house remodeling and even a company offering to make the mortgage payments on my behalf! (I send them the money, they send it to the bank!) The real doozy though was a hand written note, addressing me by my first name and urging me to call them (no name, just a phone) about the $2,000 upgrade on my home they forgot to give me when I closed! I should really call the number and see what have to say, just for fun.

    • Nuc says:

      Please call and report back. Might be good for a chuckle.

    • evilpete says:

      Yes, Please call them and report back!!

      • mga says:

        Probably best not to call. I believe by calling them from your phone, that opens up the line of business communication that gets them around the do-not-call registry. Of course you can then opt-out, but they may say “we will gladly do that. you may still receive solicitations for the next month while your opt-out request propagates through the system”

    • catastrophegirl chooses not to fly says:

      call them and tell them your return number is the consumerist tip line.

    • YorkBiblos says:

      cosign with all above

    • njack says:

      I just closed on a refi and have also received a steady stream of “mortgage insurance” offers as well as home improvement solicitations.

  5. evilpete says:

    I am a little surprised this is still happening given the rectum inspections the Banks require to get a house loan these days.

    • lettucefactory says:

      The loan was taken out during the boom (late 2005 or 2006). It’s just only getting to foreclosure now.

      • s73v3r says:

        Still, nowadays getting a home loan is about as invasive as a TSA screening. Yet, the banks are able to streamline foreclosures like this?

  6. AI says:

    Sounds like Judge Jeffrey Rosinek is the issue here.

  7. frank64 says:

    Argent Mortgage was the wholesale arm of Ameriquest. Both were sleazy companies, It appears the loan was at least questionable. A stated income loan that wasn’t verified, not even looking at the shady title transfer. A mortgage broker needed to apply to be able to sell each lenders loans. I would think that Argent had some responsibly here. If they are not in business then the quality of the loan, and the risk of fraud should go with the packaged security.

    I guess I am naive, but I think the woman should have gotten some redress in court. Very sad that someone was taken advantage of multiple times, and the courts seem to be one of the instruments. Why not tell the holder of the loan they bought a crappy loan, pound sand?

  8. Murph1908 says:

    “Never do a deal with the first guy pitching it to you.”

    I have also learned from action movies, if you are in the middle of some dangerous intrigue, don’t take the first cab that pulls up.

    • Red Cat Linux says:

      Strangely enough, I had to apply this lesson once. I was followed getting off from a bus in Brooklyn by a man who freaked me out enough to make me walk past my house as if I didnt live there, and keep going. On the next block a car pulls up along side with two more guys offering to give me a ride to get away from creepy guy #1.

      I’m backing away from the car when I spot a police car and wave it down. Creepy guy evaporates, and creepy car peels away into traffic. I was probably 14 at the time. Who says you don’t learn anything from TV and movies?

      • Murph1908 says:

        Damn. Glad you made it out ok.

        Some good street smarts you seemed to have at 14. I suppose that comes with growing up in Brooklyn.

        I grew up in a small town. I lived on the south side of Chicago for several years, and when I came back to my small town, I laughed at some of the things I caught myself doing. Like when a friend and I drove into a parking lot where some local kids hung out sitting on their hoods, I unconsciously reached over and turned down the radio so as not to draw attention to us.

        Those kids weren’t bangers, just bored high schoolers who have nothing to do on a fall night in a small town.

        The closest I came to a situation like yours is when I was walking home from work, around 8:00 in November (dark). I spot 2 guys down an alley. I round the corner of the block, and they are now heading towards me from about a 2:00 angle. I put my hands in my pockets and grab my ‘throw’ money. One goes in front of me, one goes behind. I am on alert. Guy in front of me must have sensed it. He gave his buddy a slight shake of the head (no), and moved on.

  9. Ouze says:

    I feel terrible for what happened to this woman. Unfortunately, I don’t see a way to keep the bank from taking her house, as they legitimately own it now. While the fraud defense is fair, all it does is push the boning from her onto the bank; and she’s the one who got scammed. It’s not her fault, but it’s not the banks either.

    A larger lesson to be learned from this is midway in the story – it mentions that her coworkers were “tapping the equity in their homes” to redo kitchens, pay down debt, take vacations: no. If it’s your primary home, it’s not your piggy bank, it’s the place you live.

    • Kate says:

      Uhm, the usual way to finance a remodel is to use the equity in your home. It only makes sense, if the value of the home is being improved, you use the loan to finance it.

      • Ouze says:

        Yes, and generally speaking, how has that worked out for people in the last 2 years?

        It’s a bad idea, if it’s the place you actually live.

  10. damageinc says:

    Is it that hard to just type out the word refinance? Or is “refi” the hip new slang now?

    • Bativac says:

      It’s embarrassing to hear my co-workers (all of whom are adults, physically at least) talk about “doing a refi” when what they mean is “refinancing.”

  11. galm666 says:

    So with all of these people involved more than likely going to jail, how is this woman still going to lose her home? I mean, if the paperwork is all fraudulent for everything, should the deal be null and void and this woman be allowed to keep her home?

    • Evil_Otto would rather pay taxes than make someone else rich says:

      What planet do YOU live on?

    • Ouze says:

      Lets use an analogy. Lets say you go to Applebees or Chilis or whatever. Lets say you order a steak. At the end of the meal, a teenager comes up to you and ask you to pay your bill. You do so.

      It turns out, a minute later when the real waiter comes back, that the teenager didn’t work for the restaurant. The good news is, there was a cop in there, and he arrested the teenager for fraud. Unfortunately, he already ate your money and it’s gone.

      Do you still have to pay for your steak?

      • galm666 says:

        I think your analogy is a bit off. To be correct, the teenager would have to be acting in the role of waitstaff from the very beginning, getting a “steak” for the customer, bringing them a “steak”, and then pocketing the money. The customer would then be charged for the “steak”.

        And “steak” is in quotes as this woman clearly didn’t get what she was paying for. It’s more like ordering a steak from someplace, getting a half-eaten burger, expecting to pay for just the one steak, then being charged for 3 steaks, and then getting arrested for a dine-and-dash.

        The bank itself shares part of the blame for working with a shady mortgage company. The mortgage company and its friends are just outright frauds.

    • jim says:

      was all the money for the loan recovered and given back to the bank? doubt it.

  12. donkeydonkeypublicbathroom says:

    She should have bought volcano insurance.

  13. jim says:

    so…. what exactly was her defense? some guys screwed me so the bank should eat the loss?

  14. dush says:

    How can your counsel not be allowed to speak in your defense?

  15. kobresia says:

    This seems like a case where there is no “interpretation” necessary. Either the bank has the proper paperwork, signed by the home’s owner on the recorded deed, or they don’t.

    It does sound like the paperwork is in order, which is why the judge simply found in favor of the bank in the hearing without hearing sob stories. The magnitude to which the homeowner is stupid and gullible doesn’t really have any bearing on the case; if the bank disbursed $230,000 with the home as collateral, and they had the homeowner’s signature to authorize the lien, that is all that matters. If she did not sign the paperwork authorizing the lien for $230,000 against her property, to be given to some guy who worked at a fake Blockbuster, then the bank should eat the damages.

    Somehow, I bet she did sign all the paperwork without reading it or running it by an attorney, and thus lost her most valuable asset. That’s a hard way to learn the lesson, and it doesn’t really sound like she *has* learned the lesson from the article.