A real estate group is facing charges of equity stripping in connection with the so-called "foreclosure rescue" sale and leaseback of homes of several Maryland homeowners, according to allegations set forth in three civil lawsuits filed by the homeowers in Maryland state courts. The following defendants are named in one or more of the lawsuits which accuse them either of (1) taking unfair and illegal advantage of the financially strapped homeowners involved, or (2) playing some part in assisting the foreclsoure rescue operator to carry out the alleged "rescue" scheme:
- Harry L. Borden, National Investors Realty Management, LLC, Dale Ross, Pioneer Realty, Inc., Michael Yette, MJ Investors, Realty Executives Main Street USA, John J. Harrison, John J. Harrison Company, Inc., Relocation Management, LLC, Joshua J. Harrison, bankruptcy attorney John D. Burns, Esq., The Burns Law Firm, LLC, real estate agent Jeannette Gray and Title 2000, LLC.
- Mortgage lenders Resource Mortgage, Lehman Brothers Bank, FSB, and Aurora Loan Services, who provided the mortgage financing as part of two of the foreclosure rescue transactions, were also named as defendants.
In the second case, Tillery vs. Borden, et al., the homeowners allegedly had $185,631.21 in equity in their home, yet they only received $25,143.83 for their equity (see Complaint - page 23, paragraph 28).
In the third case, Mackall v. Yette, et al., the homeowners allegedly had at least $117,000 in equity in their home, yet received absolutely nothing for their equity (see Complaint - page 14 paragraph 24).
Among the state law claims for relief made by the homeowners in the lawsuits are:
- Intentional Misrepresentation, Deceit, & Fraud, Breach of Contract, Breach of Fiduciary Duty, Conversion, Unjust Enrichment, Breach of the Implied Covenant of Good Faith & Fair Dealing, Civil Conspiracy to Commit Fraud, Aiding and Abetting Fraud, Injurious Falsehood: Disparagement & Slander of Title, and the Maryland Equitable Mortgage Doctrine (7-101), Protection of Maryland Homeowners in Foreclosure Act (7-301 to 7-321), Maryland Mortgage Lender Law, Maryland Secondary Mortgage Loan Law.
- Declaratory Judgment, Quiet Title, Constructive Trust & Resulting Trust.
The lawsuits also contained allegations of violations of the following Federal laws:
- Truth In Lending Act ("TILA"), Homeownership & Equity Protection Act ("HOEPA"), Federal Reserve Board Regulation Z ("Reg. Z"), and the Real Estate Settlement Procedures Act ("RESPA").
An additional claim for professional legal malpractice was made in each of the three cases against bankruptcy attorney John D. Burns, Esq. and The Burns Law Firm, LLC., who purportedly was providing legal representation to the homeowners in each of the three cases.
Further, attorney Burns and his firm are alleged to have conducted many transactions over several years with some of the other defendants and he is alleged to have steered his bankruptcy clients to the other defendants to commence the fraudulent “foreclosure rescue scams.”
In addition, the homeowners, who had filed for bankruptcy, were allegedly fraudulently advised by bankruptcy attorney Burns (as well as some of the other defendants) that to save their home from the pending foreclosure, the homeowners must voluntarily dismiss their bankruptcy cases and sell their home to the foreclosure rescue operator.
The homeowners are seeking to void the title transfers and void the mortgages placed on their homes in the equity stripping transaction, as well as seeking actual damages and significant punitive damages.
- Hurley vs. Borden (Calvert County Circuit Court),
- Tillery vs. Borden (Prince George's County Circuit Court),
- Mackall vs. Yette (Calvert County Circuit Court).
October 30 2010
This blog has been notified by John J. Harrison, one of the defendants in the foregoing lawsuits, who has advised that, in the matter of Tillery v. Borden, the judge has, as of September 2010, ruled in favor of him, his son Joshua J. Harrison, and his associates and the case has been dismissed.