"Fractional Interest Deed Transfer" Foreclosure Rescue Scam Slammed By Texas Bankruptcy Judge, Attorney General

From the Texas Attorney General's office:

• Texas Attorney General Greg Abbott's Bankruptcy and Collections Division successfully intervened in a federal bankruptcy involving an illegal residential foreclosure rescue scheme. In that case, Judge Stacey G.C. Jernigan sharply criticized fraudulent mortgage rescue schemes, which she referred to as “a new cottage industry of bottom feeders.”

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• The case involved two fraudulent companies promising to stave off residential foreclosures: North American Foreclosure, L.L.P., of California, and Jireh Capital Services, L.L.C., a Dallas-area affiliate. Jireh and its operator, David Curtis, who cooperated with the Attorney General’s investigation, appeared in court and were ordered to pay a $48,000 civil penalty and $10,000 in attorneys’ fees. [...] Judge Jernigan ordered the North American and its president [Jeremy Mitchell a/k/a Jason Mitchell] to pay $100,000 in punitive damages as well as $48,000 in state civil penalties, attorneys’ fees and restitution [...].

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• Curtis convinced the [homeowners] to convey one percent of their home’s value to an out-of-state person who was in bankruptcy, or would agree to file “bankruptcy.” The [homeowners] were told that by transferring a fractional ownership interest in their home to a third person in bankruptcy, they could automatically postpone their foreclosure date. [...] Under the “client agreement,” the [homeowners] were to pay North American $650 per month for as long as its “services” were needed.

The judge also referred North American and Jireh Capital to the U.S. Attorney’s Office for an investigation into potential criminal violations. For more, see Bankruptcy Judge Condemns Mortgage Rescue Scheme, Applauds Attorney General Abbott's Efforts (Calling defendants ‘bottom feeders,’ judge exacts punitive damages).

For the related Federal Bankruptcy Court court documents setting forth all the underlying facts in this case, see:

• Final Judgment and Permanent Injunction,
• Summary of Facts, Judge's opinion and order (recommended reading for anyone wanting some perspective on "fractional interest" home title transfers on the eve of foreclosure, use of backdated deeds for this purpose, conveyances to unwitting debtors in bankruptcy in far away places, the frequency of use of this scam, and other interesting points).

Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.