Tuesday, November 3, 2009

Philly DA, Feds Probe "Dream Killer" In Suspected Rent To Own Scam Peddling Shabby Homes To City's Poorest; Victims Paid Thousand$, Now Face The Boot

In Philadelphia, Pennsylvania, the Philadelphia Daily News reports:

  • WIND and rain blew through the shell of a house on Monmouth Street. The ceilings and walls had gaping holes; the shower and broken toilet could be seen from the floor below. There was no front door, no kitchen, no heat. But to Isabel Santos, this derelict Kensington house held the promise of her first real home, her slice of the American Dream.

  • In 2002, Santos signed an "installment-sale agreement" with a Philadelphia company owned by Robert N. Coyle Sr., a real-estate mogul and self-made millionaire, widely known for peddling shabby homes to the city's poorest. Under the agreement, Santos would own the house in five years. Santos and her ex-husband sunk at least $20,000 of their own money to create a home out of rubble. But instead of a deed, Santos recently got slapped with a foreclosure notice, and she and her teenage son, Jose, could soon be on the street. That's because Coyle defaulted on a mortgage he took out on the house. Santos felt swindled.

  • So did dozens of others, the city's downtrodden, many living paycheck to paycheck, who put every last dime into fixing up homes they thought they'd own one day. Now they're just one step away from homelessness. They blame one man - Coyle, a man they call a "dream killer," a "slumlord millionaire." The Daily News has learned that Coyle, 64, is at the center of a massive fraud investigation being conducted by the Philadelphia District Attorney's Office and federal authorities.(1)(2)

For more, including a profile of Coyle and his suspected racket, see Slumlord sold them lies, many say (To tenants, he's a slumlord, a swindler, a dream-slayer; now he's the subject of a fraud investigation).

(1) Among the reported allegations hovering over Coyle are that he:

  • Promised people they could rent to own their homes, without being able to deliver on such a promise,
  • Obtained more than $15 million in bank loans on nearly 300 homes he rented out, then stopped making bank payments and padlocked his Allegheny Avenue rowhouse real-estate office in Port Richmond. The houses are now headed for sheriff's sale,
  • Forged hundreds - possibly thousands - of housing-inspection licenses that allowed him to rent the homes. Many of them had no heat or water, seeping sewage and rotted floors - violations that would've prevented Coyle from getting licenses,
  • Failed to pay the city hundreds of thousands of dollars in property and business taxes and water fees, leaving tenants without water.

(2) Reportedly, at least nine attorneys, some of whom work for nonprofit legal agencies, are fighting to stop the sheriff's sales on behalf of clients who live in Coyle's homes. They argue that their clients have ownership rights, though the banks disagree. According to the story, by law, all home-sale agreements must be in writing. But there are three exceptions: If you are in possession of the property; if you've made significant improvements; and if you've paid some or all of the purchase price for a few years and/or paid off any liens, according to Kelly J. Gastley, staff attorney at Philadelphia Volunteers for the Indigent Program (VIP). What's at stake is "enormous," said Stefanie F. Seldin, a managing attorney for VIP. "The man is evil," she said. "He's taken these folks with limited English proficiency, literacy and means, and sold them a dream. Instead, he sold them a lie." rent to own lease purchase option scams yellowstone

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