Oregon Regulator Issues C&D Order, $250K Fine Against Foreclosure Rescue Operator For Alleged Securities Violations Tied To Sale Leasebacks

From the Oregon Department of Consumer and Business Services:

• The Oregon Department of Consumer and Business Services (DCBS) issued a cease-and-desist order and assessed $250,000 in fines against Anthony "Tony" Schwartz and two businesses he controlled for selling interests in foreclosed homes he seized in a complex foreclosure rescue scheme.

• Schwartz, who owned REI Exchange, LLC and TMG Ventures, Inc. in the Portland area, raised nearly $850,000 by convincing buyers to purchase fractional interests in real estate ―land trusts from the sale of homes seized from owners unable to repay their loans. Schwartz, who was not licensed to sell securities, falsely represented that the unusual, unsecured investments were safe. In addition to the fines, Schwartz is prohibited from raising capital, formally or informally, from other individuals for use or investment on their behalf.

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• Under a series of complex legal documents, Schwartz lent money to struggling homeowners – some facing imminent foreclosure. In exchange for the home’s title, Schwartz made payments on behalf of the homeowner but would take the home when the homeowner failed to repay the loan. Schwartz claimed the right to seize and sell a house and then pocket – in some cases – significant equity.(1)

For the DCBS press release, see State sanctions promoter of "foreclosure rescue" scheme (Tony Schwartz promised to help distressed homeowners, then illegally sold interests in homes).

(1) According to the story, the Oregon Mortgage Rescue Fraud Protection Act of 2008 protects homeowners from such foreclosure rescue schemes by requiring those who purchase a homeowner’s equity in order to avoid foreclosure to ensure the homeowner has the ability to buy back the home and entitling the homeowner to a share of the proceeds if the home is resold quickly. Schwartz’s activities reportedly occurred before the law took effect.