Homeowner Facing Foreclosure Falls For Sale Leaseback Ripoff; Civil Suit Against Suspected Scammer In Works

In Philadelphia, Pennsylvania, The Philadelphia Inquirer reports:

• Edward Harper, 73, retired from the Philadelphia Housing Authority, missed a couple of $500-a-month mortgage payments in 2007 because his daughter, who lives with him, needed the money. Facing foreclosure, he searched on the Internet for help, filled out applications, and was contacted by Fresh Start Financial Services in Mount Laurel.

• "The lady from Fresh Start told me she would give me a 'buy-back mortgage' " and said that he would not have to pay his mortgage for a year, he recounted. After that, he would be given a mortgage in line with his income, a combination of Social Security and a pension.

• He signed the papers. Seven months later, he was told that his payments would be $1,200, and he was still receiving what he said were "scary" letters from his original lender. Harper contacted Community Legal Services.(1) His lawyer, Dan Urevick-Ackelsberg, discovered that the house had been purchased by a "straw buyer" who was related to a broker at Fresh Start.

• Urevick-Ackelsberg said that among the sheaf of papers that Harper had signed was a quitclaim deed that handed legal ownership of the house to Fresh Start Financial. Harper and others similarly cheated "were not represented at the closing," the lawyer said. The straw buyer's lender was Sovereign Bank, he said. The bank has foreclosed on the straw buyer, and has a sheriff's sale pending.

• Urevick-Ackelsberg will file a civil suit against Fresh Start on Harper's behalf. He has asked Sovereign to delay the sale until it sees the lawsuit. The bank hadn't notified him of its decision as of Monday afternoon. Harper remains in his home.

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• Many scammed homeowners suffer in silence, ashamed to have fallen into the trap. "Usually, after the scam, they tend not to come to us," said Patricia Hasson, president of Consumer Credit Counseling Service of Delaware Valley in Philadelphia.

For the story, see Philadelphia to launch scam-alert program on mortgage modifications.

(1) According to their website, Community Legal Services (CLS) of Philadelphia provides low-income Philadelphia residents with advice and representation in civil legal matters; advocating for their legal rights; conducting community education about the legal issues that affect them; and never charges attorney’s fees to its clients, although in some cases clients are asked to pay for court filing fees or other out of pocket expenses.