In Broward County, Florida, the South Florida Sun Sentinel reports:
- In danger of losing her home, Robin Klein one day found a flier in her mailbox that promised solutions to her loan-default troubles. "It sounded so romantic: 'Home Rescue,'" the Cooper City woman recalled. "It was an impression I got that they were being altruistic and kind, and helping people."
- Thinking they were staving off foreclosure, Klein and her husband signed a stack of documents furnished by Home Rescue Foundation associates. Among them was a deed transferring ownership of their house, valued at $650,000, to a trust controlled by the foundation's founder, Bradley L. Hertz.(1)
- Robin Klein alleged in a lawsuit against Hertz that the true implications of the deal were never explained to her. Hertz says all clients were dealt with fairly and honestly. "Nobody was fooled. Nobody was coerced," Hertz said in an interview. "The only place they were probably fooled was in their mind. We had full disclosure."
- A Sun Sentinel investigation found that after promising to help save people's homes, Hertz gained control of dozens of South Florida properties whose owners had become financially overextended and fallen behind on their mortgage payments. In the process, Hertz left an extensive trail of litigation, foreclosure lawsuits and court judgments against him and one of his companies totaling more than $3.2 million — and many of the homeowners lost their properties in the bargain.
- In the Kleins' case, they managed to regain their house, but to do so, Robin Klein had to declare bankruptcy. Her lawyer alleged Hertz's associates "falsely and fraudulently" convinced the Kleins to sign the documents by telling them the home would stay in their names and that the "purpose of the transaction was to save their home,'' according to the lawsuit. A federal judge voided the new deed, an action Hertz did not contest.
- "People who are scared and desperate, they are taking advantage of them," said Klein, who sought help from the foundation in the fall of 2006. "It's wrong."
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- In interviews with the Sun Sentinel, a half-dozen homeowners said Hertz and his associates told them that if they signed their homes over to a Hertz company, or put them in a Hertz-controlled trust, they could avoid foreclosure.
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- From March 2008 through September of last year, the Cooper City-based foundation was the subject of 10 consumer complaints filed with the state. Three lawsuits also have been filed, claiming Home Rescue misrepresented its services.
- The consumer complaints, filed by homeowners or their lawyers, are being investigated by the Florida Office of Financial Regulation. Some complainants said the foundation's mailings were deceptive because they looked like official government or court documents. Four homeowners complained they paid for help in modifying their mortgages, but got nothing in return. Hertz denies that he offered loan modification services.
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- After taking title to homes, Hertz often got in trouble with the banks himself for not making mortgage payments. Hertz and Y3K have been named as defendants in two dozen foreclosure suits, court records show, resulting in more than $3.2 million in judgments against them for principal and interest on home loans.
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- As South Florida's housing market continues to struggle, Hertz is trying to fend off several foreclosure actions, court records show. He filed for bankruptcy in August, but the case was dismissed. In September, he canceled the corporate registration of The Home Rescue Foundation. He lost two more homes to foreclosure in March.
For the story, see To keep homes, some South Floridians signed over deeds — and lost their properties anyway (Home Rescue Foundation's founder says disgruntled clients have only themselves, poor real estate market to blame).
(1) According to the story, Hertz earlier ran a home-health agency in the 1990s that participated in Medicare before going into the foreclosure rescue business. Two of his employees in that scam became federal whistleblowers and alleged in a lawsuit, later joined by the government, that Hertz's company was defrauding Medicare.
Reportedly, Hertz, now 57, pleaded guilty to Medicare fraud and was sentenced to a year of imprisonment in February 2001. He and his company reached a settlement with the government for improperly billing Medicare for entertainment, meals and his father's salary for a no-show job, according to court records. He agreed to repay the government $1.6 million.
After his release from prison, Hertz started a new company, Y3K Investments, which assumed ownership of its first home in Broward in May 2002, property records show. Y3K Investments began doing business as The Home Rescue Foundation in December 2003. Homeowners interviewed by the Sun Sentinel said they learned of the foundation through its fliers or advertisements.
