NJ Trial Court Ruling Slams Foreclosure Rescue Operators With $470K Bill For Predatory Sale Leaseback-Peddling Racket Targeting Deep-Debted Homeowners

In Union City, New Jersey, The Jersey Journal reports:

• Two former Union City firms and two former city residents have been ordered to pay $470,000 in fines and restitution for defrauding struggling homeowners through deceptive mortgage foreclosure "rescue" schemes, officials said [].



• "These defendants promised struggling homeowners help, but in the end only helped themselves," said state Attorney General Jeffrey S. Chiesa of PSRE Holding Company, Property Solutions, Edward Toledo and Raymond Vega. "For their callous exploitation of people in need, they are now, appropriately, being held accountable," said Chiesa.



• The defendants typically contacted homeowners in foreclosure shortly after their homes were auctioned off and within the 10-day period the homeowners could keep the home by paying outstanding liens.



• The defendants promised to save the homes by paying off the mortgages within the 10-day period and they promised to help the victims get financing that would allow them to keep their homes.



• In this way, the defendants were able to buy the homes for the amount owed on the mortgage, usually far lower than what the properties would have sold for. As a result, the victim lost the right to keep the difference, which in one case was more than $150,000, officials said.



• The defendants would then enter into a sale-leaseback agreement with the victims, giving them a chance to repurchase their homes on very unfavorable terms. Consumers who entered these agreements were able to remain in their homes for a period, but the arrangement typically did not last.



• In some cases the monthly use and occupancy payments made by the victims were higher than the mortgage payments they had not been able to afford. In the end, three victims in the state's case either vacated or were evicted by the defendants -- even when they had remained current with the higher monthly payments.



• In several cases, the defendants made false sworn statements that the victims had failed to make any of their use and occupancy payments, officials said.

Source: 2 men, Union City businesses fined for $470,000 in mortgage foreclosure rescue scam, authorities say.

For the New Jersey Attorney General press release, see Attorney General Announces $469,500 Mortgage Fraud Trial Decision (Defendants Must Pay Civil Penalties to State, Restitution to Consumers).