Sunday, June 24, 2012

Target Of Florida AG Probe Into Debt Settlement Scheme Now Peddling Purported Mortgage Cancellation Program To Homeowners Using Quiet Title Actions

In West Palm Beach, Florida, The Palm Beach Post reports:

  • By the time the stranger called that Thursday in March, suburban Boynton Beach homeowner Marcie Lowe was out of options to fix her failed real estate wager. The savvy 78-year-old played her hand well for years in the home-buying game, picking up properties in California and Key West to rent to kids in college and bartenders serving drinks on Duval Street.

  • But she got caught with a 10 percent interest-only loan on her gated Valencia Isles home, which is now worth hundreds of thousands of dollars less than the $571,000 she paid in 2003. “What would you think of this?” Lowe remembers the caller saying.

  • He proposed a fresh strategy to end-run the banks — a complex legal plan that begins when you deed your home to the Fort Lauderdale-based Fidelity Land Trust Co. for an average fee of $2,500. Conceived, at least in part, by a man barred by the state from engaging in consumer debt-related services, the trust then sues the bank to cancel your mortgage while offering a new contract with lower payments. “He said more than 250 people were already set up for this,” Lowe recalls.

  • Fidelity Land Trust has quietly amassed about 80 Palm Beach County deeds since it registered as a limited liability corporation with the state in December. The firm is the owner of record for another 76 properties in Broward and Miami-Dade counties, according to clerk of court records.

  • If the trust is successful in canceling the mortgage through a quiet title action, the homeowner is still responsible for the loan debt, or note, but the trust then tries to buy that debt from the bank for pennies on the dollar. Because the debt no longer has collateral in the form of the home, the idea is the bank will be more willing to negotiate.
  • Within the layers of corporations tied to Fidelity Land Trust is Edward C. Tudor — a registered fictitious name for Edward Cherry, according to the Florida Department of State Division of Corporations. State records show the managing member of Fidelity Land Trust Co. is Fidelity Land Trust Partners, whose “member or authorized representative” is Edward C. Tudor.

  • Cherry was barred in a 2009 consent judgment by Florida’s attorney general from dealing in consumer debt-settlement services after a state investigation concluded companies he was involved with “diverted millions of dollars to themselves and a coterie of families and associates.”

  • In 2010, the attorney general accused Cherry of violating the order after he allegedly conducted debt-related seminars that charged attendance fees of upwards of $95, according to a pending Broward County court case.
For more, see Underwater owners try to beat the bank (Post Exclusive: Homeowners seeking lifeline).

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