Monday, October 1, 2012

Florida AG Files Civil Suits Tagging So-Called Land Trusts Peddling Schemes Purportedly Designed To Make Underwater Mortgages Disappear

In Fort Lauderdale, Florida, The Palm Beach Post reports:

  • The assets and operations of several South Florida land trust companies, related firms and their owners were frozen by the state attorney general’s office Tuesday in a complaint claiming they made promises to struggling homeowners they can’t fulfill.

    The companies have sold hundreds of homeowners statewide on a complicated legal “scheme” that pledges to make their underwater mortgages disappear.

    About 90 Palm Beach County homeowners have signed their deeds over to one of the land trusts as part of the plan. The homes range from million-dollar waterfront mansions in Boca Raton to $60,000 condominiums west of Florida’s Turnpike.

    A so-called “quiet title” lawsuit is then filed by the trust against the homeowner’s lender to try and cancel the mortgage while also setting the homeowner up with a new lower mortgage or other payment plan to the trust, the complaint says.
  • The civil complaint brought under Florida’s Deceptive and Unfair Trade Practices Act charges that the defendants;

    • Wrongfully guaranteed the land trusts will cancel the homeowner’s mortgage through legal proceedings that will leave the borrower with equity in their home.

    • Misrepresented that an assignment of mortgage is not valid unless it is recorded.

    • Charged an advance fee before completing foreclosure-rescue services.

    • Misrepresented that the homeowner’s mortgage is not enforceable against the land trust as a subsequent buyer even though the trusts paid nothing for the deed.
For more, see Florida attorney general files suit against land trusts, calling business unfair and deceptive (Hundreds of Florida homeowners have signed their deeds over to the trusts).

For the Florida Attorney General press release, see Attorney General Bondi’s Office Protects Distressed Homeowners from Mortgage Relief Scam.

For the lawsuit, see State of Florida v. Cherry, et al.

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