Tuesday, November 13, 2012

Foreclosed Borrower Accuses Hard Money Lender Of Pocketing Her $2M In Surplus Sale Proceeds In Excess Of Outstanding Debt Owed After Public Auction

In Paulding County, Georgia, WGCL-TV Channel 46 reports:

  • A widow from Paulding County is continuing a decade-long fight for her children's inheritance that she says was taken by a hard money lender.

    Linda Bullock, of Dallas, said Ronald Lipsitz, owner of Capital Mortgage Corp. and Realty Resources Corp. on Hammond Drive in Sandy Springs, made $2 million from foreclosing on Bullock's land in 2001. Bullock said that by law, that money is hers.

    "The worst part about it is the way it happened," said Bullock, who took out two loans with Lipsitz totaling $585,000 in 1997 and 2000. Bullock said she borrowed the money to build rental properties that would help her and her husband pay rising taxes. But the Bullocks got behind in payments and Lipsitz foreclosed on 300 acres of land they used as collateral. The land is a portion of property that had been passed down in the Bullock family for generations.

    After foreclosing on three plots of land, Lipsitz filed three court documents known as deed under power that showed he paid $938,655.91 for each piece, for a total of $2.8 million.

    "He's only entitled to what's owed to him - less than $800,000; but he kept the $2 million which is illegal," said Bullock.

    According to Georgia foreclosure law, if the foreclosure sale price is more than the unpaid debt, the surplus must be paid back to the original property owner.

    "It's devastated her financially and emotionally," said consumer attorney Chuck Pekor. Bullock hired Pekor, a former federal prosecutor, to investigate her case after she lost a lengthy court battle with Lipsitz.

    "The official foreclosure sale was for considerably more than the face amount of what she was owed. They just ignored that. Never paid anything back," said Pekor.

    Documents filed in Paulding County court show Lipsitz sold some of the property for $2.2 million. According to his website, he's actively working to sell the rest of the property.

    "Those conclusions are completely wrong and we have sent you adequate proof," said Lipsitz when questioned by CBS Atlanta outside his office. Lipsitz repeatedly declined to be interviewed on camera. In documents provided by his spokesperson, Lipsitz insisted there was no surplus to pay Bullock and that he paid $938,655 for all three pieces of land – not each one.

    Lipsitz declined to provide tax records to CBS Atlanta News which could clear up how much he paid for the land. One thing is for sure: Lipsitz profited nicely from Bullock's valuable land.

    Bullock said she plans to continue fighting for the $2 million she intended to leave for her children. "You're just not going to get away with this. It's just too bad. Too horrible," said Bullock.

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