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$35 Million Mortgage Fraud Uncovered

capitalgazette.com | December 2, 2013

GREENBELT, Md. — Eight people have been indicted in an alleged $35 million mortgage foreclosure rescue scheme to cheat lenders and homeowners facing foreclosure, a case authorities said is likely Maryland's largest mortgage fraud case ever.

Federal prosecutors said Thursday that owners of the Metropolitan Money Store targeted homeowners who risked losing their homes and then used straw buyers, fraudulently obtained loans and inflated real estate appraisals to strip equity from more than 100 homes in the Washington area. The homeowners seeking help ended up losing whatever money they had invested and their homes.

"They walked away with nothing. No house, no credit and no equity," Maryland U.S. Attorney Rod Rosenstein said.

The 25-count indictment unsealed Thursday names Lanham-based Metropolitan Money Store and its president, Joy Jackson, 40, who allegedly used some of the money to pay for a lavish wedding for herself and Kurt Fordham, one of the other seven indicted.

The charges include conspiracy, mail fraud and money laundering. Prosecutors also seek the return of $35 million in fraudulent loans that the group allegedly took out from lenders. Each count of the conspiracy carries a maximum penalty of 30 years in prison.

Jackson and Fordham were being held in North Carolina on Thursday pending extradition to Maryland, said Marcia Murphy, a spokeswoman for the U.S. Attorney's office in Maryland. Attorneys for both could not be located, and a phone message left at a Fort Washington address listed for Jackson was not returned.

Mortgage foreclosure rescue scams, which promise to help struggling homeowners stave off foreclosure and keep their homes, have become a major problem as the housing market continues to fall, according Maryland officials. Unsuspecting owners often sign over their homes and then find they are the victims of fraud.

In Maryland alone, mortgage fraud cases, including rescue schemes, have more than quadrupled over the past two years, according to Tom Perez, the state's secretary of labor and licensing.

"The industry was fraught with the potential for corruption," he said.

Maryland investigators began to hear complaints from homeowners about Metropolitan in 2006. According to the indictment, Metropolitan lured in strapped owners through ads on television, radio and in print. The owners were told they didn't qualify for a refinancing of their mortgage, and in return were offered a "Foreclosure Reversal Program."

Under the program, they signed away their title to third parties, but were supposed to get help from Metropolitan to obtain a better mortgage that would allow them to repurchase the home.

Instead, Metropolitan allegedly used the straw buyers, who were paid $10,000 each, to take out big loans on the homes using inflated appraisals. They then stripped any equity out of the homes — allegedly $10 million — and allowed the homes to fall into foreclosure.

Prosecutors say besides the wedding, the group used the $10 million in equity they pocketed to pay for things such as gambling expenses, overseas trips, fur coats, cars and student tuition.

Jackson and Fordham, of Fort Washington, were arrested Thursday morning in North Carolina. Jennifer McCall, 46; her husband Clifford McCall, 47; and McCall's daughter, Chandra Jones, 30, were all also indicted. Also named were Wilbur Ballesteros, 32; Ronald Chapman, 33; and Fordham's sister Katisha Fordham, 35.

Four of them were ordered released Thursday pending a trial, and the fifth, Jennifer McCall, must produce her passport in order to be released. Chapman, the sixth person, remains at large.

Several of the defendants' and their families members would not comment as they left the courthouse Thursday.

A class-action lawsuit involving as many as 400 people is also pending against Metropolitan in federal court. Some homeowners have managed to stay in their homes, but the lenders are still going forward with foreclosures despite the alleged fraud, according to Phillip Robinson, a lawyer for the plaintiffs.

 

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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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