Fidelity Land Trust Busted! Attorney General Bondi’s Office Protects Distressed Homeowners from Mortgage Relief Scam!
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Piggybankblog posted on 09/26/12
Cross liked with myfloridalegal.com
TALLAHASSEE, Fla.—Attorney General Pam Bondi’s office has obtained a temporary injunction and asset freeze against a company that allegedly preyed on distressed homeowners, defrauding them out of thousands of dollars in a mortgage relief scam. According to the complaint filed by the Attorney General’s Office, Edward Cherry, Lawrence Diodato, Paul Gellenbeck, Shane Frankovic, Anthony C. Pintsopoulos and their businesses charged homeowners $3,500 in up-front fees and, in return, falsely guaranteed that the defendants would “void” the homeowner’s “upside-down mortgage.” The Broward County Circuit Court today ordered the defendants to immediately cease operations and freeze their assets.
“This mortgage relief scam targeted hundreds of distressed homeowners who were already facing financial hardship,” stated Attorney General Pam Bondi. “By obtaining a temporary injunction and asset freeze, we have stopped this company from preying on even more of Florida’s homeowners.” An example of the allegedly misleading claims made by the company is that they would work with property owners who are currently in distress or upside down in their mortgage. The business claimed that they were the only ones that offered Florida homeowners the chance to refinance an upside down mortgage and regain equity in their homes by permanently cancelling or voiding the homeowners’ mortgages. The temporary injunction bars the company from advertising for or providing services to Florida homeowners directly or indirectly by which the defendants claim to cancel or otherwise void previously recorded mortgages so that the mortgages are not enforceable against defendants or any other party because the mortgage assignments were not recorded. The temporary injunction and asset freeze were obtained against: Edward Cherry, Lawrence Diodato, Paul Gellenbeck, Shane Frankovic, Anthony C. Pintsopoulos, The Fidelity Land Trust Company, LLC, The Sunshine State Land Trust Company, LLC, Florida Land Trust Services, LLC, Growth Capital Funding, LLC, August Belmont And Company, LLC, Esquire Litigation Support, LLC, Click Media Consulting, LLC doing business as Florida Home Rescue Mission and American Federal Trust, LLC, EsqLitigationSupport.Com, LLC, Zion Partners Irrevocable Trust, LLC, Zion Partners Irrev Trust, LLC, and their officers, affiliates, agents, servants, employees, attorneys and those persons in active concert or participation.
Other court documents below:
Cross linked with palmbeachpost.com
For some, it was the last hope to keep their homes and so they listened to the pitch rather than their gut.
They paid thousands of dollars, deeded their homes to a land trust company, and waited for the payout — a canceled mortgage, lower monthly payments, regained equity in their homes.
Foreclosure defense attorneys doubted the soundness of the trusts’ legal maneuvering. Trust managers assured they’d never lost a case. Florida Attorney General Pam Bondi called it a “scam.”
She shut down 12 South Florida land trusts and related companies on Tuesday, freezing the assets of the firms and their owners and leaving scores of homeowners unsure of their next step or how to get their deeds back. Although owners may no longer have title, they still owe the note, or debt, to the bank.
“I had an uneasy feeling about it, like if it was too good to be true, it probably was,” said Lee County resident Irene Arcario, who is one of an estimated 290 homeowners statewide who signed their deeds over to the trusts. “I have a real sick feeling in my stomach right now.”
Arcario said she wanted to cancel her deal with Fidelity Land Trust Co. weeks ago when she started getting bills saying she owed it $900-a-month on top of $3,000 she paid in the beginning.
“They persuaded me to stay in the program,” Arcario said about the company, which has a Boca Raton address in state records. “Then I got a letter saying I needed to pay them for foreclosure defense.”
Fidelity managers have denied the attorney general’s claims, which include making false promises and representations to consumers. The complaint, filed in Broward County, calls Fidelity’s legal theory that it can cancel a mortgage and quiet title “frivolous.”
Attorney Spencer Kuvin, whose Delray Beach firm is representing Fidelity Land Trust and its managing director Paul Gellenbeck, disagrees. He said Friday that he hopes to meet with the attorney general’s office soon and explain Fidelity’s legal process so that it will drop its complaint. Kuvin is also representing attorney Peter Bowers, who is not named in the attorney general’s complaint but has filed some of Fidelity’s lawsuits.
“The client is playing out their legal strategy in order to effectuate a good resolution on behalf of their customers,” Kuvin said. “Their concern is if they educate the banks on what their strategy is, the banks will be able to be ready for that strategy and respond. They are fighting to keep consumers in their homes.”
“This is going to be a huge mess for homeowners who transferred their properties,” said Boca Raton real estate attorney Marlyn Wiener. “Unless the trustees voluntarily transfer the properties back to the homeowners — execute and record a deed conveying the property — the homeowner is no longer the record title owner,” Wiener said.
Without title, the homeowner will find it difficult to do anything with the property, such as negotiate a loan modification, short sale, or refinance a loan, Wiener said.
Fidelity’s paperwork to clients says it will deed properties back to homeowners in the case of an “unfavorable” legal outcome.
“This has never happened,” a May e-mail says to one client, “but I would like to explain all possible outcomes.”
Lora Potts, also of Lee County, said she got her deed and $1,600 of a $3,200 payment back when Fidelity said itcouldn’t help her because she filed for bankruptcy — something she said she told it before signing up.
“With phone call after phone call and nearly four months of being in the program they still had not prepared a court case as they said they were going to,” said Potts, who signed her deed to Fidelity in mid-April and got it back July 20, according to official records.
A Boca Raton man, who didn’t want to be identified because he owns a business in the area, said he was one of Fidelity’s first clients. He signed his deed into a group called Hunting Partnership in October last year, which deeded it to Fidelity Land Trust in January. The homeowner got it back in April after he said his case went nowhere and he “hounded” the company for the deed’s return. In the end, he said he lost $1,000 but “took it as a learning experience.”
Still, there may be more at stake than just the deed. Royal Palm Beach-based foreclosure defense attorney Tom Ice said one of his clients signed his deed to the trust as well as a promissory note to pay $176,500 for a new mortgage.
“It’s kind of messy,” Ice said, echoing Wiener’s statements.
Because the homeowner is still a beneficiary of the trust, the property can’t be sold and probably isn’t considered a frozen asset of the trust, Ice said.
Boynton Beach homeowner Marcie Lowe signed her deed over to Fidelity in April and has paperwork reflecting a proposed new $269,600 mortgage. She said she paid $2,600 up front, but didn’t realize there would be a monthly mortgage payment due to Fidelity.
Then she got a call saying she was late on her monthly payments, she said.
“They had all this paperwork we signed and I suspected something was going on but wasn’t really sure,” Lowe said. “I don’t need my $2,600 back. I just want their name off the deed.” — end of article
If you remember — Get Out Of Debt Guy (The Honorable Blogger Steve Rhode) and me both did stories on this company a few months ago.. Well I guess I should say Steve was really the first and the main source on this story. This is because I really got all my information from his page.
Related articles below:
- Get Out Of Debt Guy Blog Gives Warning About Fidelity Land Trust Company Based In Florida. Steve Rhode Said – “The Owners Are A Mystery. Who Really Are They?
- What Might Have Some Of The Mortgag Brokers Done Once The Housing Market Crashed
- Judges lash out at land trusts, call attempts to cancel mortgages meritless
- Plantation homeowners sue to reclaim million-dollar property they signed away to Boca Raton land trust
- Update on 03/26/13 on Case Filed by Florida Against Fidelity Land Trust, Ed Cherry, Larry Diodato and Others
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