When Idriis Bilaal, 77, got a foreclosure notice about a year ago, all he could think about was how he could save the home where he had been born, a run-down red-brick rowhouse in Northeast Washington.
After a series of sleepless nights and failed attempts to find money, Bilaal accepted an offer from one of a host of "foreclosure rescue specialists" who had called or left fliers and business cards as soon as the notice of foreclosure was published.
Idriis Bilaal points to pictures of his family in the 100-year-old house in Northeast Washington where he was born. He has filed suit claiming he and two other D.C. homeowners were duped into selling their homes.
(Len Spoden For The Washington Post)
Forearmed Before Foreclosure|
AARP lawyer James T. Sugarman says "there are dozens of ways to save your house from foreclosure" but that those in desperate times too frequently jump at bad deals.
His rule of thumb is, "Never do business with anyone who comes to your door or calls you out of the blue or sends you a flier. It's so bad out there that you can't afford to trust a stranger."
If you're facing foreclosure:
Look into renegotiating the loan with the lender or working out a repayment plan.
If you can afford it, get a lawyer from the local bar association referral program or a lawyer recommended by a trusted friend to help fight the foreclosure. If you have a low income, contact the local legal services network.
Contact a government-approved housing counselor. Counselors are listed by state at www.hud.gov, the Web site for the Department of Housing and Urban Development.
File a Chapter 13 bankruptcy to reorganize your debts. That will stop a foreclosure. But you must keep up the mortgage payments during reorganization. Be sure you get a reputable bankruptcy lawyer. (Some con artists offer to file bankruptcy petitions for a homeowner but never file the appropriate follow-up paperwork.)
If you suspect the lender won't agree to cooperate or has included abusive terms, contact the local licensing regulator, consumer protection agency or federal banking regulators.
If you think you have been scammed:
Any D.C. resident who is over 60, living on a low income and suspects a rescue scam can contact AARP's Legal Counsel for the Elderly at 202-434-2120.
Contact HUD's National Servicing Center at 888-297-8685. The center refers callers alleging scams to local authorities and HUD-approved agencies, as well as the Better Business Bureau.
Seek a temporary restraining order in your state (or D.C.) court.
Before the foreclosure notice comes:
Elderly homeowners on fixed incomes can apply for reverse mortgages, the kind for which you draw money against the equity in your house for as long as you live rather than having to pay a mortgage. Such loans are fairly complicated, but certified housing counselors are very familiar with them. AARP's Web site offers information at www.aarp.org/revmort, and the Federal Trade Commission has advice at www.ftc.gov/bcp/conline/pubs/homes/rms.htm.
If you go through all the steps and you hear repeatedly that the best thing to do is to sell the house to a legitimate buyer, don't resist.
-- Sandra Fleishman
He signed some papers provided by an ex-con and retired minister named Calvin N. Baltimore -- without wearing his reading glasses, he says.
Soon after, to his horror, Bilaal says, he realized this wasn't a loan -- he had in fact signed away the title to his 100-year-old house to Washington businessman Vincent L. Abell, who was convicted years ago for his role in a huge real estate fraud in the 1980s.
The house recently was appraised for $255,000, but Bilaal received less than $20,000, according to his lawyers -- the $7,000 that he had fallen behind on his mortgage, plus $10,000 cash. But Abell's company did not agree to pay off or assume Bilaal's mortgage, so Bilaal remains responsible for those $714-a-month payments. On top of that, he began making rent payments of $500 a month to Abell's company.
Consumer advocates say they have seen a mushrooming number of similar situations around the country, in which house-rich but cash-poor homeowners desperate to stave off foreclosure end up losing ownership to those who promise to save them.
"You can sort of tell [what's happening] by all the signs posted on street corners and telephone poles," said Doyle Niemann, assistant state's attorney in Prince George's County, where three cases of possible rescue scams are under investigation. Such signs usually trumpet "stop foreclosure" or "save your house."
The fraud, he said, is "they're not making loans, they're expropriating houses at a discounted price and pocketing the difference."
Bilaal still is not sleeping well, but he remains in the house, despite a recent eviction lawsuit filed by Abell's company, Modern Management Inc. of Northwest Washington. In September, Bilaal filed suit in D.C. Superior Court against Abell, Baltimore and five others for allegedly having "tricked" him and two other D.C. homeowners out of their deeds. The three plaintiffs are represented by lawyers from the Washington office of AARP's Legal Counsel for the Elderly, the AARP Foundation Litigation and Hogan & Hartson.
"I would never have considered selling my house," Bilaal said recently. The veteran of World War II, Korea and Vietnam, who retired with post-traumatic stress syndrome in 1967, said he has always wanted to leave his house to his children. "I wouldn't want to live anywhere else. . . . I came along during the Depression, and the few of us whose families were able to get property want to keep it," he said.