The defendants, in interviews or through their lawyers, deny the allegations, contending that they did save the houses because they stopped the foreclosure auctions and the homeowners got to stay as renters.
"I didn't make any false representations to any of these people," Abell said. "These people were in foreclosure and I bought the houses from them, and that's why they're still in their own homes today. Otherwise their houses would have been sold at foreclosure. . . . These people didn't have the money to stop the foreclosure."
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)
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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.
And finally:
• 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
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The homeowners "understood what they were signing," Abell said. "I know that it was explained to them. What I've seen in the files are sales contracts and lease agreements that people have entered into, and then they've paid rent. That's what I've seen. . . . Why would they pay me rent for months if they didn't understand?"
Baltimore called the allegations "totally incorrect." He said, "Of course they understood what they were signing. . . . Mr. Bilaal, the very first meeting, he had his attorney there -- at the Burger King, at Third and Florida Avenue NW. We met for almost an hour. His attorney asked me a whole bunch of questions. Then Mr. Bilaal called me the next day and agreed. . . . His attorney drilled me like crazy. . . . How can somebody say that's fraud?"
AARP's Sugarman said that Bilaal didn't have a lawyer with him. "He says he brought along a friend, not a lawyer," Sugarman said.
Both Abell and Baltimore have criminal records for mortgage fraud. Abell, then a real estate agent in Silver Spring, pleaded guilty in the late 1980s to making a false statement and "causing an act to be done" following a criminal investigation into an operation described in 1990 by The Post as "the largest real estate fraud of its kind in Washington's history." It involved a decade of Federal Housing Administration loan-insurance fraud. Abell was sentenced to two years in prison, with all but six months suspended and two years' probation, was ordered to pay $20,000 in restitution and was fined $5,000.
Baltimore pleaded guilty in U.S. District Court in the District in 1990 to one count of conspiracy for serving as a "bird dog," or loan broker, who solicited individuals to borrow money from two lenders at interest rates from 38 percent to 50 percent.
Baltimore was sentenced to five years, suspended with five years' probation, and was ordered to make restitution of $8,000. After a subsequent arrest and conviction in 1994 for transporting stolen goods, he was sentenced to 25 months in federal prison and later ordered to serve the earlier sentence of five years for violating probation. He was released in 2001.
Baltimore said in an interview that he would not discuss his past.
Abell said that he has a track record of "buying and renovating houses for 20 years or more." He moves to evict, he said, only "if people haven't paid their rent."
He repeated that he was helping people who had few choices on the eve of foreclosure. "Every one of these people would not be still in their houses today" if they had not taken up his offer, he said. "They would be evicted and uprooted. I didn't put these people in their financial position."
Bilaal says it was the shadow of eviction that scared him into signing the papers. "I was under duress when Baltimore walked through my gate and said he could save my house," he said. "Every time I saw people's stuff on the street, I would say that that was me next."
