Mortgage Companies Sued in Pr. George's
Thursday, July 12, 2007
Two months behind on her mortgage and struggling to come up with a third payment, Angele Reid knew she was headed for trouble.
She heard a radio ad about a foreclosure-recovery program offered by a local company, and she thought it was the way to keep her Oxon Hill home.
But that turned out to be far from the end of her worries.
Now Reid is part of a class-action civil lawsuit filed recently on behalf of hundreds of homeowners who say they lost millions of dollars in equity through an elaborate scheme operated by several Prince George's County businesses.
Attorneys for the plaintiffs said Metropolitan Money Store Corp. of Lanham, the main defendant, is behind a scheme that defrauded as many as 400 people in Maryland, Virginia and the District. Two couples from Prince George's filed the action in Circuit Court last month. They are seeking unspecified damages in the case, which is under state investigation.
According to the lawsuit, here is how the alleged scheme worked: Metropolitan arranged for the sale of the home to an investor known as a "straw buyer" who would borrow as much as possible against its value and then pocket the money.
Metropolitan told the plaintiffs that they could stay in their homes for a year and would be able to buy them back, according to the suit. But the defendants increased the mortgages so much that most or all of the equity was gone and the plaintiffs were unable to repurchase their properties, the lawsuit said.
"The sole motive seemed to be to enrich their lavish lifestyles as opposed to saving the homes of the vulnerable homeowners from foreclosure," said Phillip Robinson, a lawyer and executive director of Civil Justice Inc., a Baltimore nonprofit group that helped prepare the lawsuit with Legg Law Firm LLC of Frederick and the Holland Law Firm of Annapolis.
The phones at Metropolitan and defendant companies Fordham and Fordham Investment Group in Lanham have been disconnected. No one answered the phones at RTE Title and Escrow LLC in Largo or at Sussex Title LLC in Rockville, also listed as defendants.
Stan Brown, an attorney for about 20 Prince George's plaintiffs, obtained an injunction last month to stop his clients' homes from going into foreclosure.
"Metropolitan targeted people who had at least $100,000 equity in their homes," Robinson said.
As home buyers have become unable to make their mortgage payments because they received loans they could not afford or the interest rates on their adjustable-rate mortgages have risen, they have become easy prey for scam artists, consumer advocates say.