(Washington, DC) – District of Columbia Attorney General Linda Singer has filed a lawsuit against Metropolitan Money Store Corp., a Lanham, Maryland-based company that advertised an alleged “rescue” plan to homeowners facing mortgage foreclosure but instead allegedly stripped more than $2 million in home equity from at least 27 District homeowners by having them sign over the deeds to their homes and with those deeds the equity they often worked years to earn.
The civil complaint, filed late yesterday in DC Superior Court, also names Fordham and Fordham Investment Group, mortgage broker Cornerstone First Financial, title companies Sussex Title and RTE Title & Escrow and lender New Century Mortgage Company. The complaint alleges that all of the entities engaged in an unlawful, complex scheme to strip millions of dollars of equity from homeowners to the benefit of the defendants. In addition to the District victims, many more victims are believed to be in Maryland and Virginia.
The suit seeks to restore to homeowners more than $2 million in lost equity and to prevent them from losing their homes as a result of unlawful conduct. The complaint also seeks civil penalties.
“This alleged scheme combined greed on one side with the very strong and understandable desire of people to keep their homes on the other side. It was an explosive equation and a very profitable one for the owners of Metropolitan and all of the other bad players involved,” Attorney General Singer said. “Many factors made this homeowners’ nightmare possible, but among them were the subprime loans that were given out like candy to straw buyers who had little documentation and the companies that ignored red flags in favor of easy profits.”
The complaint alleges that Metropolitan advertised, in media targeted to African Americans in the DC metropolitan area, that it would help consumers with cash flow and credit problems. Metropolitan generally targeted people facing foreclosure who had $100,000 in equity in their homes with promises that it would help them save their homes through its “Mortgage Rescue Program.” As part of that program, Fordham, a related business entity, would supposedly help those consumers with their credit problems. Kurt Fordham, the president and director of Fordham, is married to Joy Jackson, the director of Metropolitan.
The lawsuit alleges that the “Mortgage Rescue Program” was in fact a scam designed to strip equity from homeowners to benefit the defendants. Here’s how it worked: Metropolitan lured homeowners facing foreclosures into signing documents purporting to transfer title to their homes to straw “investors” or “buyers.” Metropolitan arranged for new mortgages in the names of the straw investors in much higher amounts than the original mortgages. From the proceeds of the new mortgages, the defendants would then skim $80,000 or more from the equity that homeowners had built up in their homes. Metropolitan told the homeowners that they could continue to live in their homes for one year while Metropolitan paid the mortgage payments, after which time the homeowners’ credit ratings would be improved and the homeowners could put their names back on the title and obtain new mortgages. Instead, in most cases, Metropolitan paid the new mortgages for only a couple of months, and the defendants pocketed the balance of the mortgage proceeds. Most of the homeowners currently are facing foreclosure or will be shortly.
The lawsuit seeks a permanent injunction from the Court to stop the defendants’ misleading practices, rescission of the transactions and loans resulting from the defendants’ unlawful practices, restitution for consumers, civil penalties, costs and fees. For more information, please call the Attorney General’s Consumer Protection Hotline at 202.442.9828 or file a complaint online at: www.oag.dc.gov.
Please select below to view the Metropolitan Money Store compliant:
To help avoid foreclosure rescue scams, avoid:
Offers to buy your house and rent it back to you.
Offers to negotiate a workout with your lender, but one in which you have to pay a large fee.
Any deals or supposed refinances in which you have to sign the deed of your home over to someone else.
If consumers are facing foreclosure:
- Contact your lender and ask for a repayment plan or loan modification.
- Refinance your home, possibly through a different lender.
- Reach out to receive counseling through a non-profit or other counselor that can assist you in making good decisions.