Continued rise in foreclosure rates now a federal case By JANE MCHUGH Staff Writer
The rising home foreclosure rate is becoming a federal case.
U.S. District Court in Greenbelt has announced that it will prosecute two mortgage fraud companies that victimized people in Bowie and Prince George's County. The companies advertised on radio and TV, promising to save troubled homeowners from foreclosure. Instead, the customers lost the equity in their homes.
This month, grand juries have indicted four people who allegedly defrauded homeowners and mortgage lenders through a company called MKL Associates. MKL sold a remedy it marketed as the "MKL financial diet" to people falling behind on their mortgage payments. Separately, eight other people were indicted in another scheme involving the Lanham-based Metropolitan Money Store.
The Money Store is known to have allegedly ripped off people in the Bowie area. Some are in court trying to stop foreclosures, said Stephen Ball, a Bowie lawyer who is representing two families allegedly scammed by the Money Store, which operated all over the Washington area.
"Our argument in court is that they are foreclosing on a fraudulent deed, and people who have been defrauded should not be foreclosed upon," he said. "This hasn't resulted in dismissal of the cases but it's put the homes in a holding pattern that's been very stressful" to the homeowners, he said.
The Money Store's alleged victims were directed to allow their property titles to be put in the names of third parties - "straw buyers" - for a year's period. During that time, the Money Store said it would get the homeowners more favorable mortgages and improve their credit ratings. Title would then be turned back over to them.
But nothing of the sort happened, investigators said. Instead, according to the indictment, the Money Store fraudulently bolstered the straw buyers' credit so they could qualify for better mortgages, took out inflated loans on the properties and kept the proceeds - spending it on art, cars, fur coats, international trips, gambling, jewelry, limousine services, student tuition and a luxury wedding for company president Joy Jackson and her husband, Kurt Fordam, both Fort Washington residents.
The Washington Post has reported on the spectacular June 2006 wedding reception. Held at the Mayflower Hotel ballroom in downtown Washington, it featured singer Patti LaBelle, four wedding cakes, lobster and Cristal champagne. Jackson, a former exotic dancer, wore a dress with a 42-foot train "adorned with bling."
But the couple and their co-defendants may end up paying for the wedding the hard way. The prison time mentioned in a news release accompanying the 25-count indictment adds up to around 500 years, give or take 20 to 50 years, for each defendant.
More than 100 homes were involved in the Money Store's alleged con game but only 11, mostly in Prince George's County, were listed in the June 12 indictment of the people who ran the shop. One was a house on Begonia Lane in Glenn Dale. Class-action civil lawsuits also have been filed against the Money Store and its compatriots.
Stan Brown, a lawyer whose office is right next to the Money Store's old building in Lanham, said he represents 33 ripped-off homeowners in a civil suit filed in April 2007 in County Circuit Court in Upper Marlboro. His was the first action ever taken against the Money Store. Since then, three other civil suits have been filed against the outfit, two in federal court in Greenbelt and one in the District of Columbia.
"This is one of the biggest real estate frauds in the history of the county," Brown said. The Money Store lured in customers by saturating radio and TV with ads aimed at the Washington-area's urban market, he said.
"A lot of people have already lost their homes. Numerous people have been evicted, they've lost everything," Brown said. "It's a shame."
Meanwhile, Congress is expected to pass a massive foreclosure rescue bill that would let the Federal Housing Administration back $300 billion in new, cheaper home loans, according to the Associated Press. Afterward, the House and Senate will conference and a final bill is expected in July, said Stephanie Lundberg, spokeswoman for Rep. Steny Hoyer, D-Prince George's.
