Foreclosure-Gate a Reprieve for WWII Vet

In 2003, Tom (not his real name to protect his privacy) was a retired civil service employee and World War II veteran with money in the bank and a retirement income of $2,000. He also had nearly $80,000 in savings. Today at age 84, thanks to the unscrupulous dealings of a person who represented himself as a real estate broker and financial adviser, he's almost destitute and his house is at risk of foreclosure. The "adviser' encouraged him take the equity out of his home and buy investment property.

Before meeting this man, Tom had only $50,000 more to pay on the mortgage of a home he'd owned for 20 years in South Florida. Tom now owes $400,000 in mortgages, has lost all the investment property and "lives in limbo," he says, waiting for the bank to bring up a new foreclosure action on his home.

The only thing that saved Tom from being out on the street in August was representation by Ice Legal, who got the plaintiff to withdraw the foreclosure case from court because of faulty paperwork.
Ice Legal has been at the forefront of exposing "robo-signers," employees of banks who sign thousands of documents each month without verifying information. Tom's living situation is probably only temporary, though. Dustin Zacks of Ice Legal told that the bank could refile the case against Tom at any time in the next two years.

Tom's adviser first made contact with him after Tom bought a condo with cash for a relative to rent. Since it was just $40,000, he couldn't get a mortgage on the property. The financial adviser said that he could get Tom a mortgage and used that application to research Tom's financial situation. He used that information to see if Tom would be a good mark for a real estate scam.

Tom said that the adviser "painted a glamorous, profitable real estate market and that, with his help, I could easily purchase and re-sell properties at a profit. He then goaded me to take advantage of the situation to increase my net worth."

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encouraged Tom to tap the equity in his home and use the cash to buy investment properties. Tom said that when he saw Tom's financial situation it was like "dangling a banana in front of a monkey." He thinks he baited the financial adviser, but not intentionally.

Now that the financial adviser had a willing victim, he encouraged Tom to buy two additional properties, tapping the equity in his home for down-payment cash. When the adviser was finished with his mark, Tom had four mortgages to pay out of an income of just $2,000. The market crashed and Tom had trouble renting the properties.

Then the banks made it even harder. Tom says that in one rental he had a good, paying tenant, but the bank had its attorney send letters about the pending legal action and he lost the tenant. In another, Tom continued to maintain the rental property even without a tenant, but the bank changed the locks, saying he had abandoned the property. He couldn't even try to rent it to pay the mortgage.

When applying for all these loans, his financial adviser would present a partly filled-out application without any financial information. Tom signed the applications even though some information was blank. To this day, Tom doesn't know what the financial adviser put on his applications. He has since found out that the scam artist is not a real estate broker and he doesn't know if he is a certified financial adviser.

The only reason Tom still has a home to live in is the foreclosure scandal. Since Tom owes so much on his property, he knows it's not likely he'll be able to keep the home, but he's glad to have the extra time before foreclosure.

All of Tom's savings are gone. His credit cards are maxed out. He does continue to pay his homeowner's fees but stopped trying to pay his mortgages. He's stopped taking medications that he can't afford. He's just waiting for the next axe to fall. He expects to end up renting a trailer when the bank finally forecloses.

Lita Epstein has written more than 25 books including "The Complete Idiot's Guide to Personal Bankruptcy."

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