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AG REILLY OBTAINS TEMPORARY RESTRAINING ORDERS AGAINST INDIVIDUALS, BUSINESSES INVOLVED IN MORTGAGE FRAUD AND FORECLOSURE RESCUE SCHEMES
Attorney General Tom Reilly has obtained three emergency orders to stop unfair and deceptive practices by individuals and businesses allegedly involved with mortgage fraud and foreclosure rescue schemes targeted at home owners.
Massachusetts Attorney General
AG REILLY OBTAINS TEMPORARY RESTRAINING ORDERS AGAINST INDIVIDUALS, BUSINESSES INVOLVED IN MORTGAGE FRAUD AND FORECLOSURE RESCUE SCHEMES
August 31, 2006
CONTACT: BETH STONE
(617) 727-2543
BOSTON -- Attorney General Tom Reilly has obtained three emergency orders to stop unfair and deceptive practices by individuals and businesses allegedly involved with mortgage fraud and foreclosure rescue schemes targeted at home owners.
As part of AG Reilly's continued effort to tackle predatory conduct in mortgage brokering and lending in the Commonwealth, temporary restraining orders were issued against five individuals and three businesses allegedly engaged in unfair and deceptive practices.
In each of the three lawsuits filed Wednesday, judges issued emergency orders to stop the illegal practices, and ordered the defendants not to evict any homeowners or sell any of their homes.
"Many of these consumers are now facing foreclosures," AG Reilly said. "This is not the American dream but a homeowner's nightmare. Foreclosure rates in Massachusetts are reaching all-time highs. I will not stand by and let these unscrupulous individuals profit off the backs of distressed homeowners."
ALEC G. SOHMER
In a complaint filed in Suffolk Superior Court, AG Reilly alleges that Brockton attorney Alec G. Sohmer, and his wife Jennifer, both of Pembroke, participated in a bogus foreclosure rescue scheme targeted at desperate homeowners. The complaint also names Timeless Funding Inc., a Nevada company the Sohmers allegedly used in their fraudulent activities.
According to AG Reilly's complaint, Sohmer has preyed on homeowners facing foreclosure since 2004 by promising them they could avoid foreclosure with refinancing through Timeless Funding. Instead, Sohmer allegedly deceived the homeowners into conveying their property to himself or to his wife. The complaint alleges that Sohmer concealed his fraud by deceiving the homeowners into signing documents purporting to allow them to stay in their homes by making monthly payments to Sohmer, and then to "repurchase" their homes from Sohmer by obtaining new financing. The complaint alleges that Sohmer knew that, because of the homeowners' financial distress and the onerous "repurchase" terms, the homeowners would never be able to afford the monthly payments, or obtain the required financing to get their homes back. After homeowners were unable to make the monthly payments, Sohmer sought to evict them from their homes, and to sell their homes to new buyers. AG Reilly alleges that, as a result of Sohmer's scheme, at least three homeowners have already lost, or face losing, their homes and their life savings. The Sohmers also allegedly took for themselves the equity that the homeowners had built up in their homes, as well as additional fees, commissions and other payments directly from the homeowners.
The complaint identifies homeowners in Centerville, Wareham, and Brockton who have been victimized by Sohmer's practices. According to AG Reilly's complaint, Sohmer misled consumers about the nature of the transactions, misrepresented and omitted crucial terms, pressured homeowners into signing documents without reading them, and then refused to give them copies of the signed documents. Sohmer also capitalized on his position as an attorney, and in one case victimized a homeowner who he was representing in bankruptcy.
AG Reilly has obtained an emergency order to prevent Sohmer from evicting homeowners or selling their property, and is also seeking restitution for homeowners harmed by Sohmer's conduct, civil penalties, and reimbursement of the costs of investigating and litigating this case.
WALTER RIBECK
In another case involving a bogus foreclosure rescue scheme, AG Reilly filed a complaint Wednesday in Middlesex Superior Court against Walter Ribeck of Newburyport.
According to AG Reilly's complaint, Ribeck targeted financially distressed homeowners facing foreclosure on their homes. Ribeck, holding himself out as a "loan specialist" with Powderhouse Mortgage Company, promised to arrange replacement financing to allow homeowners to keep their homes and any home equity they may have accumulated. Then, when foreclosure was imminent, Ribeck instead arranged for the homeowners to deed their homes to Ribeck, while purportedly maintaining a right to lease the residence and buy it back at a future date. This repurchase terms, however, were at inflated price that far exceeded the homeowners’ original mortgage debts. The ultimate result of these transactions, AG Reilly alleges, is that Ribeck evicted the homeowner so he could sell the home on the open market, for far more than he paid to acquire it.
In 1991, Ribeck, then a real estate broker, was convicted of bank fraud and making false statements to a federally insured bank and was incarcerated for two years. Ribeck was employed by Powderhouse Mortgage Company from 2000 to 2006, although the foreclosure rescue transactions he arranged did not involve Powderhouse.
AG Reilly has obtained an emergency order to prevent Ribeck from evicting homeowners or selling their property, and is also seeking restitution for homeowners harmed by Ribeck’s conduct, civil penalties, and reimbursement of the costs of investigating and litigating this case.
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