Sounds more like a classic tale of not reading a contract before you sign it.
--- On Mon, 10/13/08, Jennifer <[EMAIL PROTECTED]> wrote:
From: Jennifer <[EMAIL PROTECTED]>
Subject: [AsburyPark] APP - Eviction looming, man sues over deal
To: AsburyPark@yahoogroups.com
Date: Monday, October 13, 2008, 7:32 PM
Here it is ~ A classic tale of scamming a homeowner in foreclosure
October 12, 2008
Eviction looming, man sues over deal
He, others say they feel cheated
By ALESHA WILLIAMS BOYD
STAFF WRITER
Michael Moreno had a decision to make fast. There were only hours
to go before his home was to be sold at a sheriff's auction.
The 47-year-old Little Egg Harbor resident could lose the house a
three-bedroom, two-story Colonial that he had built in 2002 and
face homelessness with his wife and four children.
Or, he could sign a contract without retaining a lawyer to sell
the home to buyer Robert Heath Jr. Heath's Marlboro-based company,
MGT Group, would offer to sell the home back to Moreno at a later
date.
The choice seemed simple, then.
But now, Moreno says he was stripped of nearly $70,000 in equity in
the February 2006 deal, and he faces eviction from the house he
thought he saved. He also is one of two former homeowners suing Heath
and related companies in an attempt to undo deals they claim are
fraudulent.
Their attorney, Kevin Carlin of Hamilton, said the documents on the
deals list transactions that never happened, a violation of federal
law.
Carlin also said there are more than 40 similar real estate
transactions involving Heath in the state. In the lawsuit, Carlin
argues "the pattern" of activity should qualify as racketeering.
Heath's attorney, Joseph F. Ottino Jr. of Brick, said the agreements
were simply legal private con-tracts between two parties. Moreno was
being evicted, Ottino said, because he is not paying rent to live in
the house, as Heath had agreed.
Heath may have made money on the deals, but there's nothing wrong
with that, Ottino said.
"That's the nature of the business," Ottino said. "You put out money,
a capital investment, and you get a return based upon the risk."
Ottino declined to discuss Carlin's charge about false statements on
the documents. Heath did not return calls for comment.
Moreno said in an interview that he was taken advantage of in a
moment of extreme weakness.
Moreno said his auto-repair business had run into financial trouble
after a new landlord informed him he would have to move his shop; the
landlord had other plans for the property. Moreno said he lost about
$60,000 before he was able to relocate. Moreno said Heath had called
him when his home was listed for foreclosure sale. Moreno said he and
Heath agreed Heath would pay off Moreno's $261,000 mortgage. Moreno
would prepay Heath $25,000 in rent to remain in the house for a year.
Moreno agreed he would be able to buy the home back after that year
for $297,000 the amount of the mortgage Heath would take out on the
home with Countrywide Financial.
On the day of the sheriff's sale, Moreno rushed to Heath's two-story
office in Marlboro. There he found Heath, an attorney whom Heath
explained had an office in the building, and another Heath employee
who had appraised the home, Moreno said.
But the numbers had changed, Moreno says, and Heath wanted more.
"All of a sudden, I would have to buy the house back for $321,000,"
said Moreno, who says he didn't know then he should have had a lawyer
to represent him. "I left. I was mad. It wasn't the same deal."
Within seconds, Heath called Moreno's cell phone and asked him to
return, Moreno said.
"He's saying, "Come back, Michael. This is going to work for you. You
don't want to lose your home, do you?' " said Moreno, who turned back
to finish the deal. "(Heath's attorney) was like, "sign here,' "sign
here.' I was only thinking about saving my house."
Moreno made it to the county Sheriff's Office in Toms River with less
than an hour to spare before the sale. Moreno said he did not know he
had a right to postpone the sale.
But now after a year of struggling with Heath over the deal gone
wrong, Moreno says, "I had a letter on the door saying, "You gotta
get out.' "
No rent being paid
The prepaid rent ran out around February 2007, and Moreno said he has
not paid the roughly $2,000-a-month rent since. Nor has he paid
taxes, as he agreed in the contract.
In the lawsuit, Moreno said he was bilked out of at least $69,000 in
the deal the difference between his original $261,000 mortgage and
the price of $330,000 Heath claimed on a deed that he paid for the
home.
And Moreno would later learn the attorney he says rushed him through
the signing, Meryl Polcari, is now Heath's wife. Moreno said Heath
never disclosed their personal relationship. Polcari couldn't be
reached for comment.
"I thought he was helping me out; what he did was took me for a
sucker," said Moreno, who filed his lawsuit in Superior Court in Toms
River in September. When Moreno re-established his business, he said
he returned to Heath to repurchase the home. But when he tried to get
a loan through the businessman, as discussed, Moreno said he was
rebuffed.
"My whole life turned around with this guy and what he's done to me,"
Moreno said. "My wife and I were on the verge of divorce, fighting
every day. All the stuff he did to me just hit me at one time. I was
so down to the point I didn't even want to live anymore."
Heath's attorney, Ottino, told a different story. Ottino said
Moreno's credit just wasn't up to snuff and therefore he was unable
to get a new loan.
Moreno simply hasn't held up his end of the bargain, Ottino added.
"Moreno wasn't able or willing to pay the rent for a year to a year
and a half," Ottino said. "He's been living there without paying
rent, so naturally my guy fell into foreclosure. I think my client
would say this didn't go as planned." Carlin, Moreno's attorney,
disagrees. He said Heath already has made his money.
"At the closing, what happens for Heath, he pockets $36,000 the
difference between the old and new mortgages," Carlin said. Further,
documents required by the U.S. Department of Housing and Urban
Development lists about $10,400 in cash to be paid Moreno, and
$33,000 purportedly already paid to Moreno. Carlin said his client
never saw any of that money, but it should have been paid.
Deborah and Lawrence Mayo of Brick also have joined the lawsuit
against Heath, and they also claim there was a fraudulent transaction.
Carlin said at least three other families have contacted him about
allegedly bad deals with Heath's businesses. Two of those families
already were evicted from their homes, Carlin said.
High monthly payment
The Mayos said in their lawsuit that Heath paid off their roughly
$222,500 mortgage, and took out a mortgage of about $281,000
$60,000 more than needed.
Heath didn't require a rent prepayment from the Mayos. Instead, he
asked for monthly payments of $2,175, which Heath later bumped up to
$2,650, Lawrence Mayo said.
Mayo, 57, who suffers from paralysis on his right side due to a
childhood head injury, said he depends on a monthly Social Security
stipend of about $1,100 for the couple's needs. He said his wife, 51,
works part time at Burger King, and earns about $1,000 a month.
"(Heath's required rent) was almost double what we were paying in
mortgage," Heath said. "How can we afford to pay rent like that when
we were unable to pay the mortgage? We were out to find some help,
and we ran into someone who tried to give us the shaft.' "
Mayo said he paid two months of rent after the November 2006
agreement, "then we just couldn't pay it."
Ottino declined to comment about the Mayo case.
Mayo and his wife had been allowing prospective buyers to come in and
look at the home after Heath announced his plans to sell it. With the
lawsuit pending, Mayo said Heath has stopped sending interested
buyers.
Carlin's clients bear some responsibility for their predicaments.
They could have made better decisions, such as consulting a lawyer,
Carlin said. But without the funds to pay for legal counsel, they
didn't know their options, he says.
Nonetheless, the transactions were designed to strip equity, Carlin
said.
"On paper it looks like a typical real estate transaction with a
purchase and a sale, but when you look behind the paper which is
what courts of equity will do what you see is that the transaction
was actually the granting of an equitable mortgage; they were really
just refinancing the property," Carlin said. "And they accomplished
it by using an attorney who gave the appearance of a disinterested
party while she was the wife of the principal."
Eviction delayed
Carlin and Ottino have agreed to stay the landlord eviction
proceedings until the Superior Court case, which will also involve
the foreclosure proceedings with the involved banks, is resolved.
Both families are due back in Superior Court on Oct. 24 before Judge
Frank Buczynski.
Moreno said he has not made a payment to Heath or on property taxes
since the $25,000 prepayment because he's waiting for the matter to
be resolved.
He had borrowed $25,000 from an acquaintance, at 16 percent interest,
to prepay the rent. Moreno said he is in arrears on that loan as well.
"I was born in the Bronx, raised in Newark," Moreno said. "For me to
get out of that atmosphere, move down here, get married, open a
business and establish my own credit I felt proud. I was proud that
I owned my own house."
Now, if he loses, "we don't have any place to go," Moreno said. "I
just hope I win the house back and get my money back that he took
from me."
[Non-text portions of this message have been removed]
------------------------------------
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/AsburyPark/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/AsburyPark/join
(Yahoo! ID required)
<*> To change settings via email:
mailto:[EMAIL PROTECTED]
mailto:[EMAIL PROTECTED]
<*> To unsubscribe from this group, send an email to:
[EMAIL PROTECTED]
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
