A Home Mortgage Mess

Eyewitness News Exclusive
February 4, 2009 6:14:03 PM PST
With millions of people nationwide caught in the mortgage fiasco in danger of losing their homes to foreclosure, it had to happen: Companies offering to rescue homeowners, instead, accused of robbing them of their homes and their hopes of a new start.It's an Eyewitness News Investigators exclusive.

It's easy to see why homeowners fall for the pitch: "We can help you save your home, raise your credit scores, just sign here."

The homeowners say they have no idea they're actually signing away their property and losing all the equity they've worked so hard to build up. Now, a criminal investigation is underway in two states.

"They should never be able to do this to anybody else," said Geraline Tabor.

Geraline Tabor's Paterson, New Jersey home is her pride and joy. The sanitation employee and single mom took out a loan to improve her property. Then, when her adjustable rate payments ballooned she sought help through a Brooklyn-based firm called Home Savers Consulting.

"They promised you a fresh start. I wanted a fresh start to be able to keep my home," she said.

A few miles away, Darlene and Jerome Jones say they got the same pitch from Home Savers.

Sarah Wallace: "You thought you were just refinancing your home, and in fact ..."
Darlene Jones: "We were scammed. That's the best word for it."

Both families say they thought they were temporarily transferring their property to a trustee Home Savers set up.

"He was to get it signed over into his name until they gave me enough time to get myself together and when my credit scores would rise higher and then everything was supposed to have been transferred back to me," Geraline said.

But that didn't happen because the Paterson family says they unknowingly sold their homes to buyers hired by Home Savers. The office here suddenly closed.

With new mortgages put in so-called straw buyers names, Home Savers allegedly cashed out the equity in these houses -- money that should have gone to the families. How do we know all this? We talked to the buyers.

John Weston: "We actually thought we were doing some good for people in addition to making a small amount of money."
Sarah Wallace: "How much did you make?"
John: "Ten grand a deal."

John Weston is a Bronx musician who claims Home Savers helped him qualify for a $410,000 mortgage on Geraline Tabor's house. He's says he's a victim, too.

Sarah: "This is the mortgage here. It's says you were making $11,000 dollars a month."
John: "No, I wasn't."
Sarah: "So this is completely fraudulent?"
John: "Yes."
Sarah: "Did you know?"
John: "I didn't. I didn't. I had no idea that this was a scam, that people were losing stuff until later."

Sarah Wallace: "Did you think you were buying this house?"
Alister Aird: "No."
Sarah: "What were you doing?"
Alister: "I was trying to help the owner."

Body shop worker Alister Aird says Home Savers enticed him to put his name on Darlene and Jermane Jones' deed and a few others for $8,000 a deal.

Sarah: "How do you look at Home Savers?"
Alister: "They're scam artists."

A settlement sheet says $67,000 was cashed out, and supposedly went to the Jones'.

"We never got $67,000 dollars. Never," Darlene said.

A law enforcement source says $42,000 from the sale ended up at an address in Brooklyn, where Home Savers partner Garth Celestine lives.

In the Tabor's case, the cashout was $85,000. According to court papers, more than $58,000 went to a corporation linked to Home Savers. Tabor says she got none of it.

"They are predators and they prey on people when they are frightened and vulnerable," said attorney Regina Gelzer.

Tabor's attorney is now suing Homesavers and others, alleging a widespread conspiracy of fraud.

Sarah Wallace: "You call this equity stripping."
Regina Gelzer: "Absolutely. They're reaching into the cookie jar that you've been putting your cookies in for years."

With Home Savers now under scrutiny, the partners are staying out of sight.

To stave off possible foreclosure, Geraline Tabor has now filed for bankruptcy.

"It's just a nightmare," Tabor said.

The Jones' are also considering bankruptcy.

"It's a shame, but we're not going to give up," Darlene said.

The attorney for Home Savers refused to do an interview or answer specific questions but claims the company helped many people stave off foreclosure before running into financial problems of its own.