Feds break up mortgage-rescue firm
Posted on Thursday, June 12, 2008 6:08 PM ET
By EJ Johnson, NBC News Investigative Unit
Federal prosecutors on Thursday charged eight people in a fraud scheme that allegedly involved over $35 million worth of fraudulent loans and mortgages in the Washington, D.C., area. Federal officials arrested former exotic dancer Joy Jackson, who had set up a Maryland-based mortgage-rescue firm called the Metropolitan Money Store, and indicted her on charges including mail fraud and money laundering.
The Metropolitan Money Store was the subject of an NBC News investigation in December.
Jackson had promised help to hundreds of homeowners whose homes were in danger of foreclosure, but instead prosecutors say she ran a sophisticated scheme that bilked families out of millions of dollars.
Investigators told NBC News that Jackson's company persuaded desperate homeowners, behind on their mortgages, to sign over the deeds to their homes to a third party, or straw buyer. The come-on was that they could stay in their homes and buy them back after a year. But investigators say what actually happened was that the company borrowed more money against the home, stripping out almost all the equity, and making it impossibly expensive for homeowners to buy their houses back.
"Homeowners who fall behind on their mortgage payments should be wary of con artists who claim that there is an easy way to avoid foreclosure," said U.S. Attorney Rod J. Rosenstein at a press conference announcing the indictments. “Just as get-rich-quick schemes are usually fraudulent, get-out-of-debt-quick schemes are usually phony, too. The indictment alleges that the defendants used a ‘foreclosure-prevention’ scheme to cheat homeowners out of the remaining equity in their houses by transferring their homes to straw buyers. The defendants then defrauded lenders by inducing them to make new loans based on inflated appraisals and fraudulent credit applications.”
Jackson and her husband, Kurt Fordham, were arrested Thursday morning in Raleigh. Jackson and the other defendants face a maximum sentence of 30 years in prison and a $1 million fine.
