Foreclosure rescue offers exposed

VIRGINIA BEACH, Va (WAVY) - When the threat of foreclosure hits, homeowners will do almost anything to keep it from happening. That's where foreclosure rescue offers come in and many of them claim to make the homeowners best interests the priority. But too often, things don't work out that way.

The Brown family of Virginia Beach lived in their home for 13 years until a job loss caused them to fall behind on their mortgage payments.

They say the real trouble started after they responded to a newspaper advertisement that said, "In foreclosure? We can buy and rent back to you fast."

"We trusted, we were really desperate and we didn't have to move," said Pam Brown.

The Brown's say they went for it, with the understanding they would have the option to buy the house back. Within a matter of weeks, settlement papers that laid out the terms of the sale and rental agreement were in their hands, and Eric Brown signed the deed over to a new owner.

Brown says everything seemed fine until a mortgage statement came in the mail.

"It had me and my husband's name on the mortgage coupon like it always had, that's when we knew we did something wrong," Brown told Wavy.com.

That something was line 503 of the settlement statement that read "existing loan taken subject to" in the amount of $90,000.

"That's where he tricked or confused him at," said Brown.

Wavy.com wanted to know what the term "loan taken subject to" meant and this is what we found out: Taking a property 'subject to' existing mortgage means you get the deed, but you do not assume the loan. The loan stays in the homeowner's name, but you now control the property and make the mortgage payments on it. The Brown's claim that's something they didn't understand at closing, but per the agreement they continued to pay rent, which the new owner used to pay their mortgage.

"We made a mistake. We should've had a lawyer," Brown said.

Wavy.com caught up with John Scott Meredith, the man the Brown's say is responsible and he told us the a very different story.

"Their mortgage wasn't supposed to be paid off. They signed a HUD 1 mortgage settlement saying the loan was being taken over," said Meredith.

According to those documents attained by Wavy.com, the loan was taken over by a company named Kery Corporation, so we asked Meredith what his relationship was to Kery Corporation.

"I really don't have a relationship with Kery Corporation, I was acting as an agent at the time," said Meredith.

But according to the deed and a public records search, the address for Kery Corporation and Meredith's home address match, but nowhere did Meredith's name appear in closing documents.

A possible reason why came from court documents. Court records show that in 1991, Meredith pleaded guilty to bank and mail fraud and a Norfolk federal judge sentenced him to forty-six months in prison for his part in a real estate scheme.

"There have not been any real estate dealings since then that have been challenging," said Meredith.

Wavy.com couldn't find any formal legal issues with the Brown's deal either, but there seems to be more here, so we took our information to Virginia Beach attorney Tanya Bullock.

"You also have to consider the stress and the state of mind that people are in. The person does not explain to them the legal significance of a deed and what's happening and they're also telling them they can stay in the house," said Bullock.

Pam admits they fell behind on their rent payments, and that's when the Browns say foreclosure notices started showing up again. Remember, these are foreclosure notices, on a house they don't even own!

"At that point they were three months past due on their rent, which was used for mortgage payments," Meredith told Wavy.com

And what about the option for the Browns to buy their house back, we asked Meredith what happened to that part of the deal.

"They did not have an option to buy the house back, they never ever had an option to buy the house back ever," Meredith said.

But the Browns had given Wavy.com a note written to them, by Meredith. The note asked the Brown's if they had any interest in buying the house back.

"Do you have it? Can I see it? Oh, yeah that's right they did have the option to buy it back," replied Meredith.

But that was a revelation, too little too late for the Brown's. Two days before Wavy.com confronted him at the Virginia Beach courthouse, Meredith paid off their mortgage. But by that time, the Browns had moved out, forfeited every penny of equity 13 years of ownership earned, and started over from scratch.

http://foreclosureuniversity.org/