TRENTON — Attorney General Anne Milgram filed mortgage fraud lawsuits against 36 defendants charging consumer fraud and civil racketeering by various mortgage brokers, real estate entities and others throughout New Jersey.
The unrelated complaints accuse defendants of inducing consumers to buy property on the basis of false promises and misrepresentations, and of taking out mortgage loans on the basis of grossly inflated property values. The defendants include mortgage brokers, real estate appraisers, title companies, straw buyers and sellers, and promoters. Filed in state Superior Court in Essex, Camden and Passaic Counties, the three complaints allege violations of both the New Jersey Consumer Fraud Act and the New Jersey Racketeer Influenced and Corrupt Organizations (RICO) Act involving 25 properties and more than $5 million in fraudulent loans.
The separate lawsuits name as defendant 15 corporations and 21 individuals. The lawsuits allege that all defendants engaged in a practice known as “inflated sale and crash,” in which investors are convinced to buy property at grossly inflated values through mortgage loans obtained using false information. The defendants broker these loans knowing the properties will end up in foreclosure. Some defendants are also accused of using an approach known as “bait and bump,” in which a mortgage solicitor offers a loan on false terms, then informs the defrauded consumer at closing that it is too late for them to get out of the transaction. Still others are accused of luring victims with bogus “rent-to-own” and “foreclosure rescue” deals.
In some cases, unwitting investors faced foreclosure and their credit ratings were ruined. The defaulted homes contributed to community blight and also threatened to devalue neighboring properties.
“The actions alleged in these lawsuits are unconscionable. The conduct involved ranges from acquiring properties through false mortgage applications to prevailing on a desperate homeowner to transfer the deed to her property to someone else on the false promise that she would be able to buy back her home,” said Attorney General Milgram. “It is imperative that we root out alleged mortgage fraud like this and protect the victims of these predatory lending practices.”
Filed on June 13, the state lawsuits include:
Milgram v. A&E Mortgage Company, L.L.C.: Filed in Essex County, the State’s four-count complaint alleges that the defendants engaged in an ongoing enterprise to induce buyers to purchase properties at grossly inflated values on the basis of false promises regarding the terms of loans, and to induce a homeowner facing foreclosure to transfer the deed to her home to a straw buyer on the basis of false promises, including that the homeowner would be able to buy back her home within a year. The homeowner was not able to buy back her home, which ultimately went into foreclosure. The homeowner, who currently resides in the house, has been served by the defendants with eviction papers.
In connection with each transaction, the defendants fraudulently stripped the equity from the properties by pocketing substantial sums from each loan transaction. A&E Mortgage allegedly conspired with other entities and individuals, including real estate appraisers, a title company, straw buyers and sellers, and promoters, to carry out these fraudulent transactions. A&E, also known as Colony Financial Services, is located in Woodbridge. In addition to A&E, defendants in the case include Darrin Jennings, the A&E company president, and A&E employees Reginald Price, Yvonne Strickland and Wayne Carless. Strickland and Carless are licensed mortgage solicitors.
Other defendants include: Complete Title, L.L.C of Woodbridge and Nichelle Jennings, the CEO of Complete Title and wife of A&E president Jennings. Also named as defendants are Premier Real Estate Appraisal Service, L.L.C. of Toms River and Darryl C. Haymon, a licensed real estate appraiser affiliated with Premier; Hammond Appraisal Service, L.L.C., of Burlington and Adrienne Ali, a licensed real estate appraiser affiliated with Hammond; Daniel Isiwele of Maplewood; Novlet Lawrence-Hoo of Whitehouse Station; William Soriano, an attorney whose practice is in Roseland; LG’s Business Services, L.L.C. of Bloomfield and LG’s company president Elizabeth Greenlee.
Milgram v. Ultimate Real Estate Solutions, L.L.C.: Filed in Camden County, the state’s six-count complaint alleges that Ultimate Real Estate Solutions of Williamstown, Gloucester County, set up a scheme in which it used the names and credit scores of “investors” to acquire properties through fraudulent mortgage applications, then leased these properties to rent-to-own consumers, who believed they would become owners of the properties while Ultimate paid the mortgages. While Ultimate collected the rental payments from rent- to-own consumers, it did not pay the mortgages on the properties.
The scheme was financed with mortgages brokered by a firm known as 1st Metropolitan Mortgage Services on the basis of misrepresentations and false information about the investor/loan applicant.
The transactions ended with investors losing properties to foreclosure, and rent-to-own customers being evicted upon foreclosure, despite having made their rental payments.
The state alleges the scheme was developed to allow Ultimate Real Estate Solutions to take unwarranted proceeds from the property transactions, and to allow 1st Metropolitan to collect unwarranted fees and commissions on the fraudulent loans. The lawsuit accuses Ultimate Real Estate Solutions of conspiring with 1st Metropolitan Mortgage and with real estate appraisers and others to carry out these fraudulent transactions.
In addition to Ultimate Real Estate Solutions, defendants named in the complaint include Halimah Prater, president and registered agent of Ultimate Real Estate Solutions; Empire Equity Group, Inc., doing business as 1st Metropolitan Mortgage Services of Mount Laurel, Cassandra Coles and Frank Memmo, licensed mortgage solicitors employed by 1st Metropolitan.
Milgram v. American Millenium Company, L.L.C.: filed in Passaic County, the state’s three-count complaint alleges that the defendants set up a scheme in which they recruited buyers to purchase “investment” properties with no money down and no out-of-pocket payments on the promise that rental income from the properties would more than pay for the mortgage costs.
The defendants would then acquire properties through fraudulent mortgage applications, on the basis of greatly inflated property values and through use of misrepresentations and false information concerning the investor/loan applicants.
The state’s lawsuit alleges that American Millenium Company conspired with real estate appraisers, a title company and others to carry out these fraudulent transactions.
Defendants in the case include American Millenium, doing business as American Mortgage Company of Florham Park, and Martin Ohlmeyer, a licensed mortgage solicitor employed by American Mortgage. Other defendants include Equititle, L.L.C., a title insurance and real estate settlement service firm located in Morganville, Monmouth County; The Addison Group L.L.C., a real estate appraisal firm located in Bridgewater, as well as Orlando Barardo, a formerly licensed real estate appraiser affiliated with The Addison Group; Radell Appraisal Services of Bloomfield, as well as Donald Radell, a licensed real estate appraiser; Valentine Morrisson, L.L.C., Green Ink Investments and individuals Jamal Clark and Leslie Clark.
Each of the State’s three lawsuits alleges “a pattern of racketeering activity” as defined by the New Jersey Civil RICO statute. Each of the lawsuits also charges violations of the state Consumer Fraud Act, including unconscionable business practices and making false promises, misrepresentations and knowing omissions of fact.
In addition, the A&E complaint alleges violation of the federal Credit Repair Organizations Act. The Ultimate Real Estate Solutions complaint also alleges violation of the Credit Repair Organizations Act, as well as state advertising regulations.
The American Millenium complaint alleges violation of state advertising regulations as well. The three lawsuits were developed by the Affirmative Litigation Section with assistance from the Department of Banking and Insurance, which referred one matter and provided information regarding others.
Attorney General Milgram thanked Deputy Attorney General Megan Lewis, Chief of the Affirmative Litigation Section; Deputy Attorney General Jim Michael of the Affirmative Litigation Section; Assistant Attorney General James J. Savage; and Supervising Investigator Jennifer Micco of the Division of Consumer Affairs, for their hard work on the mortgage fraud investigation and lawsuits.
