LAND-LOAN SHARKS: Behind Foreclosure Rescue Scheme
City attorneys are suing a wolf in sheep’s clothing. Many house-owners in the grip of foreclosure have in desperation sought the help of this land-loan shark, Equity Holding Corporation of California. Equity offered them the rosy red idea about forming a Trust. But the apple was rotten to the core. Owners have found themselves in a worse debt situation without hearth and home. Investigators report that many lawsuits have been brought against Equity Holding Corporation of California. The saving attorneys, Timothy Hegarty and Carolyn Sharp-Hegarty of Woburn were once the victims. Twelve years ago availing of a loan they had bought the house of Carolyn’s mother at a high interest of 13%. Things became bleak when Sharp-Hegarty lost her main job and they fell behind a few months in the mortgage.
Once foreclosure knocks at the door not many options are left. But she fell into the trap of promises put out on the Internet by Equity Holding Corporation, a land trust company. Equity suggested a way out of the dilemma was to form a Trust for the house. This would give the debtor few years time to recoup and recover by arranging for an investor to pay the dues. In good faith the Hegartys sent the monthly cheque directly to Equity to pay the mortgage company. But each month there were extra fees. Once more the debt backlog increased. To their dismay, attempts at refinancing showed that they no longer owned the property! Equity had got them to sign off the property to themselves! Playing upon sentiments Equity had got them to sign documents on good faith without scrutiny.
Other owners teamed up with the Hegartys to sue Equity for violating state and federal consumer protection laws. Kim Breger of Harvard Law School’s legal services observed that Equity had levied an interest of 68% per annum by borrowing against the homeowner’s equity. It cancels the backlog but at an extremely high price. Although the Hegartys got back the deed and a cash settlement, others were not so lucky. Team Five investigators dug up the fact of hundreds of other victims of Equity Holding Corporation from Massachusetts Registry of Deeds. Half the house-owners of Worcester County lost their houses. Equity sold it to third parties.
Equity protests that the homeowners know what they are doing when they sign. It is not their fault that if the party gets further into debt. Their way out of a debt trap is better than putting the house than bankruptcy or putting the house up for sale.
[...] homeowners have not been able to bail themselves out by taking out a second mortgage, a home equity loan, or even by selling the home. While the increase is foreclosures is a trend general to California, [...]
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