Straw Buyer Defendant Who Participated in Unfair and Deceptive Foreclosure Rescue Scheme Enters Into Consent Judgment with Attorney General Martha Coakley's Office
On March 30, 2007, the Attorney General's Office filed a complaint against Mereus and 18 other defendants that participated in a foreclosure rescue scheme targeted at distressed homeowners facing foreclosure. Each of the defendants allegedly conspired through their respective roles as mortgage brokers, real estate brokers, closing attorneys or straw buyers to deceive homeowners into selling their homes under the false promise of avoiding foreclosure and maintaining their homes and their homes' equity. The Attorney General's Office alleges that the defendants not only obtained the titles to the homeowners' residences but also stripped most of the homes' equity by failing to account for deposits and other monies due from the buyers, disbursing sale proceeds for unearned brokers' fees and other fictitious services, and drafted and submitted to lenders HUD Settlement Statements that did not accurately reflect the disbursements made in the transactions. In certain cases, the defendants allegedly resold the homes in multiple transactions amongst themselves, thereby stripping the homes of all their equity. According to the complaint, Mereus received a payment for allowing the defendant mortgage brokers to use her in name in applying for a loan to purchase one of the properties identified. Contrary to representations made to the lenders in the completed loan application, Mereus took title to that property without paying any deposits or closing costs, and without intending to occupy the property.
Under the terms of the consent judgment filed today in Suffolk Superior Court, Mereus is prohibited from acting as a straw buyer or otherwise obtaining loans through misrepresentation and must pay $5,000 in restitution and $1,500 in attorney's fees and costs to the Commonwealth. The $5,000 represents the money Mereus was paid for her role as a straw buyer in the transaction. The Attorney General's Office will distribute the restitution paid by Mereus to those Massachusetts consumers that it determines have suffered damages as a result of the of the foreclosure rescue schemes.
Mereus is the second defendant and first straw buyer out of the original 19 defendants to settle. In June, the Attorney General's Office reached a settlement with closing attorney Valerie Hanserd. Under the terms of the settlement, Hanserd paid $115,000 and resolved allegations over her role in both this foreclosure rescue scheme case and a second related enforcement action against her and Leo Desire Sr. and Primary Mortgage Resource, Inc., In that second case, the Commonwealth alleges that the defendants together altered a deed from the Federal Home Loan Mortgage Corporation (a.k.a. "Freddie Mac"). That case was tried against remaining defendant Primary Mortgage Resource, Inc. in June of this year and remains under advisement.
Trial is scheduled to commence against the remaining defendants in the foreclosure rescue scheme case on November 9, 2009, at 9:00 a.m. in Suffolk Superior Court.
This case is being handled by Assistant Attorneys General Gillian Feiner, Amber Anderson Villa and Stephanie Kahn, and Paralegal Yolanda Kruczkowski of Attorney General Coakley's Consumer Protection Division with assistance from Investigator Nancy Ward.