|A Rhode Island company that offered foreclosure assistance has reached an agreement with the attorney general to stop selling homes it purchased from desperate borrowers. State officials hope to have the properties returned to the original owners.
JMC Investments has reached an agreement with Rhode Island Attorney General Patrick Lynch to cease reselling properties it has purchased from homeowners who were faced with losing their homes, Mike Healey, a spokesman in Lynch's office, confirmed to MortgageDaily.com.
Lynch's office took JMC to state court, alleging deceptive business practices by not fully telling people they were losing their homes. Some simply wanted to refinance and did not want to sell.
"What these individuals did not know," Lynch said in a written statement, "was that when they signed the dotted line, they signed away their homes."
Sixteen properties are covered by the agreement. JMC is not permitted to record deeds or purchase agreements with any customers. Lynch's office is working with JMC on returning homes the company bought to their original owners, Healey said.
"Other than returning the deeds of the properties to their rightful owners, our biggest (stipulation) was ensuring that we'd be able to help any new victims who came forward because of the publicity of the issue," Healey said. "Our agreement with JMC does both."
Lynch said JMC targeted people who were facing the possibility of losing their homes. He called the company "unscrupulous."
"To take advantage of people who are extremely vulnerable due to enormous financial pressures is nothing short of despicable," Lynch said.
JMC would help find financing for people who could not get credit on their own. JMC would pay off the mortgages, and then the homeowners could buy the house back from JMC for $7,000. Homeowners also had to pay JMC's costs.
Lynch said the homeowners "specifically expressed that they did not want to sell their property and were assured by the defendants that foreclosure could be avoided without selling their homes."
Believing they would maintain ownership the homeowners signed various documents, Lynch said. But JMC did not allow their clients to have copies of all the documents.
"At a later date, the complainants attempted to either refinance the mortgage or sell the property, it was discovered that they had unknowingly and unintentionally executed deeds conveying their homes (JMC)," Lunch said.
In court papers Lynch accused JMC of running false ads in direct mail pieces and on the Internet, billing itself as a foreclosure specialist that helps homeowners save their homes.
"Their advertisements warn prospective clients against real estate agencies that will sell property at very little or no profit to the owner," Lynch said. "But that is exactly what JMC does. The bottom line for consumers is to beware of signing any papers without adequate knowledge or legal representation. You run the risk of not only having the rug -- but your home, as well -- pulled right out from under you."