House flippers and scam artists prey upon low income Texans as they desperately struggle to find a home or try to hold on to the house that they already have. Texas Attorney General Greg Abbott has filed a lawsuit in Harris County District Court against a host of individuals and corporations in the Houston area who are alleged to have deceived and exploited poor families through these practices.
The extent and wide ranging nature of these particular alleged abuses is appalling. To understand it in detail read the complaint filed by the Texas Attorney General.
Yet we know that for every one of these cases that gets prosecuted there are many more. Most often they prey upon the elderly, the poor and the immigrant communities of Texas.
Eleven Houston area defendants along with several for-profit and one nonprofit corporation are said to have engaged in a real estate scheme involving more than 40 mostly lower income houses. The rightful owners of these houses and their heirs were defrauded of more than $1.5 million according to the attorney general.
According to the complaint the scheme targeted properties owned by people who had recently died. A labor contract with trust deed was filed on the home of the deceased that falsely claimed that the defendants performed foundation repair, mold remediation or other repair work for the homeowner. The complaint states that a forged and backdated document was filed indicating that the homeowners had signed the deeds prior to their deaths. This allowed the defendant’s to claim an interest in the homeowners house because the defendants claimed the non-existent repair work was never paid for.
According to court documents, the scheme targeted properties owned by the recently deceased, filed a “labor contract with trust deed” on the residence, and falsely claimed that the defendant’s company was performing foundation repair, mold treatment or other repair work for the homeowner. To complete the scheme and obtain fraudulent titles, the defendants would forge and backdate the owners’ signatures by several years, thereby indicating that the homeowners had executed the deeds prior to their deaths. Through the falsified deeds, the defendants established a claim to the homeowner’s property when the bill for the non-existent repair work went unpaid. The forged deeds were filed with the Harris County Clerk’s office and the defendants would then convey the property to their cohorts or to unsuspecting third parties.
The complaint cites at least one instance in which the defendants “sold” one of the houses under a contract for deed to an innocent third party homeowner for $20,000.
According to the lawsuit the scam did not stop with swindling poor people out of their property and selling property they did not own to other unsuspecting poor people. Abbott alleges that one defendant also engaged in a home repair and foreclosure rescue scheme affecting other poor people.
One case involved a 67-year-old homeowner in Houston who had become delinquent on her loan payments because of medical and nursing home expenses for her dead husband. She had been notified by her lender that her home was subject to foreclosure.
The lawsuit states that the defendant appeared at her home and offered to help her save her home from foreclosure. He convinced her to transfer the title of her home to him temporarily on the promise that he would save it and return it to her. He then convinced her to pay him $1500 plus interest to stop the foreclosure along with a payment of $350 a month. One week later he convinced the homeowner to sign a deed of trust granting a lein to him The defendant’s brother’s company acted as trustee on the loan. The deed stated that the homeowner borrowed and received $28,255 from the defendant yet he never paid her any money whatsoever. He then told her he was going to take her to a title company to sign some more papers to transfer her home back into her name. But in actuality a warranty deed was executed transferring her property to another one of the defendants.