Homeowner Faces Foreclosure after a Fraudulent Loan Restructuring

Imogene Hall is a Jamaican immigrant who is about to lose her Florida home by virtue of a bank repossession, on the Monday after Thanksgiving in 2010. She will lose her home for a $50,000 loan she took out from her home equity to pay for her bills and tide her over while she sought employment back in 2006. She was one of the many victims of mortgage broker Johnson Cuffy, who is now in prison for grand theft.

Cuffy used a refinancing strategy which was described by mortgage investigators as an outright fraud.  He is currently facing mortgage fraud charges that could add 30 years to the 11-year jail sentence he is serving now.

Hall’s problems started when she turned over the title of her property to Cuffy, then manager for BlueKap Financial Group for a refinance that will enable Hall to withdraw $50,000 from her home equity. Cuffy somehow managed to use a man named Kervyn Harris to secure a $230,000 loan from Argent Mortgage, a subprime lender using Hall’s property as collateral.

The ensuing foreclosure was handled by Florida Default Law Group, a firm now facing investigation for employing a flawed documentation process to repossess homes. Hall’s efforts to fight the foreclosure with her mortgage fraud defense were thwarted by Judge Jeffrey Rosinek, who decided in favor of Deutsche Bank, the trustee representing Argent Mortgage on Hall’s foreclosure case.

Unlike other homeowners struggling to keep up with their mortgages, Hall has been meeting her mortgage obligations religiously when she received a notice of default for her home. Cuffy has convinced her to make her mortgage payments to BlueKap and the money never made it to the lender. Investigation revealed that Hall received bogus receipts monthly until she received the foreclosure notice from Argent Mortgage.

To make matters worse, Hall had the misfortune of hiring unscrupulous lawyers who represented her poorly while charging her with exorbitant rates. Hall purchased her home in 1997 for $80,000 and in the face of strong evidence that she was a victim of mortgage fraud the bank won the foreclosure case.

Florida’s Mortgage Fraud Task Force has seen several similar cases of mortgage fraud. Task force Chief R. Scott Palmer said the practice was prevalent during the housing market boom years when homeowners can easily take out money from their home equity to pay for cars, vacations and other non-essential things.