Attorney General Martha Coakley has filed a proposed settlement with the U.S. Bankruptcy Court in Boston, Massachusetts, with five mortgage lenders that funded loans which facilitated fraudulent foreclosure rescue transactions orchestrated by Brockton, Massachusetts attorney Alec Sohmer. The Attorney General, together with the Chapter 7 trustee in Sohmer’s bankruptcy case, have requested bankruptcy court approval of the settlement, which impacts 26 residential properties that are part of Sohmer’s bankruptcy case. The Attorney General filed a Motion to Amend the Complaint to add the closing attorney who conducted the transactions, another attorney who referred distressed homeowners to Sohmer in exchange for a fee, and a mortgage broker who arranged financing for many of the deals.
Four professionals were named in Monday's Motion to Amend the Complaint, whose participation was essential to the continuation of Sohmer's scheme:
Andrew Palmer, Norwell, Massachusetts, is the attorney who closed all the transactions, drafted false Housing and Urban Development Settlement Statements depicting false information about the transactions, and collected attorneys fees and title/closing insurance commissions for each closing.
Shaun Ellis, Sagamore, Massachusetts, is a Sandwich-based attorney who referred clients to Sohmer and accepted referral fees and/or other benefits from Sohmer for the referral of clients who ended up victimized by Sohmer transactions.
Edward de la Flor, Londonderry, New Hampshire, is the primary mortgage broker.
Carteret Mortgage Corporation, based in Centerville, Virginia, with offices in Boston and Charlestown, is the mortgage broker/originator and de la Flor’s employer. The corporation originated and brokered many of the loans involved in the Sohmer transactions. Both Carteret and de la Flor profited from the transactions by collecting closing points, commissions, yield spread premiums, sales bonuses and other fees.
"These fraudulent foreclosure rescue transactions never would have occurred without the participation of mortgage lenders and closing attorneys that represented mortgage lenders," said Attorney General Martha Coakley. "This settlement is designed to return homeowners to their financial position before Sohmer arranged foreclosure rescue transactions that stripped their home equity and required payment of Sohmer’s fees and high settlement costs."
Under the terms of the proposed lender settlement, filed late last week, the lenders will pay restitution to the homeowners victimized by Sohmer’s fraudulent scheme by reducing the outstanding mortgage liens on the homeowner’s properties. As a result of these transactions, 26 homeowners transferred title of their homes to Sohmer. Under the terms of the agreement, the original homeowners can reclaim their property by paying a reduced mortgage obligation instead of the inflated mortgage loan arranged by Sohmer. In total, across 26 properties, the settlement would provide approximately $1 million in reduced mortgage obligations.
The properties include:
36 Restful Lane, Wareham, MA
389 Centre Street, Hanover, MA
9 Midway Street, Wareham, MA
28 Vineyard Avenue, Oak Bluffs, MA
57 Stage Coach Road, Centerville, MA
2 Belgian Road, Danvers, MA
667 Bridge Street, E. Bridgewater, MA
49 Courtland Street, Middleboro, MA
5 Joe Jay Lane, Forestdale, MA
15 Beechwood Drive, Mashpee, MA
73 Adams Avenue, Pembroke, MA
19 Shangri-La Blvd., Wareham, MA
3 Lady Allison Way, Bourne, MA
27 General Patton Drive, Hyannis, MA
23 Roxanne Road, Pembroke, MA
71 Legion Parkway, Suite 23, Brockton, MA
200 Cordwainer Drive, Suite 301, Norwell, MA
159 Green Street, Weymouth MA
10 Samoset Road, Mashpee, MA
420 High Street, Bridgewater, MA
1 Diamond Street, Plymouth, MA
23 Primrose Lane, Middleboro, MA
46 Bourne Neck Road, Buzzards Bay, MA
72 Purchase Street, Carver, MA
7 Butterfield Lane, Walpole, MA.
The lenders agreeing to the settlement to date are: First Horizon Home Loans; Option One Mortgage Corp.; Wells Fargo Bank, N.A.; America Brokers Conduit; and Ocwen Loan Servicing, LLC. Additional lenders may participate in advance of an October 15th hearing before the Bankruptcy Court.
Assistant Attorneys General Christopher Barry-Smith and Jacqueline Welch of Attorney General Martha Coakley’s Consumer Protection Division are handling this matter with the assistance of Liam Lowney and Ashley Cinelli of the Victim Services Division, financial investigator Christine Murphy, and paralegal Yolanda Kruczkowski.
Rachel Dollar, the editor of Mortgage Fraud Blog is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors.