Video: Vulnerable homeowners target of scams

updated 12/3/2007 2:31:15 PM ET 2007-12-03T19:31:15

Joy Jackson’s wedding looked like a fairy tale wedding: It included a designer gown with a 40-foot train, champagne and lobster for 360 guests, and a private concert by Grammy winner Patti LaBelle.

But investigators now suspect the extravagant wedding, believed to cost as much as $800,000, came out of the pockets of some hard-working homeowners.

“I see fraud cases all the time,” says Stephanie Mearse, who was a customer with the Metropolitan Money Store. “I thought, well, I could see that coming. But with them, I couldn’t see it.”

Several families NBC interviewed were in danger of losing their homes in the Washington, D.C. area. They say the bride— a former exotic dancer turned mortgage broker— and her Metropolitan Money Store promised help. But investigators claim that Jackson’s Metropolitan Money Store was actually running a sophisticated scheme that bilked hundreds of homeowners out of tens of millions of dollars.

Investigators say it worked this way: The Metropolitan Money Store persuaded desperate homeowners, behind on their mortgages, to sign over the deed to their home to a third party. The come on was that they could stay in the house and buy it back after a year.

But investigators say what actually happened is that the company borrowed more money against the home, stripping out almost all the equity, making it impossibly expensive for the homeowner to buy it back.

Homeowners we interviewed lost between $100,000 and $250,000 in equity in their homes.

“It’s embarrassing and scary,” says Vera Worsley, another former customer.

“No one likes to be lied to, especially about their home,” says Clarence Carter, another ex-customer.

While no charges have been filed, the FBI now is investigating. And the District of Columbia has sued Jackson and others are calling it a scam.

“They took people who were in trouble, who needed a life raft and they sunk them deeper into the water,” says DC Attorney General Linda Singer. “They pushed them under.”

And this kind of scam is happening all over the country. The FBI says mortgage fraud cases have tripled since 2003, with 1200 now under investigation.

“We believe the fraudsters are picking up on the fact that foreclosures are up and that there’s an opportunity here to get to people that are in real distress,” says Salvador Fernandez of the FBI.

Multiple calls and emails to Joy Jackson and her family were not returned. Her former customers are now suing.

Their homes are now in foreclosure.

“It’s hard to even work and do a good job because you’re worrying on one hand whether you’re going to come home and your things are out on the street,” says Angele Reid, another former customer.

“I just pray every night for our home,” Reid adds. “I don’t want to be out on the street.”

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments