English: A sign advertising foreclosure rescue...On December 9, 2011, a federal grand jury in the Southern District of Florida indicted Lisa Wright, 46, and Cathy Saffer, 52, of Pompano Beach, FL, on one count of conspiracy, three counts of mail fraud, and three counts of wire fraud in connection with alleged efforts to defraud homeowners and banks in a foreclosure rescue scheme. Also charged with one count each of conspiracy and wire fraud was Barrington Coombs, 57, a certified public accountant of Weston, FL.

Not-So Helping Hand

The Indictment alleged that from 2006 to 2009, Wright and Saffer operated Foreclosure Solution Specialists ("FSS"), which advertised itself as a business offering homeowners facing foreclosure with assistance for remaining in their homes. During communications with distressed homeowners, Wright and Saffer misrepresented to those homeowners that:

  • their homes would be sold to investors;
  • they could remain in their homes after the sales; and
  • they would have an opportunity to repurchase the homes at a later date.

Sham Of A Sham

Rather than selling the homes to legitimate investors, Wright and Saffer designed sham sales to straw purchasers, whom they paid to participate in the scheme.   Further, Wright and Saffer were charged with making numerous misrepresentations on loan applications regarding the purchasers' net worths, incomes and employment histories in order to induce lenders to fund loans. In connection with this aspect of the scheme, Coombs was paid to sign a letter which falsely vouched for the fraudulent information on various loan applications.

Once the sham sales were completed, Wright and Saffer pocketed the equity from the subject homes and, thereafter, allowed the loans to go into foreclosure. Ultimately, victimized homeowners lost all of the equity in their homes, and generally forced to vacate their homes.


On August 02, 2012, a jury found Saffer guilty of one count of conspiracy, three counts of mail fraud, and two counts of wire fraud; and Coombs, of one count of conspiracy and one count of wire fraud. Previously, Wright pleaded guilty.

Bill Singer's Cmment

"Street Sweeper" previously published Desperate Homeowners Victimized By Mortgage Modification Predators (May 18, 2012), which discussed the federal governments "Operation Stolen Dreams," a law enforcement initiative that targeted the mortgage fraud that had, in part, fueled the homeownership that so many proved unable to afford.  In that column, we discussed the criminal case against American Home Recovery ("AHR") - a purported mortage modification company that collected hundreds of thousands of dollars in fees from distressed homeowners seeking mortgage renegotiation.

You may recall that on the May 18th date of publication of my column about the AHR case, Facebook undertook its ill-fated initial public offering.  Perhaps now, after that disastrous offering and the more recent events of Knight's market making meltdown and the ongoing chaos of the ECB's vacillation, my closing remarks in that column are even more forceful:

This morning, a lot of you will be glued to the television watching the launch of Facebook's IPO and its likely meteoric rise in the aftermarket. Elsewhere, folks will be watching the ongoing meltdown of the world's stock markets as Greece's financial mess continues to roil the stock markets. Still, many less fortunate just won't give a damn about Facebook or the Euro's plight because they're broke and have been so since the onset of the Great Recession. Among the detritus of that last financial collapse were many of the poor homeowners who were evicted when they could no longer pay their mortgages. Of course, we'll leave for another day whether many of those folks should have been living in homes that they could barely afford or should never have been approved for in the first place.

This AHR case should be a stark reminder to all of you. The chaos that started with FNMA, furthered by unscrupulous lending practices, fueled by wannabe homeowners taking on more than they should have, and then exponentially skyrocketed by Wall Street's insatiable desire for product is still exacting its toll in 2012. Surely, Wells Fargo, Bank of America, Citigroup, and other large banks will be dealing with this fall-out for years to come. While the recent disclosures about MF Global or JP Morgan are interesting, they hardly invoke the sense of personal tragedy that one feels for the desperate homeowners victimized by the low life defendants in AHR.

See two recent video interviews in which I comment on the present state of Wall Street: