ALBANY, N.Y. (Legal Newsline) - New York Attorney General Eric Schneiderman announced a $400,000 settlement has been reached with the alleged participants in a mortgage rescue scam in Long Island.
According to the complaint, the scam involved mortgage leasebacks in which homeowners were offered an opportunity to avoid foreclosure by refinancing their mortgages and increasing their credit scores.
Homeowners were asked to turn over their titles for a “sale-leaseback” agreement where they would still be allowed to live in their home and pay rent. In turn, they would have the title returned to their possession after a year.
The money paid was allegedly never used to pay down the mortgages, making evictions and foreclosures inevitable.
“This shameful scam re-victimized families already suffering from the collapse of the housing market,” Schneiderman said in a statement.
“My office has the resources to connect families in danger of foreclosure with qualified housing counselors and lawyers. We’ve already helped more than 50,000 families across the state, but our work will not end until we’ve guaranteed that every family in need can get the help they deserve.”
The lawsuit named participants in the alleged scam as John Rutigliano, Kenneth Kiefer, Barry Zornberg, Nanci Hirsch, Cory Covert and Leonie Neufville.