North Carolina Shutters “We Buy Homes” Scheme

By Mark Huffman
ConsumerAffairs.com

July 13, 2007

Foreclosure • FDIC Launches Foreclosure Prevention Initiative • Foreclosure: Losing the American Dream • Buying a Home in Foreclosure: What You Need to Know • Mortgage Crisis? Act Now to Avoid Foreclosure • Foreclosure Not Inevitable, Fast Action Needed • Avoiding Foreclosure Takes More Than Hope --- News • Foreclosure Activity Slows For Third Straight Month • Do Loan Servicers Really Prefer Foreclosures? • New North Carolina Law Tries To Slow Foreclosures • August Foreclosures Up 18 Percent Over 2008 • Foreclosures Still Rising Along With Unemployment • Prevention Needed to Curb Foreclosure Rescue Scams • How Can You Benefit From The Obama Mortgage Plan? • Devil Is In the Details of Foreclosure 'Bargains' • Foreclosures Rise 28 Percent in November • At Last: Bailout Trickling Down to Struggling Homeowners • Mortgagees Who Live In Home Less Likely To Default • Foreclosure Activity Increases At Double-Digit Pace • Lenders See Foreclosure Situation Worsening • One-Third Of Recent Home Buyers "Underwater" • Worst Foreclosure Activity Limited To Four States --- • More ...

You’ve seen the ads promising “we’ll buy your house – for cash!” In North Carolina, state officials say one such company making that promise to homeowners was nothing more than a scam.

A North Carolina court has ordered Charlotte Home Solutions to stop its operation that purported to buy homes and then resell them to buyers with poor credit.

Attorney General Roy Cooper said the company promised to buy homes from people who needed to sell quickly but instead left them vulnerable to foreclosure.

“This scam hurt both homeowners and people who hoped to become homeowners,” said Cooper. “We’ve put a stop to their phony ‘We Buy Homes’ promises so no more consumers will be caught up in this scheme.”

As alleged in Cooper’s complaint, three local businessmen began doing business as Charlotte Home Solutions in September 2002. The partners advertised their business through signs, mass mailings to targeted neighborhoods and a website that promised to buy consumers’ homes.

However, rather than purchasing houses outright, Charlotte Home Solutions convinced homeowners to sign title to their homes to a trust controlled by the partners. Because Charlotte Home Solutions didn’t assume the mortgage on the property, the original homeowner unknowingly remained responsible for mortgage payments on the house.

Cooper contends that Charlotte Home Solutions then advertised these homes for sale to consumers with bad credit, offering them an option contract to rent a home until they could qualify for financing. Purchasers had to pay a substantial deposit that was non-refundable in addition to monthly rent payments.

However, many of these tenants were never able to get a loan to buy a home.

Despite the fact that Charlotte Home Solutions collected rent money, they failed to make mortgage, tax and homeowner’s association payments on the homes, leading in some cases to foreclosure proceedings against the original owners. When the homes were foreclosed on, the tenants were also forced to leave and lost their deposit and their option to purchase a home.

The North Carolina Real Estate Commission also joined in the complaint and consent judgment against one of the partners, William Keaton, who was allegedly practicing real estate without being properly licensed.

Legislation backed by Cooper that is currently pending in the North Carolina General Assembly would put controls on similar “We Buy Homes” operations to help protect homeowners and homebuyers from falling prey to these types of schemes.

More Scam Alerts ...

Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.

Share		Follow us on Twitter.

Back to the top |