Thursday, November 6, 2008
7 News Investigations: Home Heartache
South Florida homeowners who thought they were paying a company to save their homes from foreclosure were instead being misled. That's according to a lawsuit filed by Florida's attorney general. The state is now suing that company and its owners for deceptive trade practices. As Seven News Patrick Fraser reports. Instead of saving their homes, many of the homeowners are left with nothing but home heartache.
WSVN -- Buying a home was the American dream, I say was because today that home is driving thousands of South Floridians into foreclosure and leaving them penniless.
In March I got a call from a man who told me he could stop the foreclosures.
Patrick Fraser: "So most foreclosures that are being done are being done illegally, in your opinion?
Blair Wright: "Yes."
Blair Wright claimed 95% of the foreclosures across South Florida were illegal because simple federal laws were not followed in the mortgage documents.
Blair Wright: "People don't know that geez, I was supposed to close on Wednesday and I actually closed on Thursday, that there was a technical violation with that which would literally let them off the hook."
Wright went to work opening a company called Outreach Housing and spending tens of thousands of dollars on ads telling struggling homeowners to come in that his team of 3,000 lawyers would save their homes.
Patrick Fraser: "I have learned thru the years if it sounds too unbelievable odds are its not believable. What you're saying doesn't sound believable. It doesn't seem possible that this many people are getting tossed out of their homes and could be saved."
So i put his interview on the shelf and told Wright I would wait to do the story until i talked to some of his customers to see if he saved their homes. I have now spoken to them.
Charles Wilford: "I wouldn't advise anyone to even go near Outreach because they are poison."
Charles Wilford is one of hundreds of homeowners who turned to Blair Wright and Outreach for help. Like the others he gave them 2/3 of his monthly mortgage payment thinking they were re-negotiating his loan with his lender.
Charles Wilford: "They didn't pay a cent, the only thing they did was take money out of my account, put it in their account."
Jim Schmidt says Outreach told him his mortgage was also illegal and they would go to court to have it wiped out.
Jim Schmidt: "I was paying 2/3 of my mortgage payment that they were putting in escrow, and that was basically the fee, instead of my mortgage payment, in lieu of it."
Loreen Mcdonald believed Outreach's sales pitch as well.
Loreen Mcdonald: "I gave them 5,500, might be a little more."
Patrick Fraser: "Loreen and Jim and Charles are not alone, Blair Wright told me he had 900 customers. 900 people turning their house payments over to Outreach each month believing he was going to deal with their lenders including negotiating a lower monthly payment, but it didn't happen that way."
Patrick Fraser: "Blair told me he had 900 customers you have uncovered 600. How many of those that you know of did his company save their house?"
Cindy Guerra: "We don't know of any whose homes have been saved."
Now the Florida Attorney General is trying to shut down Outreach Housing and Wright after receiving dozens of complaints from his customers all saying the same thing.
Cindy Guerra: "Our lawsuit alleges that the money the consumers paid went to Outreach Housing. We know that it didn't go towards negotiating and reducing the principal or the balance due. We know that it didn't go to help these folks out."
Because of the lawsuit Wright told me he could not talk to us again, instead he sent me a statement saying Outreach Housing has done nothing wrong and blaming his problems on two attorneys. He is now suing one of those attorneys.
In the meantime Outreach is still in business waiting to see if the Attorney General succeeds in shutting them down and forcing them to return the money they took from their customers.
Charles Wilford: "The mortgage company is still putting me in foreclosure."
Leaving behind hundreds of homeowners in worse shape than before.
Jim Schmidt: "But for 1100 dollars and a damaged credit rating I have nothing to show for it."
They believed Wright's promise he could save their homes, instead all they got was home heartache.
Late this afternoon Blair Wright contacted Patrick saying his business model changed six months ago. Wright says "Today our organization works only at assisting homeowners who are exercising their rights at the federal level, because the prior attorneys saw such gross inconsistencies at the circuit court level." He also says "We are the best friend homeowners have in this ugly economy and the true villains in this crisis are the lenders."
The Attorney General's office says if you have any complaints about Outreach Housing, call 1-866-966-7226. If you missed the number, you can find it on our website, wsvn.com.
Florida Attorney General: