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Bank of America Sues Fidelity Land Trust With Foreclosure Action

Fidelity Land Trust Company, a Florida based company who claims they are the “only real cash buyer of properties with negative equity” (source), a company I’ve writen about before (here) has been sued by Bank of America in Volusia County, Florida.

I’m not sure if this is the first time they’ve been sued for foreclosure on one of the properties they’ve taken over as part of the program homeowners participate in for a fee.

A recent article in the Palm Beach Post described the Fidelity Land Trust plan fees and costs. Past requests for information by this author to Fidelity Land Trust have gone unanswered.

FIDELITY LAND TRUST PLAN

BENEFITS: If successful, the homeowner will have a canceled mortgage and owe a lower amount to the trust than the unpaid loan amount from the original mortgage.

RISKS: If unsuccessful, the homeowner has paid a fee to the trust and the lender could still pursue the homeowner for the unpaid loan amount.

HOW IT WORKS: Underwater homeowner signs the deed over to the land trust. The fee charged by Fidelity Land Trust for this is $3,500. The land trust becomes the owner of public record while the homeowner, now beneficiary of the trust, remains private.

NEW PAYMENT: Homeowner signs a 1-year, $1,000-a-month contract with the trust.

THE MORTGAGE: In an attempt to cancel the mortgage, the trust sues the homeowner’s mortgage servicer or lender, claiming fraud or legal violations. Upon favorable outcome of litigation or negotiations, the homeowner’s contract with the trust extends to 10 years.

NEW PAYMENT: If the trust wins its case, the homeowner is still liable for the debt or promissory note, but the trust tries to negotiate with the lender to pay the note off at a lower price. Because there is no longer collateral — the home — attached to the note, the lender may be motivated to settle for pennies on the dollar. If not, the lender may go after the borrower for the full amount.

SELLING THE NOTE: If the trust pays off the note and gets title insurance on the home, it can sell the promissory note on the secondary market, much like a mortgage-backed security.” – Source

In a new review of the Fidelity Land Trust site, fidelitylandtrust.com, the land trust services page doesn’t actually say they will prevent a home from being foreclosed on. Rather it appears to be focused on asset and liability issues.

  • Judgments and Liens: A Land Trust will provide protection from Judgments and Liens.
  • Avoiding deficiency judgment. If you expect your property to be foreclosed, you can deed it to a land trust and the foreclosure will then need to be filed against the trustee. This can help avoid a deficiency judgment.
  • Avoiding condo and homeowner association judgments. Some people who have lost their property in foreclosure to a bank have judgments for thousands of dollars entered against them for unpaid association fees. This could be avoided if the property was owned by a trust and not in their name.
  • Limiting liability. By having a land trust sign notes and mortgages you can limit your liability for a default judgment if there ever is a foreclosure. – Source

Other claims made on the Fidelity Land Trust site talk about the benefits of their approach is to engage in “preemptive litigation against mortgagees or their assignees.” In the Volusia County case I could not find a case filed by Fidelity Land Trust against Bank of America on this property in question prior to the foreclosure.

If I was a betting man I would imagine Fidelity Land Trust would next move to challenge the underlying note on 2936 Estill Street, Deltona, Florida. We shall see.

Bank of America Sues Fidelity Land Trust With Foreclosure Action

2936 Estill Street, Deltona, Florida

What makes this Fidelity Land Trust Case interesting is that Bank of America sued The Fidelity Land Trust Company who is the owner of the property under a quit claim deed in February of this year. – Source. Yet the mortgage remains in the names of the original couple. Bank of America also states the suit is against unknown tenants and others with unknown interests as well.

In this case Bank of America is the “servicing agent for the owner of the note” and states the mortgage on the property was executed on April 16, 2009 between the then homeowners and SurePoint Lending / First Residential Mortgage Network. The suit states the note and mortgage were subsequently transferred to Bank of America as servicing agent.

The suit provides a copy of the alleged transferred note:

Bank of America Sues Fidelity Land Trust With Foreclosure Action

Bank of America Sues Fidelity Land Trust With Foreclosure Action

Bank of America Sues Fidelity Land Trust With Foreclosure Action

According to the suit filed the owner of the property is listed as Fidelity Land Trust Company so there is an acknowledgement they are the owner but not the note or mortgage holder. The suit states mortgage payments on the property have not been made since May 2, 1011 and they declare the note to be accelerated and as of the date of the suit $171,677 is now due.

You can read the complete suit here.

So it will be interesting to watch to see what happens in this case and if Fidelity land Trust can live up to their press release title, “Homeowners Facing Foreclosure Protected from Creditors and Liens by Land Trustee Company.”

Some consumer statements online appear to feel as if the Fidelity Land Trust program will prevent foreclosures:

“I was told by Fidelity land trust that they could form a Florida land trust for me that would block the foreclosure, and they would prove loan was predatory through country wide, and would then sell me back the house at a reduced price, after suing the bank for peditory practice.” – Source

Fidelity Land Trust Marketing Representations

As Florida HRM, a marketing representative for Fidelity Land Trust says, “This program has been successful at helping 100% of its qualified homeowners obtain a new mortgage and regain their equity.” – Source

Bank of America Sues Fidelity Land Trust With Foreclosure Action

Additionally Florida HRM says once consumers sign up in the program the existing mortgage will be cancelled in 90 to 120 days. – Source. This is a claim that does not seem to be supported with facts from the Fidelity Land Trust site.

Interestingly, the marketer, Florida HRM, does not appear to be registered to do business in Florida as a registered company with the Secretary of State and is not registered under a fictitious name either. The BBB seal on the bottom of their site actually links to Homeowner Rescue Mission at the same address of 413 North Federal Highway, Hallandale, Florida.

Bank of America Sues Fidelity Land Trust With Foreclosure Action

A search of Homeowner Rescue Mission could not locate a registered company under that name but is a registered fictitious name for CMG Marketing Firm. A similar named company, Century Marketing Group is at the same address. CMG Marketing Firm is actually a Nevada LLC that is registered to do business in Florida. – Source. State records list the managing member as Shane Frankovic. – Source

While Florida HRM is marketing to consumers about their skills to help people eliminate their mortgage, consumers should be aware this company labels itself as a marketing and advertising firm and not experts in real estate issues. – Source

Century Marketing Group sounded familiar to me so I went back and searched. I was right. Century Marketing Group was named in an action by the State of Florida to deal with timeshare resale scams. Century Marketing Group was part of a group of five marketers that were fined $31,000 as part of the Florida Attorney General sweep. – Source

Consumers Should Ask for More Information

It would be interesting to get a public comment from Fidelity Land Trust on the measured success of their program to determine its effectiveness in delivering the results promised. And as I observed, one of those promised benefits does not appear to be protecting homes from foreclosure. But do they even claim they can stop your home from foreclosure?

If the Bank of America suit is accurate, Fidelity Land Trust took over the property named in the suit, with a quit claim deed, nine months after the last mortgage payment had been made. Certainly you would think a foreclosure action was foreseen because of that.

But if there is some verifiable evidence the Fidelity Land Trust Company program can live up to the marketing claims there should be a number of cases where mortgages on properties of clients should have been cancelled by now. I for one would love to see them. And if Fidelity Land Trust Company can be forthcoming with that data it might show a new approach consumers can use to deal with obligations secured with their property. But if they can’t produce such performance data to back up their claims, consumers need to know that.

Bank of America Sues Fidelity Land Trust With Foreclosure Action
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Tablalock

    We deeded our home note over to Fidelity for “cash for keys”. After broken promises by B of A we are facing foreclosure. If we win the litigation Fidelity gets the home if we lose they quit claim it back to us. No money has been paid to Fidelity.
    Decided to let Fidelity to fight it out with B of A for a price….

  • http://GetOutOfDebt.org Steve Rhode

    John Wright published a post today that mentioned Fidelity Land Trust. See http://piggybankblog.com/2012/08/05/what-might-have-some-of-the-real-estate-brokers-done-once-the-housing-market-crashed/

  • Fauditor7

    A foreclosure action brought by New
    York Bank of Mellon as Trustee was dismissed today as a result of a motion to
    dismiss filed by Attorney Howard Feinmel, Esq. of the Delta Law
    Firm.
     The motion to dismiss was founded upon a Final Judgment
    quieting title to the property, canceling the mortgage and voiding the
    assignment entered in November 2011.
     

    Res Judicata apparently is viable when a Mortgage has
    been cancelled and assignment voided by Default. This is a tremendous victory
    for Fidelity Land Trust Attorney.
     

    • Felisam

      I have been researching about this company which has approached me for few month now. My question still is, is this a real company or not?

      I a a widow trying to save my home, but Chase has refuse to modify my loan despite my new “status”

      Would you work witH Florida HMR?

      Please I really need and advise!

      Felisa P.

      • FAUDITORS7

        OK I think you answered your own question, Chase won’t help you and you are about to lose your home to foreclosure, you need options, your options are short sale or sue your lender for violations, are there violations on your title? if so, go after your lender.

  • Richard Zaretsky

    Fidelity is only one of several snake oil promoters of the Land Trust to Save Your House scheme.  There are also variations of the same concept, but without the Land Trust and those are even more outrageous – such as the upcoming criminal complaint to be filed against Nationwide Investment which operated in South Florida and up to Orlando (you can say you heard it from me)…

    Essentially, schemes that have as the resolution of the scheme a borrower paying money to a stranger to the original ownership of the home or the real lender, or have a transfer of title to a trust or another entity (as in Fidelity or Nationwide), are as far as I have seen – completely bogus. In the Nationwide scheme the home owner actually pays rent to Nationwide after transfering the title to the home to Nationwide.  Sometimes Nationwide moved the homeowner out of their home and into a substitute home saying they were renting to own. The problem is that Nationwide did not really own the other home.

    Worse, we are not talking about small “fees”.  A typical Nationwide fee is only $1500.  But the scheme includes a downpayment on the rent to own option (including renting to own the home the borrower already owns!) of tens of thousands of dollars.  Add to that the “rent” and you are getting to $60,000 or more before the dupped homeowner realizes the scam into which he or she has fallen.

    Worse still is that to get a legitimate loan modification or to do a short sale – either of which the homeowner may be legitimately entitled from the lender, the homeowner must get the title to the home back – no small feat!  We are undertaking quiet title actions as part of the existing foreclosure filing or as an independent action so that the homeowner gets the title back and can then do a loan modification or short sale with the legitimate lender.  But that is more time and expense for the homeowner.

    There are legitimate uses of a land trust and that is why there is a Florida statute on the methodology.  See an experienced attorney to see if a land trust is the proper vehicle for what you what to accomplish.

    Best bet – if it sounds too good to be true, it is always a scam.

    Richard P. Zaretsky, Esq.
    Richard P. Zaretsky P.A.
    Florida Board Certified Real Estate Attorney
    1655 Palm Beach Lakes Blvd., Suite 900
    West Palm Beach, Florida, 33401
    Telephone: 1 561 689 6660
    Fax:          1 561
    683 1559
    Email:  [email protected]

    URL: http://www.florida-counsel.com 
    - see our blog on short sales, foreclosure and loan mods

    • MarySnow

      Mr. Zaretsky, am I am sure you are that legitimate attorney in a white horse that will save my home for ……lets say $20k and never answer my call after I pay you? 

    • Fidelity Land Trust

      Richard Zaretsky
      It is ignorance to speak about something without having all the facts or complete knowledge: 

      First of all Fidelity purchases homes subject to existing mortgages. I would say that is a perfect example of putting your money where your mouth is 

      Fidelity can show something no other Law Firm or company can  60 successful cases or  Final Judgments quieting title , canceling mortgage and voiding assignments . Anytime you want to get a real education and have tangible data rather than writing blogs  based on rumors, and hearsay I will gladly give you a lesson. 

      HERE ARE THE FACTS:
      Fidelity does not charge rent to anyone  Fidelity does not sell homes back to previous homeowners  Fidelity has not charged a single person a second payment yet so your theory of stalling to collect rent is completely without merit  Fidelity does not tell anyone a quiet title case takes 1-2 years     all lawsuits are different but we hope to have finality in 90 days  Fidelity actions are nothing close to “Adverse Possession”  This is actually funny how you could compare the 2 but then again all your material has no factual basis 
      Fidelity offers real answers to the enforceability of a mortgage and puts the banks on the defense rather than allowing the banks to control litigation.

      There are few options and none of which make sense
      Loan Modification :  National Statistics show a 99% failure rate  Foreclosure Defense:  Attorneys take a case knowing it is meritless, charge monthly and do nothing. Its not hard to defend a bank that is not pushing a case forward. The end result is always the same , Homeowner being removed from their home”
      Fidelity brings a lawsuit based on Merits to the banks front door! 

      So if you want an education This is a formal invite , If you want to keep blogging lies and rumors then you are the scammer

    • Fauditors7

      Richard Zaretsky

      I have a few questions for you

      How many people have you represented in foreclosure?
      How Many of those people lost their home? 
      How many Final Judgments of quiet title have you obtained?
      How many satisfactions of mortgage have you obtained ?
      How many permanent and successful loan modifications have you obtained? 

      The attorneys retained by Fidelity have obtained over 50 Final Judgments and successfully had foreclosure actions dismissed with prejudice.  

      How do you speak intelligently about anything you don’t have the facts on? 

      Fidelity does charge rent
      Fidelity does not sell properties back to homeowners or promise to do so 
      Fidelity attorneys have a proven track record, DO YOU ????

      The only scheme or scam is the thousands of Florida attorneys with no ethics collecting monthly fees as they stall to collect more fees! The only contact most of these attorneys have with their client is when a payment is missed

      So before you write on a blog you should make sure you have facts and not write blogs based rumors or hearsay, you are an attorney remember!!  Do you have ETHICS? 

      Feel free to call or  email Fidelity and get an education and the proof of all above statements 

      • http://GetOutOfDebt.org Steve Rhode

        You said, “Fidelity does charge rent
        Fidelity does not sell properties back to homeowners or promise to do so ”

        So homeowners don’t get their properties back after the process is complete?

        In the case here that you mentioned with your June 19 comment, in Levy County I see a final judgment entered on 11-22-2011 for the benefit of Levy County partners, a mortgage from Growth Capital Partners at the same address as Fidelity Land Trust, on 11-29-2011, and a quit claim deed from Levy County Partners to Fidelity Land Trust on 2-21-2012.

        According to the State of Florida website, Growth Capital Partners is not a registered or licensed Loan Originator, Broker or Lender. Do you have a license number for them for me to check since you now have me on this wild goose chase checking everything instead of just forwarding me the complaint on the Levy County as I requested.

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