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People Still Falling for Land Trust Mortgage Rescue Scam

The one thing you have to admit about a scam is once it works and extracts money from consumers, it’s got some legs and has morphed and continued on longer than I expected it to.

As part of the continued slow descent into the black pit of “Why?” more information is coming out about how unhappy people are with the fake land trust efforts in Florida.

In the land trust con, consumers were persuaded to sign over the title to their property and we sold a story about how they could get their mortgage eliminated or reduced. Of course this approach came with big risk and high fees for consumer participants.

Recently the Florida Attorney General sued Whitestone Capital Trust and Nicholas Torgerson which led back to Paul Gallenbeck and Fidelity Land Trust in a way.

One unhappy Florida consumer, Burgess Porter, is suing Whitestone Capital Trust. Porter is represented by local legal aid. Public documentation in his case explains the sales approach and says:

“Sometime in late 2012, Mr. Porter received an unsolicited communication from Carefree Properties, Inc. (“Carefree Properties”) regarding Mr. Porter’s home mortgage. The amount owed on Mr. Porter’s current mortgage is currently well above the fair market value of the property. Mr. Tony Brown, of Carefree Properties, stated that if Mr. Porter were to pay $160.00 that he would be able to give a legal assessment of Mr. Porter mortgage. Further, Mr. Brown contended that should Mr. Porter’s mortgage qualify for its program, Mr. Porter would be referred to its Florida affiliate, Whitestone Capital Trust, LLC (“Whitestone Capital Trust”), who would then enter Mr. Porter’s property into a land trust. It was explained that through the assistance of an attorney retained by Whitestone Capital Trust the trust would be able to void Mr. Porter’s existing mortgage on Mr. Porter’s property, thereby eliminating the disparity between what Mr. Porter owed on their property and what the fair market value of the property was.

After a few phone exchanges, Mr. Brown then contacted Mr. Porter by email, giving them Carefree Properties’ business information, realtor license information, and cited recent Florida court cases in which Mr. Brown contended demonstrated the legality and the overall effectiveness of the land trust scheme.

Mr. Porter followed-up on the convincing emails sent by Carefree Properties by doing his due diligence with the information Mr. Brown provided. Mr. Porter checked the Better Business Bureau for any consumer complaints filed against Carefree Properties and found none. Shortly thereafter, Mr. Porter paid Carefree Properties $169.00 dollars to determine whether Mr. Porter would qualify for the assistance of its affiliate.

On December 5, 2012, Carefree Properties sent Mr. Porter the results of its investigation and Mr. Porter was given two options, he could: under “Option A”, get a new mortgage to be issued and owned by its affiliate, Whitestone Capital Trust, LLC (“Whitestone Capital Trust”), for $140,000.00 dollars and have his old mortgage “voided”, thereby saving Mr. Porter $213,800,00; or under “Option B”, Mr. Porter would receive $2,800.00 from his current mortgage company in a cash for keys settlement.

As stated in the above, and like many Floridians, Mr. Porter is upside-down on his mortgage and after reviewing the options provided by Carefree Properties, Mr. Porter decided to proceed with “Option A” and save $213,000.

In order to proceed with “Option A”, Mr. Porter was told by Mr, Brown, of Carefree Properties, that he would need to quitclaim his deed to his property to Whitestone Capital Trust and pay the sum of $4,000.00 at closing plus a monthly payment of $944.44 for 144 months thereafter.

Upon the initial payment of the $4,000.00 and the signing of the new mortgage, Mr. Porter was assured that the Whitestone Capital Trust’s land trust would retain an attorney who would immediately act to have Mr. Porter’s mortgage voided. Additionally, the Promissory Note that Mr. Porter signed stated that Mr. Porter was to pay to Whitestone Capital St Trust, LLC, which is an unregistered entity in the State of Florida, but pursuant to the Promissory Note, is doing business in the same office and suite number as Whitestone Capital Trust.

Further, Mr. Porter was also advised to stop making payments to their current mortgage company. Shortly thereafter, Mr. Porter started receiving calls from his mortgage company about his missing monthly payments. Mr. Porter called Whitestone Capital Trust and inquired as to why he was still receiving notices from what he believed to be his former mortgage company. During this time, Mr. Porter paid the first $944.44 installment under his new mortgage with Whitestone Capital Trust, LLC.

When Mr. Porter called in again, he was told that the company was investigating his file and would file a lawsuit against Mr. Porter’s soon to be former mortgagee in the coming weeks.

Mr. Porter started to get suspicious when his mortgage company continued to contact him regarding his missing payments. After receiving several calls and letters from his mortgage company, Mr. Porter then decided to drive down to Whitestone Capital Trust’s office in Coral Springs, Florida, and speak with his case manager, Mr. Nicholas R. Torgerson. When he met Mr. Torgerson, it was explained to Mr. Porter that the reason why he was still getting calls from his mortgage company was because Whitestone Capital Trust, LLC had too many clients and their file had gotten lost in the shuffle. Mr. Torgerson then informed Mr. Porter that the name of the land trust had changed to Private Capital Trust, LLC, and if he signed with the new trust that had been created, that they would be able to get the ball going on voiding Mr. Potter’s original mortgage.

Mr. Torgerson stated that the terms and conditions would be the same ones that were given under the Whitestone Capital Trust agreement with the exception that Mr. Porter would now have to convey a General Warranty Deed to Private Capital Trust. Mr, Porter, now very suspicious, told Mr. Torgerson that he would take the general warranty deed and would think it over.

Shortly thereafter, on February 28, 2013, Mr. Porter sent Mr. Torgerson a demand for the return of all monies paid to Whitestone Capital Trust, LLC. Whitestone Capital Trust, LLC never responded to Mr. Porter nor refunded the monies he paid to it.

In sum, Mr. Porter is out a total of $5,113,00; $4,944.00 of which was paid to Whitestone Capital Trust, and $169.00 dollars of which was paid to Carefree Properties in a land trust scheme.

After some doing, Mr. Porter was able to contact and work out a payment plan with his mortgagee to payoff his arrearage.” – Source

If a Land Trust in Florida Contacts You

These land trust companies are falling like dominoes and consumers are signing over their homes in hopes they are going to get some magical benefit by erasing part of their mortgage. But like many other cons, this one seems plausible and that’s why desperate people fall for the scam.

Till some seller participants receive some jail time for this sort of enterprise, more people are going to be unwisely signing away their homes for the promise of magic pixy dust.

If someone shows up at your house to sell you one of these magic Florida land trust solutions, tell them to get the hell out.

People Still Falling for Land Trust Mortgage Rescue Scam
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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.
  • ed

    These guys have some balls. Now this guy Nick Torgerson , who clearly worked for Fidelity Land Trust then opened his Whitestone Capital Trust and Become The Bank LLC to divert deals into them that Fidelity could no longer do is putting out PR about hiring some high powered attorney to defend him against the Fl AG in what is a mockery of the judicial system. Take a look at this article and check out (and post) the article in the Palm Beach Post about this moron, scam artist who is in denial about what the words fraud and scam mean.
    http://www.marketwatch.com/story/whitestone-capital-trust-llc-become-the-bank-llc-and-nicholas-torgerson-retain-pike-lustig-llp-turnpike-lawtm-to-face-off-with-the-attorney-generals-office-2013-08-23

  • ed

    Meanwhile scumbags like Torgerson, Diodato, Cherry and Gallenbeck have collected hundreds of thousands of dollars and walk around Palm Beach as if they were made of money and above the law. All at the expense of honest, hard working people looking for a solution to their financial problems. What do these people get in return ? They are put in a worse financial position and will never see that money again. Money that these scumbags are using to live it up, buying cars, clothes, jewelry, taking lavish trips. All off the backs of these poor consumers. They spend money like this scam will never end yet we all know the outcome of this story. It is like every one detailed on CNBC’s American Greed:Scams. They will end up broke and in legal trouble and lament about how they regret what they have done. The question is, who will be the first to roll over on the others now that so many are implicated. My money is on Larry Diodato as he has a history of being a rat. Read his deposition for further proof. He is a 275lb cunt who talks big but withers under questioning. Right Larry ? You cannot hide from your past scumbag.

    • ed

      Apparently the new entry in the Fidelity Land Trust AG lawsuit, Mathew Krac of Carefree Properties has had his share of charges in Fl as well, having been charged for a timeshare scam with Fee Recovery Services. How do these pieces of shit find each other, on Craigslist ? Are there monthly meetings where they share ideas about how to fuck people ? It is unreal. Florida is a cesspool filled with guys like this

      • ed

        Two more land trusts bite the dust yesterday. Looks like Robert Vitale has more legal issues and it is also evident that Ed Cherry and Larry Diodato orchestrated all of these bogus firms..

        Florida attorney general shuts down two more land trusts, continuing year-long pursuit

        Posted: 6:28 p.m. Monday, Aug. 26, 2013

        By Kimberly Miller – Palm Beach Post Staff Writer

        The Florida attorney general’s office shut down two more South Florida land trusts Monday, continuing a yearlong pursuit to stop multiple intertwined firms from selling a complex foreclosure rescue scheme to vulnerable homeowners.

        A Broward County judge’s order Monday temporarily froze the operations and assets of the Lauderdale by the Sea-based firms of Cambridge Land Trust and Hartford Land Trust. The company’s owner, Robert Vitale, 42, is also named in the complaint.

        The attorney general’s land trust investigations have so far ensnared 11 people, seven trusts and eight affiliated companies, all of which are named in lawsuits first filed in September 2012. The largest firm, Fidelity Land Trust, which had an office in Boca Raton, had an estimated 300 properties statewide at one point.

        According to the complaints, the trusts hired boiler room-type call centers to solicit homeowners with underwater mortgages or who are in foreclosure. The borrowers allegedly paid thousands of dollars in upfront fees and signed over the deeds to their homes to the trusts under the belief the company could get their mortgage canceled.

        A Davie homeowner complained to the state in October that he gave $3,700 to Cambridge Land Trust to save his home by filing a quiet title lawsuit to remove the bank’s claim on the home. In many cases, the land trusts also ask homeowners to set up a new “mortgage” with payments going to the trust, according to the state.

        “Needless to say, I’m writing you today because Robert Vitale never did file this lawsuit,” homeowner Joseph Bean said. “To make matters worse, Robert (Vitale) keeps calling me asking for monthly mortgage payments that include taxes and insurance that need to be paid to his trust.”

        The suit against Cambridge, Hartford and Vitale says the companies cannot deliver the services they pitch and are “deceptive, misleading and/or unconscionable, because Cambridge’s scheme does not bring about the cancellation of a homeowner’s mortgage.”

        Vitale did not return a message left at his office Monday, but said in a July interview with The Palm Beach Post that he closed his land trust companies when he realized the business model wasn’t viable. He said he was signing the deeds he had back to the homeowners.

        Royal Palm Beach-based foreclosure defense attorney Tom Ice was one of the first to raise concerns about the trusts after a client signed his deed over to Fidelity.

        “These scams prey upon those that already have financial difficulties and directs them away from resources that could help them,” Ice said Monday. “Worse, because they involve filing frivolous motions, it denigrates the legal profession and creates even more confusion in the courts.”

        County and federal judges have denounced the land trusts’ legal theories, saying their actions to cancel a mortgage have “absolutely no chance of success.”

        “A state judge has told (Fidelity) that its legal theory is meritless; a federal judge has told Fidelity its legal theory is frivolous; and the Florida Attorney General has obtained injunctive relief against plaintiff,” wrote federal District Judge Roy Dalton in a Dec. 27 order. “Yet even in its objection, plaintiff clings to the notion that its claims have merit. They do not.”

        This month, the state sued Whitestone Capital Trust, Become the Bank LLC and Lake Worth homeowner Nicholas Torgerson. Torgerson has hired West Palm Beach-based attorney Michael Pike, who in a news release last week said he will challenge the state.

        “Whitestone Capital Trust and Torgerson have attempted to distinguish their services from other land trust models and establish a legitimate and viable service for homeowners,” the release said.

        Court filings show the land trusts are connected and trace the business model to Plantation resident Edward Cherry, who was barred in a 2009 consent judgment by the attorney general from dealing in consumer debt-settlement services.

        Cherry shared the land trust plan with Fidelity Land Trust operator Paul Gellenbeck in 2011, according to a deposition. Gellenbeck and Torgerson worked together at Fidelity, according to emails between the two in which Torgerson calls himself Fidelity’s vice president. And Vitale said Gellenbeck gave him the land trust business model.

        Vitale is facing other legal trouble. He pleaded guilty last month to criminal charges that he obstructed justice and lied to investigators from the U.S Securities and Exchange Commission. His sentencing is scheduled for Sept. 9.

      • http://GetOutOfDebt.org/ Steve Rhode

        If it wasn’t all so sadly true it would be comical.

    • http://GetOutOfDebt.org/ Steve Rhode

      Coincidence? Just posted consumer complaint about a company called Mizner Grande, a law firm, which is located at the same address as Fidelity. They also offer land trust services. See http://getoutofdebt.org/61583/mizner-grande-consumer-complaint-september-17-2013

      • ed

        Did you think a little thing like an AG injunction would stop these pricks ? They will not stop until they are all charged criminally. Unreal.

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