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.

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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.

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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.

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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.

Damon Day - Pro Debt Coach

Damon Day - Pro Debt Coach
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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.
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