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Sale, or foregone foreclosure?

They were behind on their mortgage payments. He said he was offering them a way out of trouble. But then he evicted them and made big profits. And they say that was his plan all along.

Published May 14, 2006

Mary Ella Savage sat down at her dining room table one December day and sold her St. Petersburg home to a stranger for the price of a movie ticket.

She was desperate, just like the others.

Barbara Keifer of Riverview. Tracy Buck of Safety Harbor. Robyn Renner of Lutz.

All were single women trying to save their homes from foreclosure when Leroy Luke Heath came calling. He told the women he knew a good Christian - a Mr. Wilson - who could help them.

Thinking they were grabbing a financial lifeline, they all signed over their homes to Richard G. Wilson and became his tenant. They all eventually failed to meet his rent demands.

Wilson filed evictions and sold the homes of Savage, Keifer and Buck, pocketing what was left after paying mortgage balances and other expenses. He's trying to kick out Renner, but her sister, a lawyer, has gone to court to stop him.

A St. Petersburg Times investigation found that Heath and Wilson have acquired and sold numerous homes facing foreclosure throughout the Tampa Bay area, leaving former owners bitter and claiming they were duped.

The two men say they offer bailouts to homeowners struggling with mortgage payments. They say that if a homeowner can't meet their terms, it's no fault of theirs.

The state Attorney General's Office questions that. It's investigating Wilson and Heath for possible violations of deceptive trade laws.

But the state's inquiry is a single hook when a net may be needed. As many as 300 cold callers, consultants and investors in Tampa Bay are looking to turn pending foreclosures into profit, say those in the business. Hundreds more operate statewide.

These rescuers approach stressed homeowners when money is tightest and lenders are closing in. They offer to pay off the delinquent mortgage payments, allowing the homeowners to stay put. Relieved, they sign paperwork - often without realizing they have just sold their homes.

Deed in hand, the investor can evict the former owner, then sell the home for profit.

Other states have extended protections to those in foreclosure, but in Florida, special interest lobbies have stopped similar measures from becoming law.

"Florida has yet to realize the depths of our foreclosure problem," said April Charney, a Jacksonville lawyer known statewide for pursuing scammers. "The bottom line is that other states have taken steps to stop these home muggers, and we have not."


Three years ago, Mary Savage was in dire financial straits. Divorced after 24 years of marriage, Savage was eight months behind on her mortgage and earning barely enough as a nurse's aide to keep the lights on.

She feared the home with the huge oak out front that she planned to leave her daughter was slipping from her grasp.

"I didn't know what to do," Savage, now 52, remembers. "My whole world flashed before me, coming down. It was the only place I had to go."

Heath left his flier on her door, then showed up a few days later, telling her he knew her pain. He had been in foreclosure himself. She admits now that she didn't fully understand the papers she signed.

One deeded her home on 47th Street S to Wilson for $10, a minimum payment for quit-claim property transfers. She also signed a lease to rent from Wilson for $461 a month, even though she hadn't been able to make mortgage payments of $316.

She violated her lease when she fell two months behind. One night, she came home from Latter Day Deliverance Church to find her locks had been changed.

When her home had gone into foreclosure 16 months earlier, the principal balance on her mortgage was $22,755. Now, with Savage out, Wilson sold the home for $61,500.

"I wish I had never met those men," Savage said.

Foreclosure investors target homes like Savage's - ones with substantial equity, the difference between what is owed on a mortgage and what the home can be sold for.

Equity has built fast in recent years in the Tampa Bay area as property values soared, creating a foreclosure investment market "ripe for abuse," said Gary Moore, a Clearwater lawyer with Gulf Coast Legal Services.

"It's like a feeding frenzy," he said.

Across Florida, legal aid lawyers report an explosion of complaints from homeowners in foreclosure who said they lost title to their homes to investors through suspect bailout offers.

Attractive targets are easily identified. Mortgage lenders file public notices of intent to foreclose at county courthouses. A few businesses comb through the notices and sell lists of names and addresses.

Foreclosure Disclosure of Tampa is one. Owner Tamra Wondrow said most of her 150 clients offer solid financial advice or a fair purchase price. But some are not aboveboard.

"There are a lot of greedy people in this business," Wondrow said. "And they are trying to take short cuts. In the end, it's all about the money."


Tracy Buck was disabled and unable to work when her Safety Harbor home fell into foreclosure. One rainy September day in 2002, Heath pulled up in a white BMW and convinced Buck that he and a fellow Christian named Wilson could help.

Buck and Heath prayed together, Buck recalls, and Heath outlined a plan.

She understood it this way: Wilson would pay off her missed mortgage payments and a lien would be placed on her home for two years. She could stay there and pay Wilson $756 a month rent, which she hoped a live-in boyfriend could provide. Wilson, in turn would pay her monthly mortgage of $611.

At the end of two years, Buck believed, she had the option of paying off the lien, ending her agreement with Wilson.

But Buck had it wrong. Among the papers she signed was a quit-claim deed that transferred ownership of her home to Wilson. Her two-year lease with Wilson did have a repurchase option, but it was for $70,250 - $17,485 more than the balance on the mortgage.

Buck, now 46, said she would not have signed the papers had she understood.

"I gave away my family home," she said, crying. "I grew up there. My daughter grew up there. Could you imagine? You think your parents are looking down at you from heaven, saying, 'How stupid could you be?' "

Deals like the one Buck signed involving deed transfers and lease-to- repurchase agreements are designed to fail, according to consumer advocates. The goal for many investors is to evict, resell and walk away with the equity.

After about a year of renting, Buck was behind and Wilson began an eviction. With help from Gulf Coast Legal Services, Buck filed a counterclaim saying she had been defrauded. But later she and Wilson agreed in writing that she would dismiss the case and get an unspecified share of her home's sale price.

Wilson fixed up the house on S Fourth Street and sold it two months ago for $260,000. Records indicate that in 2002, when he paid her lender to stop the foreclosure, only $52,765 remained on the mortgage.

Shortly before the sale, Buck said, Wilson asked if she had spoken with a reporter. She said when she told him she had, he became angry and declared their agreement off.

"He was sweet as punch in the beginning and screaming at the top of his lungs by the end," said Buck, who said she has yet to receive any money from Wilson.

Barbara Keifer of Riverview said she understood the papers Heath had her sign. Her mistake was believing two promises she said Wilson made.

He vowed he wouldn't sell her home, Keifer said, or file the quit-claim deed she had signed unless she violated the rental agreement.

But the deed was recorded six days after Keifer signed it. At that point, Wilson was the legal owner of her three-bedroom home on Cornell Drive, which she always planned to be a legacy to her two sons.

Four months into the lease, Wilson took out an $81,922 second mortgage on the home. Two months later, he evicted Keifer, a nurse, for not paying rent. She had agreed to pay $794 monthly even though she hadn't managed a $480 mortgage payment.

In January 2002, 11 months after Keifer signed the deed transfer, Wilson sold Keifer's home for $110,000 - $29,000 more than she paid for it in 1999.

Today, Keifer, 61, whose husband died a decade ago, rents another house in Riverview and doubts she will ever own property again.

"It's been devastating," said the grandmother of six. "I lost my home. My money is totally gone. My children's inheritance is gone. I just think that they should be ashamed of themselves."


Heath, 49, has worked Tampa Bay's foreclosure market for more than a decade. He first sends owners a flier offering a bailout, but follows up on the properties with most profit potential.

"And then the ones that have the equity, great, I go to the doors personally," he said when deposed in a 2004 case involving Wilson's attempt to evict a Clearwater homeowner.

He calculates the number of mortgage payments needed to satisfy the lender, then prepares the documents needed by an investor, such as a deed transfer and lease agreement.

He worked with a stable of 16 investors in 2004 who paid him a fee of about $2,500 for finding a property. He identified one of those as Wilson.

In a brief telephone conversation with the Times, Heath defended Wilson, saying homeowners who are evicted simply failed to solve whatever problems drove them into foreclosure in the first place. What's offered is an opportunity, he said, that troubled homeowners may be unable to seize.

"I'm here to tell you there is no fraud involved," Heath said. "We have morals, values and we have character."

Heath later canceled two scheduled face-to-face interviews for this story. He did not respond to e-mail or accept certified mail containing written questions sent to his only known bay area address, a post office box in Apollo Beach.

Wilson, 54, also refused interview requests, but selectively answered written questions mailed by the Times.

An agent for Signature Realty Associates of Valrico, Wilson said those he has evicted or sought to evict tell just part of the story.

He frequently gave homeowners options to buy back their homes, he said, even extending offers to some who had violated rental agreements.

Asked how many owners-turned-tenants had managed to buy back their homes, Wilson wrote in response: "Why ask this question unless you are wanting, ignoring the facts, to slant the story?"

Both Wilson and Heath point to the letter of intent they have homeowners sign. It states that the homeowner is selling their property to Wilson. It also states that it's not Wilson's intent to evict the original owner.

But Charney, the lawyer who has pursued foreclosure fraud in Florida for 12 years, contends the letter is designed to protect Wilson.

It easily could confuse a homeowner, who is referred to as seller, tenant and potential buyer all in the space of two sentences, Charney said.

"It's just totally bogus from one end to the other," she said. Investors such as Wilson "already see themselves in front of a judge saying, 'I did not mislead this person.' "

Wilson and Heath have transferred foreclosure properties in Pinellas, Hillsborough, Pasco, Hernando and Polk counties. Heath has also worked in Palm Beach County.

The two move properties through a complex network of company names and trusts, but tracing back deed transfers to Wilson's known companies yields stories from other former homeowners who echoed the accounts of Savage, Buck and Keifer.

Cydalia Harris of Clearwater, Nadine McNew of Tampa, JoAnn Schaffer of Lakeland. Each signed over her home to Wilson after being contacted by Heath.

"They took everything that my husband and I had worked for for 20 years," said Schaffer, 54, whose husband, Alan, died 14 months after Wilson sold their home. "When he and I got married, we got married under the oak tree on that property."


Robyn Renner is fortunate. Her sister, a lawyer at a large Tampa firm, is helping battle Wilson for Renner's home.

A single mother of three, Renner was panicked in May 2003: Her lender was foreclosing on the home in Lutz she had lived in for 23 years.

"It's like your stomach just drops," Renner, 45, remembers. "What am I going to do? When you are in a situation like that, you grab at whatever you can."

She found Heath's flier on her front door inviting her to join "thousands of satisfied customers" whose homes he had saved. "Quit procrastinating!" the flier urged.

Renner met Heath at a cafe and heard his pitch: Wilson would cover her delinquent mortgage payments and stop the foreclosure if she agreed to pay him monthly for two years.

Like the others, she says she unwittingly signed papers deeding her home to Wilson.

Six months later, Renner got a call from a stranger - Nadine McNew - who said Heath and Wilson had cheated her. McNew had looked through public records for the names of others who had deeded property to Wilson.

McNew told Renner: You no longer own your home.

"I said, 'What? You are kidding,' " Renner recalls. "And I'm in a state of shock. If I didn't have my house, I don't know what my kids and I would do."

Renner was scared. She continued paying Wilson $760 a month rent. After two years, Wilson increased that payment to $1,100 when, he said, her lender raised her monthly mortgage.

Renner then contacted her sister, Tammy Judge, who advised her to stop paying Wilson. Renner stopped, and he began eviction proceedings.

With her sister's help, Renner filed a counterclaim accusing Heath and Wilson of "deliberately engaging in a fraudulent scheme" to take her home.

"It's an outrage," Judge said. "The writing is on the wall. He is trying to force her out on the street. What he has done is not only unethical but illegal and has to be stopped."

Most homeowners, trapped as Renner was, have no money to pay private attorneys, Charney said. Victims turn to already burdened public interest lawyers.

Proving fraud in court can be tricky, especially without witnesses to verbal exchanges. Charney prefers to settle cases out of court in exchange for getting a client's home returned.

Florida's court system has been slow to recognize the problem, she said. "The biggest difficulty is getting judges to understand the scams because they see so few of them defended."


Had Savage, Keifer, Buck or Renner lived in a number of other states, they would have had an arsenal of legal protections at their disposal and might still own their homes.

Minnesota and Maryland have laws protecting those who deed property to foreclosure investors in the hope they one day will be able to buy back their homes.

Among the safeguards:

n If the owner can't manage a repurchase, the investor must pay the owner at least 80 percent of the home's market value when it's sold.

n Foreclosure investors must document that rents charged in lease-purchase agreements don't exceed 60 percent of a homeowner's income.

n When those rents exceed 60 percent of income, courts can reverse the deed, giving the property back to the struggling homeowner.

By capping investor profits on resales and discouraging investors from writing rent agreements, the Minnesota law aims to curb the most aggressive profiteers, said Prentiss Cox, a University of Minnesota law professor who helped draft it.

"We are taking away the incentive for people acquiring foreclosed homes who think they are going to hit a home run," said Cox. "They can't take away large sums of money from their targets."

California, Missouri and Georgia have safeguards too. Similar bills in Illinois and Colorado await a governor's signature.

In Florida, state Sen. Walter Campbell, a Democratic candidate for attorney general, and Rep. Ari Porth, both from Broward County, proposed legislation last year that, though weaker than the Minnesota model, would have been Florida's first effort to protect those in foreclosure from opportunists.

It went nowhere.

They tried again this year. Their bill would have:

Required consultants and investors to wait 30 days after a foreclosure notice is filed before contacting a struggling homeowner.

Required a warning printed on orange paper be sent to homeowners, advising them to seek legal advice before signing any document offered by someone promising a bailout.

Required that when property in foreclosure is deeded to an investor, the homeowner must sign a notarized document stating the property's value, mortgage balance and amount of equity.

Homeowners not reviewing and signing the document before deeding away their property would have had the right to cancel the sale.

Business interests shot down every protection.

Realtors who dabble in foreclosure investment and subprime lenders who offer mortgage refinancing hated the 30-day waiting period. Lending companies said mailing warning notices would make executing foreclosures more expensive. Title companies said allowing sales to be rescinded would complicate their task of certifying a property's ownership trail.

"The other states, they try to go after the predators," said Alice Vickers, a lawyer with Florida Legal Services in Tallahassee. "We would like to see something more like that in Florida. It's an uphill battle."

Economists predict a rise in foreclosures, driven by the adjustable rate mortgages and other creative lending practices extended during the recent housing boom. The pool of potential victims would grow, making Florida's lack of safeguards glaring.

"It will be the economic equivalent of a crack epidemic," Charney said. "The homeowner is there, desperate for some way to relieve their pain. And these bottom feeders are the pushers."


Times staff writer Jeff Testerman and researcher Carolyn Edds contributed to this report. Will Van Sant can be reached at or 727 445-4166.

Real Property Mortgage Foreclosure Filings by county

1999 2000 2001 2002 2003 2004 2005*

Citrus 392 438 500 584 500 507 259

Hernando 482 565 601 669 687 597 294

Hillsborough 3,696 3,852 4,409 5,402 4,919 4,645 2,015

Pasco 1,407 1,389 1,653 1,914 1,942 1,737 826

Pinellas 3,392 3,408 3,582 4,009 3,771 3,164 1,510

Total 9,369 9,652 10,745 12,578 11,819 10,650 4,904

Source: Office of the State Courts Administrator * Through June

[Last modified May 14, 2006, 05:38:10]

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