Audio Homeowners victimized by foreclosure rescue scam (story audio) Photos Denise Brantley tries to reclaim her east St. Paul house Hendrie Grant's office Denise Brantley and supporters View full slideshow (4 images) Resources Minnesota attorney general's foreclosure avoidance tips ACORN Consumer Federation of America predatory lending avoidance tips Your Voice Join the conversation with other MPR listeners in the News Forum.

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Homeowners victimized by foreclosure rescue scam
by Dan Olson, Minnesota Public Radio
October 22, 2003

Denise Brantley tries to reclaim her east St. Paul house (MPR photo/Dan Olson)

A St. Paul real estate investor is accused by his customers of duping them into selling their homes and taking their equity. Minnesota officials want a judge to order Hendrie Grant to turn over documents from transactions. Several homeowners facing foreclosure say Grant rushed them through a complicated and confusing real estate deal they thought would help them save their homes. Instead, they discovered they'd sold their house to Grant and had agreed to a lease-back deal with much higher monthly payments. His accusers say the deals fit the pattern of a foreclosure rescue scam. It's a little-known form of predatory lending that appears to be spreading.

St. Paul, Minn. — Denise Brantley owned a modest house in an east St. Paul neighborhood for five years. Two years ago she became ill and fell behind on her monthly mortgage payments of $607. She was notified she was about to lose her home to foreclosure.

"If you're already in a stressful situation, just the word 'sheriff's sale' is enough to scare you," she says.

	Hendrie Grant's office

Brantley lept at an offer from St. Paul real estate investor Hendrie Grant.

"Once you're backed in a corner and one of these guys comes along, 'Oh we can save your house, you can stay in your house.' But they don't tell you about the hidden charges, they don't tell you a lot about the contracts, they rush you through on signing the papers. That's the whole gist of the thing is they rush you through, so you cannot read anything and recognize the problem," Brantley says.

By one estimate, Denise Brantley's home had accumulated $50,000 in equity, the increase in value over its purchase price. Only after she closed the deal with Hendrie Grant, Brantley says, did she realize she had signed away ownership of her home and he'd taken her equity.

The deal she signed included a lease-back arrangement allowing her to stay. It also included an option for Brantley to repurchase the house. But Grant's deal used about half of the equity for a down payment on the repurchase agreement. The rest, about $20,000, was eaten up in what state officials call outrageous junk fees. Worse, Brantley's new monthly lease payment was $300 more than the monthly mortgage payment that drove her into foreclosure.

	Denise Brantley and supporters

Within two months, Brantley fell behind on her lease payments, and Hendrie Grant had her evicted.

Brantley sought help from ACORN, the Association of Community Organizations for Reform Now. ACORN spokesman Jordan Ash says foreclosure rescue scams are part of an ever growing array of predatory lending and equity stripping schemes.

"What makes it particularly outrageous is that the pitch from the beginning is, 'We're going to save your house.' And the goal all along is, 'We're going to take your house," Ash says.

Hendrie Grant declined to be interviewed. He's a former agent with two large Twin Cities real estate companies. His first run-in with state officials was 10 years ago. He was fined and censured for having someone sign a real estate document using another person's name.

The attorney for his company, Grant Holdings, is John Westrick. Westrick says Grant's deals are legal. He says Brantley and the others knew what they were agreeing to.

	Denise's house

"People say, 'We were rushed through a closing and we didn't know we were deeding the property.' And I don't understand how that can be, because there were signed purchase agreements, there were signed transaction agreements, there are signed deeds," Westrick says.

"Indeed, there is a transaction agreement, and all the ones that I have seen so far that very clearly spells out, 'I am selling the house, I will be leasing it back, I will have an option to buy,'" says Westrick.

The attorney general's office wants to see those agreements. A month ago, the office filed a civil action to examine them. Westrick says the state's request is too broad and he refused to cooperate. Now, the state is seeking a court order to compel Grant to turn over the papers.

Prentiss Cox, the manager of the consumer enforcement division in the attorney general's office, says in the past three years Grant Holding has requested 95 evictions or related actions in Ramsey and Hennepin counties. By one estimate, Grant's company has earned $2 million from those and other questionable real estate deals.

Cox says high home values, combined with a high foreclosure rate, provide a fertile environment for real estate scams. He says the number of Minnesota homeowners duped into foreclosure rescue scams is growing, and so is the number of unscrupulous investors.

People say, 'We were rushed through a closing and we didn't know we were deeding the property.' And I don't understand how that can be, because there were signed purchase agreements, there were signed transaction agreements, there are signed deeds. - John Westrick, attorney for Grant Holdings

"I suspect the number of homeowners is in the thousands over a period of a couple of years," Cox says. "The number of people engaged in this activity is surprisingly large too. I suspect it may number more than a dozen."

Mortgage foreclosure rescue scams are affecting homeowners in other states as well. Officials in Colorado began hearing complaints from dozens of residents two years ago. Colorado Assistant Attorney General Garth Lucero, the head of that state's consumer protection division, says the deals fit a pattern. Homeowners out of work or with health problems and facing foreclosure leapt at a chance to save their homes.

"In the case that we prosecuted, the mortgage companies took money from consumers and promised they'd rebuild their credit and get them back on their feet financially," Lucero says. "Without making proper disclosure of all their rights and the rights to cancel the contract and so on and so forth."

The Colorado attorney general filed a civil suit on behalf of more than 100 homeowners, 70 of them won their homes back. There was a cash settlement of $1.1 million. Customers had been bilked out of an estimated $15 million.

Lucero says the real estate investor and his family members named in the lawsuit quit their Colorado activities and moved out of state.

Lucero says it's not easy for watchdogs to detect foreclosure rescue scammers. They often do business by word of mouth. The warning signs for consumers, he says, are the unconventional means they use to rush deals through.

"They'll use quit claim deeds, they won't talk about fair market value of the house or the equity the homeowner may have, they won't use traditional closings through title insurance companies," Lucero says. "They'll do everything quickly and one-on-one with the homeowner, typically without notaries present. copies of documents won't be given to the homeowner. And all these signs of a real lack of legitimate real estate transactions are typically present."

Earlier this month, Denise Brantley took back the house she says Hendrie Grant tricked her into selling to him. The next day, Grant Holding called St. Paul police and had Brantley removed and arrested. She was charged with trespass and released from jail the same day.

Prentiss Cox says the consumer enforcement division of the Minnesota Attorney General's office will soon file additional actions against other alleged perpetrators of foreclosure rescue scams.

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