In the late summer of 2008, many working families watched their livelihood disappear and the American dream slip away. The harsh realities of the sub-prime mortgage crisis left countless facing home foreclosure and eviction. Shockingly two veteran Real Estate investors in Baltimore, Maryland have sought to make profit from the misery of countless local households.
Prosecutors in Maryland have alleged a conspiracy by real estate investors to rig bids and stifle competition at sales auctions. Two of the chief organizers have supposedly made as much as 10 million dollars from the fees paid by homeowners to avoid foreclosure.
According to the Huffington Post, local Governments in Maryland sell investors the right to collect unpaid taxes and fees, for a couple hundred dollars or less; allowing holders to take the property of those who fail to make payment. Abdicating the power to collect such fees has allowed reward of profit to drive the maintenance of these basic responsibilities. Baltimore County lawyer Harvey M. Nusbaum and investment partner Jack W. Stollof, took advantage of this opportunity to recklessly raise fees and skim excessive (and illegal) earnings off the top of their collections. This “Crime of Greed”, cheated local governments out of revenue and enriched these criminals.
According to the District Court of Baltimore, these men used the court system to threaten home owners with the seizure of their property unless they paid interest, legal fees and other costs which often totaled more than ten times the original debt.
Mr. Nusbaum, a former IRS agent, filed some 6,000 lawsuits over the six-year period to foreclose on the property on which there were outstanding fees, from which he yielded an estimated $6 million in legal costs. In one case, an 80-year-old widow with a $369.86 outstanding water bill sold in the 2005 Baltimore tax sale was billed more than $5,000, according to court records.
Both of these men have pleaded guilty to felony charges. Nusbaum has been sentenced to a year and a day in federal prison and an 800,000 dollar fine. Mr. Stollof awaits sentencing.
Here at Perenich The Law Firm, we understand the difficulties posed by foreclosure and the problems confronting many families during this time of economic stress. The current recession has hit the Tampa Bay area hard and many look for a trustworthy firm to represent their needs in the court of law and we are confident in the ability of our attorneys to provide exactly that.