Sammy Quick appeals from his convictions on two counts of theft, securing writings by deception, mortgage broker prohibition, and receiving stolen property. The charges arose out his participation in a foreclosure rescue scheme. Quick argued that none of the charges were supported by the sufficiency and weight of the evidence, that counsel was ineffective for failing to offer into evidence certain documents, and that the court erred by ordering him to pay restitution. The Appellate Court agreed that the lower court abused its discretion by failing to ensure that the total amount of restitution ordered did not exceed Hill‘s economic loss. The other arguments were denied and Quick‘s conviction stands.
According to the appellate court, a “foreclosure rescue scheme” is a type of fraud that takes advantage of homeowners who have fallen behind on their mortgage payments. It takes several forms, but as alleged in this case, it begins when the fraud perpetrator proposes to assist a homeowner in foreclosure with promises of paying off a delinquent mortgage and helping the homeowner to stay in the property. The homeowner is convinced to transfer the title of the house to an “investor” as collateral and the investor promises that the homeowner can continue to live in the home and repurchase it later upon reestablishing credit. Upon closing, the proceeds are used to pay off the defaulted loan, the homeowner walks away with nothing and the investor pockets the equity. At some point, the homeowner is evicted, losing the house and all equity.
As previously reported by Mortgage Fraud Blog, the victim, Linda Hill, previously lived with her mother. When the mother developed Alzheimer’s Disease, she required nursing care. Unable to pay for the care, the mother transferred title of the house to Hill so that Hill could take out a mortgage on the house and use the proceeds to pay the nursing home. Hill used Quick and the mortgage company he then worked for to arrange the financing. That loan transaction went forward without incident.
In the fall of 2004, Hill entered drug rehabilitation for a 10-month period. During that time, she fell behind on her mortgage payments and the house went into foreclosure. She called Quick and asked him for assistance. He proposed a scheme whereby Hill could save her home and continue to live there, while at the same time working toward reestablishing her credit. He told her they would “take the house out of my name” for a period of one year to 18 months and at the end of that time, the house would “go back into my name and that I would begin to make payments.” During the time that she did not have title to the house, she would pay rent to the person who did own title. Hill testified that at no point did she understand Quick to be proposing that she would sell her house, and she believed that she would get her house back after she rehabilitated her credit.
Quick soon asked Hill to sign some papers, but she did not know what those papers were. She thought that she would be receiving $10,000 to pay off her credit cards as a result of transferring the house, but received nothing. She also testified that she did not enter into any lease or rental agreement as a result of her arrangement with Quick and codefendant Brian Cicerchi, Quick‘s equal partner in First Primary Mortgage Corporation.
Telephone calls from Hill‘s creditors prompted her to contact Quick. She met him at a bank and Quick gave her a check from a title company in the amount of $56,212.58. He asked her to write “pay to the order of” on the check to make it payable to him. He then signed the check, cashed it, and gave her $4,500. Apart from another payment of $3,750, she received no additional funds from her arrangement with Quick.
In November 2005, a letter sent by a mortgage company and addressed to a “Lesley Loney” arrived at Hill‘s house. Hill opened the letter and discovered that the mortgage on her house was $1,300 per month–an amount that far exceeded her monthly net income at the time. She contacted the Better Business Bureau, which in turn contacted the mortgage company. The mortgage company then investigated the loan and discovered that Quick had arranged for the sale of Hill‘s house without her knowledge. An investigator for the mortgage company testified that the loan application had been signed by Loney and indicated that the borrower intended to use the house as a primary residence. The investigator said that it learned that Loney had been collecting rent from Hill, in violation of Loney‘s representation on the loan agreement that the house would be used as her primary residence. The mortgage company considered this fraudulent information because it would have charged a higher interest rate for property used for investment purposes.
Loney pleaded guilty to a misdemeanor count of unauthorized use of a computer or property for her part in the foreclosure rescue scheme. As part of the plea, she agreed to “testify truthfully” against Quick and Cicerchi.
Quick argued on appeal, among other things, that the court erred by ordering both him and Cicerchi to pay restitution to Hill in the amount of $56,212. He maintains that this amounts to a double recovery for Hill and that she offered no evidence of this amount as economic damages.
After reviewing the appeal and Quick‘s argument that the lower court abused its discretion by failing to ensure that the total amount of restitution ordered did not exceed Hill‘s economic loss. The Appellate Court sustained the fourth assignment of error and remanded with instructions for the court to conduct a hearing to determine the proper amount of restitution. The conviction otherwise stands.
The Judgment was affirmed in part, reversed in part, and remanded for further proceedings on the issue of restitution.