Wednesday, March 01, 2006

Maryland Court Awards $500,000 Punitives Against Foreclosure Rescuer

The Circuit Court for Prince George’s County, Maryland issued an opinion and order in the case of Tommie Mae Smith v. Vincent Abell.  Abell has named as a defendant in numerous lawsuits that allege he engaged in foreclosure rescue.  He is currently a defendant in a lawsuit involving nineteen plaintiffs and the AARP has brought a class action lawsuit against Abell wherein six plaintiffs are seeking recovery.

According to the court’s Opinion in the case of Smith v. Abell, Ms. Smith is an 83 year old woman in poor physical health but good mental health.  Her total income each month was approximately $1,300. 

In 1993, Ms. Smith purchased a home at 6104 Tarquin Court, Temple Hills, Maryland with her daughter Bernice Smith and mother and daughter lived in the home together for almost ten years.  Bernice Smith died in 2003 and Ms. Smith became the sole owner of the home.  The mortgage on the home was over $1600 per month.  Ms. Smith had approximately $200,000 of equity in the home.  In 2004, with the mortgage substantially in arrears, the mortgagor initiated foreclosure proceedings.

Abell’s agent, Calvin Baltimore, went to Ms. Smith’s home and spoke to Ms. Smith’s niece.  He offered to purchase the home, bring it out of foreclosure and allow Ms. Smith to continue to live the home for one year at a rent of over $1900 per month.  After one year, Ms. Smith would have the option to repurchase.  Ms. Smith’s niece signed the Agreement to Sell Real Estate.  Ms. Smith never signed the sales agreement nor did she ever sign a deed transferring the home.  The buyer’s obligations under the sales agreement were not complied with. 

In January 2005, Abell’s company, Modern Management, Inc., filed a lawsuit to evict Ms. Smith from the home.  The lender initiated foreclosure proceedings in March 2005 due to arrearages in the mortgage.

In April 2005, Abell recorded a deed (dated May 1, 2004) to the property.

In May 2005, Ms. Smith filed for bankruptcy protection. She made all the required Chapter 13 payments to cure the deficiency to the mortgage company.  The bankruptcy court did not allow the eviction proceedings to continue and Ms. Smith remains in possession of the home. 

The court awarded Ms. Smith $10,968.28 in actual damages – the amount that she spent to pay the attorney for the mortgage company and her own attorney.  The court also awarded $500,000 in punitive damages finding that there was clear and convincing evidence that Abell’s conduct was motivated by actual malice in that there was clearly ‘conscious and deliberate wrongdoing’ emanating from an ‘evil or wrongful motive.’ In determining the degree of reprehensibility of the conduct in connection with setting the amount of the award, the court stated:

The Defendant, Mr. Abell’s tortious conduct in this case constitutes the most reprehensible actions this Court has ever observed in his 28 years on the Orphans Court, the District Court, and the Circuit Court save only the physical violence and death routinely visited on the Court’s conscious in criminal cases.  On a scale of one to ten as to reprehensibility ... the Court rates this an eleven.  If the Defendant sleeps at night, the Court can’t help but wonder how. 

In order to reach the punitive damage figure, the court added the restoration of the $200,000 in equity to the $10,000 actual damage award reasoning that Abell had deprived Ms. Smith of ownership of her home until the court restored it by finding the deed and sales contract of no force or effect.

Both Abell and Calvin Baltimore, the man who initially visited Ms. Smith’s home, have prior criminal records for mortgage fraud.  In the late 1980s, Abell, then a real estate agent in Silver Spring, Maryland pleaded guilty to making a false statement and “causing an act to be done” following a criminal investigation into FHA loan-insurance fraud. In connection with that conviction, he was sentenced to two years in prison (eighteen months of that was suspended) and was ordered to pay $20,000 in restitution.  In 1990, Baltimore plead guilty to one count of conspiracy in connection with allegations that he solicited consumers to borrower money from lenders at interest rates from 38 to 50 percent.  He was sentenced to five years in prison (suspended) and was ordered to pay restitution of $8,000. 

*Thank you to Michael Morin for a copy of the Opinion.  Mr. Morin is an attorney in Maryland who has found his calling in representing the victims of foreclosure rescuers.  It is a difficult job - seldom well-paid and often heart wrenching.  He is identified in the Court’s opinion as having provided testimony, not only in this case but to the Maryland Legislature in connection with emergency legislation known as the Protection of Homeowners in Foreclosure Act that was signed into law on May 26, 2005.

mortgage fraud