Deed and Note Traders, LLC and 881 Home, LLC and the manager, David Kinas, Tucson, Arizona had a consumer lawsuit filed against them today alleging that they deceived consumers in real estate transactions.
The Attorney General’s Office (AGO) lawsuit alleges that Kinas and his companies sold homes under a “wrap mortgage” arrangement and then failed to make payments on the underlying mortgages. Wrap mortgages are arrangements where the primary mortgage holder (the Defendants in this case) makes a second loan to consumers who purchase the home. In these types of real estate transactions, the holder must continue to make payments on their underlying mortgage or risk a foreclosure that causes the consumer to lose their home. The AGO alleges that the Defendants failed to make their loan payments, despite taking thousands of dollars of down payments from consumers and promising to apply consumers’ monthly payments to the underlying mortgage.
In addition, the lawsuit alleges that by failing to provide consumers a title report and a minimum 15-year loan repayment term, the Defendants violated Deed and Note Traders’ 2006 Consent Decree with the State.
Arizona Attorney General Mark Brnovich made the announcement.
“Owning a home is part of the American Dream but, sadly, that didn’t happen in this case,” said Attorney General Mark Brnovich. “Consumers made a down payment and monthly mortgage payments thinking they were getting closer to owning their home. Instead, they got foreclosure notices.”
The AGO’s lawsuit seeks consumer restitution, up to $10,000 in civil penalties for each violation of the Arizona Consumer Fraud Act, $25,000 for each violation of the Consent Decree, injunctive relief, disgorgement, and attorneys’ fees and costs, plus the amount Deed and Note Traders owes on the 2006 Consent Decree.
David Kinas is not a licensed real estate agent nor a mortgage broker. Consumers can protect themselves from mortgage fraud by conducting research before entering into a real estate contract. Contact the Arizona Department of Insurance Financial Institutions to determine whether the loan company is a licensed mortgage lender and whether it has a disciplinary record. Contact the Arizona Department of Real Estate to determine whether a sales person or broker is licensed and has any disciplinary actions against them.
This case is being handled by Assistant Attorney General Jennifer Bonham. Senior Litigation Counsel Rebecca Salisbury, and Senior Litigation Counsel Kristin Schriner.
If you believe you have been the victim of consumer fraud, you can file a consumer complaint by visiting the Attorney General’s website. If you need a complaint form sent to you, you can contact the AGO’s in Phoenix at (602) 542-5763, in Tucson at (520) 628-6648, or outside the Phoenix and Tucson metro areas at (800) 352-8431.