26 who lost their homes get them back
Mass. says lawyer's 'rescue' cheated them
Twenty-six Massachusetts residents who lost their homes in an alleged foreclosure-rescue scam will regain ownership of the properties as part of a legal settlement.
The homeowners were allegedly tricked out of their homes by a Brockton lawyer, Alec G. Sohmer.
The attorney general's office accused Sohmer of persuading the homeowners to transfer the titles to their properties to him as part of an effort to avoid foreclosure. Sohmer then charged the former owners rent and sometimes sought to evict them when they could not keep up with the payments - which Sohmer knew they could not afford, the state said. The former owners hoped to regain title to their homes through refinancing.
But now Sohmer himself has filed for bankruptcy protection. US Bankruptcy Court in Boston, which is overseeing Sohmer's case, approved the settlement last week.
Mortgage companies provided or serviced home loans that Sohmer allegedly used to facilitate his scheme. They agreed to transfer titles back to the former owners and to restructure loans on the properties to make them more affordable.
Sohmer had taken out the loans to pay off the homeowners' original mortgages, borrowing extra in order to skim fees and equity from the new loan proceeds in each case, the state alleged.
The attorney general sued Sohmer in October 2006, accusing him of unfair and deceptive business practices. He did not respond yesterday to a call seeking comment.
Attorney General Martha Coakley's office said the lenders and servicers will reduce the value of each mortgage to the balance that existed before Sohmer took ownership of the house, or to 80 percent of the home's current market value, whichever is lower.
The agreement will result in a $1.8 million reduction in total mortgage obligations for all of the homeowners, reducing their monthly payments in many instances to help ensure they do not fall back into foreclosure.
With the settlement, "these mortgage companies are helping to solve the serious problems caused by Sohmer," Coakley said.
The properties are in Boston and Southeastern Massachusetts.
The lenders and servicers are: Countrywide Home Loans,
First Horizon declined to comment; the rest did not respond to requests for comment.
Kimberly Blanton can be reached at blanton@globe.com.
