Two residents accused of mortgage fraud
Attorney general: Brokers targeted homeowners facing foreclosure
Mike Rothweiler of St. Charles and Christopher E. Cosma of St. Peters face charges of duping individuals facing foreclosure and defrauding them, according to court filings in the 11th Judicial Circuit Court of St. Charles County.
The lawsuits, referred to as Operation Stealing Home, are among seven statewide actions taken by Nixon's office, which contends the individuals and businesses charged defrauded consumers through foreclosure consulting scams.In the case against Rothweiler and his company, Private Funding Solutions Inc., the state alleges Rothweiler combed listings of homes facing foreclosure, contacted their owners and offered help to keep them in their homes.
The charges against him allege fraud and misrepresentation, and failing to remit funding to mortgage-holding institutions to ward off foreclosure.
The state alleges Cosma made $67,000 by composing a complicated web of fees related to refinancing home loans since 2005. The suit states he did so as an employee of America One, Finance Inc., AAPex Mortgage, Flite Financial, Castle Point Mortgage, Accredited Home Lenders and North American Home Loans.
Rothweiler said the first he heard of the charges against him was from media reports citing a news release from Nixon's office Monday.
"The release doesn't have factual statements and I can't really comment more," Rothweiler said.
Rothweiler said he was uncertain why he was being singled out in the charges. He said the charges were a political move by Nixon, who is running for governor.
"I can speculate, but I'm not sure what's inside his head," Rothweiler said, referring to Nixon. "He's a political animal, it's a political year, and there has been this alleged crisis in the news, and he'd like to show he's doing something about the crisis."
One of the charges against Rothweiler alleges he presented himself as an attorney. When asked about this charge, Rothweiler responded: "I am not an attorney and have never, ever represented myself as an attorney. That's among those false statements (in the charges)."
Attempts to reach Cosma were unsuccessful.
In a phone interview, Rothweiler seemed determined to contest the charges.
"To the best of my recollection, people in the United States are still innocent until proven guilty, and there has been no proof," he said.
The first complaints related to Cosma were filed in April 2007. The complaints against Rothweiler were filed beginning in November 2007.
John Fougere, the attorney general's press secretary, said a steady flow of consumer complaints related to the mortgage industry have reached the attorney general's office in the last six months, though the two civil cases filed Monday were the first action taken in the same period.
"As the economy and housing market have soured, foreclosures have increased and, unfortunately, so have the situations where have unscrupulous people who look to prey upon those in desperate situations," Fougere said.
The filings underscore a number of residual lending issues that emerged during the housing boom in the early part of this decade. Looser lending standards that allowed more consumers to purchase homes later made homeowners more vulnerable to foreclosure and, in some cases, fraud.
Because the cases against Cosma and Rothweiler are civil cases, the maximum penalty for each defendant is $1,000 per incident. The court filing also calls for the defendants to pay restitution to victims and all court costs. The state seeks to bar the defendants from working in the mortgage industry in the future.
THE ROTHWEILER CASE
Rothweiler and his company, Private Funding Solutions, are accused of searching foreclosure listings to find homeowners facing foreclosure and sending those homeowners solicitations that offered assistance.
He has called the allegations false.
Rothweiler is accused of offering homeowners facing foreclosure consultations at a rate of $50 per hour and to have presented himself as an attorney on at least one occasion. Rothweiler is alleged to have agreed to assist a homeowner in stopping a foreclosure, contingent on the customer signing a contract with Rothweiler transferring the title to the customer's property to Rothweiler. He is accused of portraying the ownership of the new property as a trust belonging to Rothweiler and LRRP Holdings Inc.
It is alleged that Rothweiler signed documents on behalf of LRRP in his capacity as president of Private Funding Solutions, the trustee of the property. In exchange for property transfer, Rothweiler allegedly agreed to contact the lender and pay what is necessary to stop foreclosure proceedings.
As part of the agreement, at least one customer agreed to rent the home from Rothweiler, according to the suit. It alleges that in one of these arrangements, the customer's lease had a purchase option. Attorney General Jay Nixon alleges that the monthly rent was the amount of the monthly mortgage payment plus an amount determined by Rothweiler, referred to as a "triple net" in the agreement, increasing mortgage payments of $406.24 to a rental payment of $1,600.
It is alleged that sufficient funds were not remitted to the mortgage lender, causing a customer to receive additional notices of delinquent payments and the commencement of foreclosure proceedings. It is also alleged that at least one customer was threatened with eviction.
Rothweiler is accused of failing to notify customers of their right to cancel their contract with him within three days, as required by law, of demanding payment before performing services, demanding fees in excess of 10 percent per year of the amount of any loan made to customers, and violating statutes related to foreclosure consulting and unfair practice.
View the Private Funding Solutions Inc. lawsuit documentation.
THE COSMA CASE
Cosma is accused of defrauding three different pairs of homeowners in three states, according to the attorney general's office:
Columbia, Mo.: Around July 14, 2006, Cosma is alleged to have extended a good-faith estimate on a refinance loan to a Columbia, Mo., couple. Cost at closing was significantly higher, with multiple fees not originally conveyed to customers, according to the allegations. In November 2005, the couple appeared for closing on a second property. According to the suit, that loan also had origination and other fees. The couple maintains they were told there would be no pre-payment penalties, though the final document included prepayment penalties. Cosma is alleged to have made $53,810 from these transactions.
Cape Coral, Fla.: In procuring a refinance loan for a Cape Coral, Fla., customer, it is alleged that Cosma, acting on behalf of Accredited Home Lenders, told the customer he qualified for a refinance loan program for which he did not. According to court filings, the customer then raised concerns that the loans did not meet his financial needs and would require him to incur significant prepayment penalties, broker fees and additional closing costs. The customer repeatedly attempted to contact Cosma, the suit says, but was unsuccessful. According to allegations from the attorney general, Cosma gained $14,000 by the transaction.
Oak Forest, Ill.: Court filings allege that Cosma and Castle Point Mortgage obtained information from LendingTree.com about a customer seeking to refinance her home. According to the suit. Cosma and CPM contacted the customer to offer to refinance her adjustable-rate mortgage into a fixed-rate mortgage, offering her an interest rate of 7 percent, but presenting a loan with 9.58 percent interest at closing, telling the customer she could refinance two days later. The customer tried to contact Cosma afterward without success. Cosma and CPM are alleged to have gained $10,000 through the scheme.
Attempts to reach Cosma were unsuccessful.
View the Christopher Cosma lawsuit documentation.
