Monday, May 2, 2016

Suit alleges woman, 89, victim of mortgage fraud: County officials, private attorneys combat elder abuse

Attorneys representing an elderly Menlo Park woman have filed a lawsuit against a Realtor they say now has an interest in her home after he took advantage of the widow who was facing foreclosure last year.

But while the civil case is just getting started after being submitted in San Mateo County Superior Court last Friday, it represents the ongoing work of a county task force comprised of public and private groups seeking to deter elder abuse.

Gunhild B. Bogue, an 89-year-old whose estate is now under the conservatorship of the San Mateo County Public Guardian, is believed to be a victim of foreclosure fraud during which she agreed to sign a will promising to leave her Menlo Park property to a practical stranger, said Alexandra Banis, an attorney with Barulich Dugoni Law Group. The suit alleges Realtor Robert Leitao contacted Bogue after the property was listed as in foreclosure. He offered to pay her mortgage while allowing her to remain in the home until she died in exchange for her to deed him the property worth an estimated $1.4 million, Banis said.

As an elderly woman with health problems who was in a desperate situation with little understanding of what was happening when she met Leitao in February, 2015, Banis said it’s an unfortunate case of what surmounts to elder abuse, fraud and negligent misrepresentation.

Leitao disagrees, noting the county and attorneys have yet to hear his side of the story. He claims to have helped Bogue as she was just days away from losing the property that had nearly $800,000 worth of debt and a mortgage that hadn’t been paid for years. He also contends Bogue was a hoarder who, despite their agreement, didn’t allow him to fix up the property that’s in shambles.

Now, the county’s Elder and Dependent Adult Protection Team is seeking to support Bogue and deter abuse against this vulnerable population, said Banis and Deputy County Counsel Aimee Armsby.

The group made up of representatives from the county’s Health System, District Attorney’s Office, County Counsel and private law firms was solidified by the Board of Supervisors in November.

“It’s about providing protection and education for the seniors who reside in our county and we know that there are folks out there who are at risk of being taken advantage of,” said Armsby, who expressed concern about the increase of financial-fraud related cases. “I think that’s always going to be a worry in particular in San Mateo County because of the value of real property. Real estate is often the most substantial asset that a lot of older folks have.”

Banis said the firm she works for has been involved with the county team’s work and women over the age of 85, such as Bogue, are one of the most susceptible demographics in the United States.

“We interact a lot with the aging population here in San Mateo County and we saw the need to protect against elder abuse, which is running rampant and growing here,” Banis said. “Our client, in this case a widow in her late 80s, is a perfect example of someone that this task force in San Mateo seeks to protect.”

Bogue and her husband took out a $500,000 mortgage. Shortly after he died in 2013, her mortgage debt was $800,000. When her home went into foreclosure, Leitao sent an “inviting” letter offering a solution to what seemed to Bogue like an insurmountable problem. Thinking she’d found her savior, she contacted the man who rushed to the Menlo Park property within a few hours after she called, Banis said.

Leitao allegedly drafted several documents for Bogue to sign such as a will, deed of trust and loan agreement. Under the duress of facing foreclosure, she signed unaware of the predatory nature of the terms, Banis said. In exchange, Bogue was assured she would be able to continue to live in her home rent free for the rest of her life, according to the suit.

While Leitao eventually brought the mortgage current by paying a lump sum of about $300,000, he quit returning Bogue’s phone calls when it came time for him to help pay her ongoing monthly mortgage payment, according to the lawsuit.

What’s extremely disturbing, Banis added, is that Bogue has no recollection of agreeing to Leitao taking out a second deed of trust worth $995,000 on the property under the company Bare Ventures.
Between this deed, what’s currently still owed on the mortgage and the property valuation, Leitao stands to gain at least $156,000 even if the home were foreclosed upon, Banis said.

Leitao agreed he was encouraged to get involved because he saw value in the property, but contends Bogue is a hoarder who failed to keep up the house even after he offered assistance. Bogue’s goal was to remain in the home she’d lived in for decades but, due to her defaulting on her mortgage and the property being in poor condition, it’s unlikely anyone would have helped her, Leitao said. So he worked out a “reverse-mortgage, equity sort of deal,” which has been successful for both parties in the past. Leitao noted he often works with foreclosed properties and sends out solicitations to those who need to sell quickly and in this case, thought he was helping Bogue.

“I’m out $360,000 on that house. … There’s practically no equity in the house and it’s just such a huge fixer-upper and ultimately she just doesn’t want to move out. So I worked out a deal with her,” Leitao said, noting he believes the county has since red-tagged the property. “The only reason I did it was because I felt if the house was fixed up some day down the road, there’s potential in it. But as it is, it’s a shamble.”

Moving forward, Banis said they’re seeking a judge to void the contracts Bogue signed with Leitao. With the county’s housing market growing increasingly lucrative, Banis and Bogue said it’s important for family members or anyone who comes in to contact with an at-risk elderly person to notify appropriate agencies like the county’s adult protection team.

“Isolation is another factor that can contribute to elder abuse, when people don’t have family members around to look out for them,” Banis said. “I have heard of these types of cases (mortgage fraud) before and it may have to do with the increase in the property values in the county.”

Anyone who suspects elder abuse in San Mateo County is encouraged to call (800) 675-8437.

Full Article & Source:
Suit alleges woman, 89, victim of mortgage fraud: County officials, private attorneys combat elder abuse


Claire said...

Is this why this poor woman was put under guardianship?

StandUp said...

The article doesn't say when the guardianship was created but it looks like it was probably created during the time of the mortgage fraud. What they should have done is prosecute the fraudsters, period.