Pa. Attorney General Offers Lay of the Land in Pocono Land Fraud Probe

Pennsylvania Attorney General Jerry Pappert this week will be notifying consumers affected in the state’s Pocono land fraud investigation that failure to pay their home mortgage or escrow funds for that purpose will hinder the state from successfully intervening in any potential foreclosure proceedings.

“I want to again advise homeowners that they must make a good faith effort to pay their mortgages or escrow mortgage funds while our civil and criminal cases proceed,” Pappert said. “In some cases, homeowners have failed to pay their mortgages, property taxes and/or homeowners insurance for 12 to 36 months. My office cannot assist those faced with possible foreclosure if they are not making these payments or placing mortgage funds in escrow.”

Pappert said his office was recently notified by various lenders that they plan to begin or resume foreclosure proceedings against homeowners who, over an extended period of time, have not made any efforts to pay their mortgages or escrow mortgage funds.

Pappert’s Bureau of Consumer Protection is attempting to negotiate loan modifications for some of the homeowners. In other cases, the Bureau has asked lenders to offer consumers one final opportunity to make mortgage payment arrangements before proceeding with foreclosures. One lender said some homeowners will have 30 days to make payment arrangements.

Pappert said, “I strongly urge affected consumers to contact their mortgage lenders immediately. Homeowners cannot forgo their main financial responsibility, which is paying their mortgage and taxes.”

The Commonwealth filed two civil lawsuits and is currently conducting a criminal investigation into claims that Monroe County home buyers were victims of a scheme that inflated home sale prices and appraisals.

During the ongoing litigation, the Attorney General’s Office intervened in nearly 100 foreclosure proceedings. In these cases, the state asked lenders to halt the proceedings and allow consumers to either make partial payments or escrow mortgage funds to protect their property.

Most homeowners who complained to the Bureau continue to make their regular or modified monthly payments. Others, however, have reportedly failed to make any payments at all. Despite the failure to receive payments, several lenders continued to pay the real estate taxes and homeowners insurance to protect their financial interests in the properties.

Pappert encouraged homeowners who have failed to make payments to inquire about mortgage assistance plans that are available through their lenders, the Pennsylvania Housing Finance Agency or other available organizations.