JACKSONVILLE, Fla. – A disabled military veteran and his family contacted the I-TEAM for help after learning they are just days away from being evicted from their Jacksonville home -- even though they have paid their rent and have a lease.
We've uncovered it is part of a statewide scheme that could impact more local families, costing them tens of thousands of dollars. We found it happening right now in Clay, Duval, Nassau and St. Johns Counties. It's so troubling and pervasive, we alerted Florida Attorney General Pam Bondi, who is now involved.
Each house that gets caught up this scheme can have multiple victims -- whether you lose your money, your credit or even your house practically overnight. That's what happened to James and Tiffany McCollum's family, who could soon be homeless.
"We just want a place to lay our head at night," said James. "I wonder how many other families are out there in the same situation, staying up at night, wondering how they will feed their families, the stress of it, the fears."
It's stress Army Specialist James McCollum doesn't need after serving two tours in Iraq. He is medically discharged, suffering from PTSD, shoulder and knee injuries, asthma, and dry eye syndrome.
The couple and their two young daughters live on a tight fixed income, renting an Argyle Forest home they found online through Zillow and Trulia.
After paying $1,100 a month in rent, they could be evicted because the company renting the house, RHMG Inc. (Residential Home Management Group, Inc.), never technically owned it but still got their money.
"Do you have anywhere to go?" the I-TEAM asked the couple.
"No," said Tiffany.
"No, not right now. This is our home. This is where we expected to be," added James.
It turns out the house they have been renting has been in foreclosure for five years, and now the bank has come calling for the property, even serving the McCollum family with a lawsuit.
"Really scary. We've never been caught up in a lawsuit," said Tiffany.
"How much money did RHMG get from your family?" the I-TEAM asked.
"Over $15,000," answered James.
A woman, who does not want to be identified in this story, owns CK Consulting with her husband. They flip houses for a living. They lost part of their life savings on this exact same house.
"We've already paid close to $36,000 for a property we don't even own," the owner told the I-TEAM.
Here's the connection: While the McCollum family was renting the home from RHMG, CK Consulting bought the same house at an auction in May. In Duval County, auctions are done solely online. The bidding sheet shows it was a foreclosure sale and CK Consulting had the winning bid. But what the company didn't know is that the foreclosure had to do with non-payment of homeowner’s association dues.
"We own the house, the ground it's on, but not the house," the woman explained to the I-TEAM.
This was puzzling, so the I-TEAM searched property records and court filings to understand complicated case.
Court documents show the original homeowner stopped paying her mortgage and her HOA dues back in 2012. In Florida, an HOA can legally foreclose on your home in the hopes of getting its money before the bank forecloses on the house.
HOA foreclosures move faster than bank foreclosures. At auction, an investor pays off that small HOA lien, often just a few thousand dollars. In this case, the HOA lien was around $9,000. The winning bidder gets the title to the home making it legal to rent it out. But, that title is essentially temporary until the bank moves forward with its mortgage foreclosure which can take months or even years. When this happens, the unsuspecting renter is forced out.
"And being on a fixed income, it's not like we have funds to just up and leave. There is security deposits, transfer fees," said James. "Paying to move because I'm disabled."
While the McCollum family is stranded, CK Consulting is out even more money.
"We're having to possibly file bankruptcy all because of these two people down in Tampa," the owner told the I-TEAM.
The two people she is referring to are Jimmy and Michael Chancey, with the Tampa-based company HOA Problem Solutions. The company’s website promises to have the answers for homeowner associations following the housing crisis -- offering to buy HOA liens and place renters in the home.
The HOA lien is paid off and HOA Problem Solutions collects the rent money for months or years, while never paying the original mortgage. The profits continue until the bank moves forward with its foreclosure.
The I-TEAM confirmed Attorney General Pam Bondi's office has launched a consumer protection investigation against HOA Problem Solutions after receiving seven complaints from Tampa. Bondi’s office had not heard of any issues happening in Northeast Florida until they heard from the I-TEAM in August. They are now urging anyone affected to call their office at 1(866) 9NO-SCAM or file a complaint online at MyFloridaLegal.com.
But there's another twist. At some point, HOA Problem Solutions changed its business model and started convincing homeowners, not renters, to transfer their ownership through what's called a quit claim deed.
Why would homeowners do this? That's what the Attorney General's office is trying to figure out: What promises were made?
The I-TEAM obtained a flyer from Jim Chancey to another underwater homeowner, calling himself a real estate investor in the Tampa Bay and Jacksonville areas. The promises on the flyer include:
- We will pay you $5000
- Satisfy the lien from the HOA
- Retain an attorney for you when the bank comes after you for the mortgage
The I-TEAM also talked with a Clearwater based attorney, Brandon Mullis, who said the Chanceys admitted during a recent deposition they are affiliated with RHMG, meaning they pocketed the money from the McCollums’ rent, plus the extra from the auction, approximately $27,000 dollars. All the while, the original homeowner is still being foreclosed on.
We found HOA Problem Solutions currently owns at least 25 properties across Clay, Duval Nassau and St. Johns Counties. In most of those cases, homeowners transferred the home to HOA Problem Solutions through a quit claim deed, some for as little as $10.
"I don't know how someone sleeps at night," the owner of CK Consulting told the I-TEAM about being out of money and property they can’t get back. "We have to go out and get jobs."
As for the McCollum family, the couple and their two daughters will soon be out of a home with no money to go anywhere else.
"Why is this legal to take these properties? Why is this legal? Why is this happening?" the McCollums asked.
The I-TEAM found the McCollums were facing eviction because they were unsure who to pay their rent to after receiving the lawsuit from Wells Fargo bank. Were they to pay the rent to RHMG, to CK Consulting, or to Wells Fargo? After making calls to local officials, the I-TEAM was able to discern CK Consulting is the temporary owner until Wells Fargo continues with its foreclosure.
The McCollums are now paying rent to CK Consulting until the bank makes its next move. There is a court hearing on the foreclosure scheduled for Wednesday, August 31st and the I-TEAM will be there.
The I-TEAM also reached Jim Chancey by phone. So far, he’s declined to interview with us to share his side of the story. Our offer still stands. On the phone, Jim Chancey told us that HOA Problem Solutions is a “rental property business” operating in Jacksonville and Tampa. When we asked about the 25 properties the I-TEAM found in HOA Problem Solutions possession in Northeast Florida, Chancey said, “that’s an underestimate.” We asked if he knew the accurate number, Chancey laughed and said “yes” but declined to give it to the I-TEAM saying, “I’m not the investigative reporter, you are.”
The I-TEAM has found roughly 60 corporations between Jim Chancey and Michael Chancey registered with the state. There could be other corporations in a third party’s name they are working with.
The I-TEAM also asked Jim Chancey if HOA Problem Solutions would consider returning the $27,000 profit check to CK Consulting, who bought the property under the impression it was a mortgage foreclosure. Chancey responded “Why would we? I’m not responsible for the buyer. We don’t know what they know.” He further stated online auctions are “blind auctions” and it’s “buyer beware.”
The I-TEAM also reached out to the Duval County Clerk of Courts about the online bidding issues. The public information officer told us “The Duval Clerk’s Office is aware of this issue, and has provided information to the Attorney General’s Office relative to their investigation.”
Better Business Bureau of Northeast Florida: Top real estate schemes and scams in our area
Rental Scams:
As indicated by the National Association of Realtor Estimates, 90% of consumers turn to the web first to search for a rental. Con artists exploit the posting’s date to target their victims by posting them as their own. These phony listings will require you to provide money forthright, asking you to wire it. In addition, they may also ask to run a credit check on you and provide you with a phony application that asks for personal and financial information. Scammers will even go to the extent of strategically listing the rental price at an extremely low rate to garner interest, enticing more people to attend an open house, in which they can pass out more fake applications.
Being proactive is your defense. Do your homework before sending any money to anyone you don’t know.
- First, check with the local tax assessor’s office to determine who owns the property.
- Second, Google the address and see if the property shows up on any real estate website for rent or for sale. If the property that was advertised for rent on craigslist shows up for sale on a real estate website, there is a serious problem. Contact the real estate company and apprise them of the situation.
- Third, if possible, contact the neighbors of the property you are planning on renting. Ask them about the owner and status of the property. Is it for sale? Or rent? Or in foreclosure?
Foreclosure Fraud:
Losing your home is scary and you wouldn’t want scammers to aggravate the situation. Con artists will often pose as foreclosure experts offering to help negotiate and reduce your mortgage payments. At times, they will request to collect the fees upfront and then vanish. In times like this, these false ads may sound appealing, but BBB urges you to do your research before allowing anyone to assist. It is vital to know your rights. Thus, recognize that it is illegal for a company to charge for mortgage relief services until you actually receive and accept a written offer from your lender.
- Here are some red flags:
- Asks for money up-front
- Requests wire transfers
- Asks to make mortgage payments directly to them
- Suggests you transfer your deed
Title fraud:
Though rare, one of the most devastating scams is title fraud. This typically starts with identity theft. The scammer will use illegitimate documents, acting as the property owner, forge documents, and transfer the property in his or her name. In the wake of securing a home loan, the trickster will take the money and vanish. In these cases, homeowners that rent out their homes or do not have a mortgage are in fact more vulnerable to falling victim to title fraud. The best way to ensure you are not scammed is to get title insurance.
Timeshare Scams:
If you own a vacation timeshare - the use of a vacation home for a limited, pre-planned time - be cautious of bogus resale companies who take advantage of anxious sellers in an overcrowded market. Unscrupulous companies typically contact you by phone, mail or the Internet asking you to call a phone number about your timeshare. The salesperson may claim that the market is "hot" for resales, when in fact the market varies considerably depending on location and the prime season for that particular unit.
If you are considering reselling your timeshare and are approached by a company offering to help, the BBB recommends the following:
Do not agree to anything over the telephone until you have had a chance to check out the company.
- Ask the person to send you written materials.
- Ask for references, including address and phone number and contact them.
- Ask where the company is located and in what states it does business.
- Ask if the company's salespeople are licensed to sell real estate where your timeshare is located. If so, verify this with the state licensing board.
- Find out if the company charges a commission. Do they handle the entire closing and provide escrow services? Do they charge an up-front listing or advertising fee? What does it cover and is it refundable?
- Be wary of companies charging an advance "appraisal" fee for services. Consider opting for a company that offers to sell for a fee only after the timeshare is sold.
- Contact the BBB, state Attorney General's office, and local Consumer Protection agencies in the state where the company is located to find out if complaints have been lodged against the company.
Keep in mind that there are other resale options. You may try selling your timeshare yourself, by placing an ad in a newspaper or magazine, or contacting a real estate agent familiar with the area. If all the timeshares have been sold in your development, consider asking the seller to establish an on-site resale office. As an alternative, you may consider an exchange program. For a fee, these programs allow you to arrange trades with other resort units in different locations.
For further assistance, you can contact the Better Business Bureau serving Northeast Florida & The Southeast Atlantic:
- Jacksonville area: 904-721-2288
- Gainesville area: 352-378-0406