South-Central Elderly Warned of Scam : Fraud: Up to 900 widows have been bilked out of their homes. Volunteers are warning residents of the unscrupulous house improvement schemes.
Community activists have launched a program aimed at warning South-Central Los Angeles residents about unscrupulous home improvement schemes used to bilk a number of elderly widows out of their homes.
Nearly a thousand women--most of them in their 70s or older--have already lost their homes, say lawyers for the Bet Tzedek Legal Services.
To fight the fraud, attorneys for the nonprofit public-interest law firm and leaders of the First African Methodist Episcopal Church have formed the Home Equity Task Force.
A cadre of church volunteers are being trained by Bet Tzedek lawyers to walk the neighborhood streets and warn elderly homeowners that fraudulent operators may be knocking on their doors. The elderly will be told that free counseling and legal advice are available through the church.
Training of nearly 50 volunteers started Saturday in the church basement. William Flanagan, director of litigation for Bet Tzedek, explained how the relatively simple but deceptive home improvement scam works.
“The salesmen are out there now going up and down the street,” Flanagan told the volunteers. He said there are several groups of unscrupulous operators preying on the elderly and the number of victims is on the increase.
“It’s happening to hundreds. . . . I think there is a minimum of 800 or 900 victims,” Flanagan said, acknowledging that this is only an estimate because no reliable figures are available. The focus seems to be on South-Central Los Angeles, Compton and Inglewood, he added.
The typical victim is a widow in her 70s who has lived for 40 years in a house that she and her husband purchased after World War II for $15,000 to $20,000. The house is paid for, old and in need of repairs. But in today’s escalating real estate market, it is worth $70,000 to $90,000, Flanagan said.
That built-in equity is the target. To get the house and cash out the equity, the shady operator first must get the owner to buy some sort of home improvements--on credit.
The fast-talking salesmen offer a new roof, heating system, maybe some carpeting, all for a few thousand dollars at low monthly payments. The widow signs loan papers and a mortgage against the property, Flanagan explained. What is hidden in the small print is a $10,000 to $25,000 balloon payment due on demand at the end of the year. When the year is up and the homeowner cannot meet the balloon payment, she is evicted within 90 days.
Too often, Flanagan said, lawyers can do little after the papers have been signed. He told the trainees that the most important information they must pass on to the elderly homeowners is: “Don’t sign anything without legal advice and counseling.”
