Mi Casa? Sue Casa!

Hispanic immigrants cry foul over an alleged St. Louis housing scam

Stories like del Rio's no longer surprise Mira Tanna and Katina Combs of the Metropolitan St. Louis Equal Housing Opportunity Council (EHOC). Over the past two years, the fair-housing advocates have filed ten discrimination complaints with HUD. Some complaints allege that Adewunmi, and agents Juan and Olmos, falsified loan documents and failed to disclose their financial interest in homes they sold to immigrants at prices far exceeding market value.

"We found that many people didn't know the price of the homes until the closing," says Combs. "And on some occasions, buyers signed blank sales contracts that the agents would later fill out with financial terms. When they complained that the homes were more than they could afford, they were told not to worry, that the payments would soon go down."

Fraudulent loan documents qualified Alfonso del Rio and 
his daughter, Maria, for a home they say they cannot 
Jennifer Silverberg
Fraudulent loan documents qualified Alfonso del Rio and his daughter, Maria, for a home they say they cannot afford.
Attorneys Gustavo Arango (left) and Ken Schmitt believe 
as many as 70 Hispanic immigrants may have fallen 
victim to the alleged scheme.
Jennifer Silverbergphoto by Jennifer Silverbergpho
Attorneys Gustavo Arango (left) and Ken Schmitt believe as many as 70 Hispanic immigrants may have fallen victim to the alleged scheme.

Adewunmi's attorney, Robert Feldmann, says HUD looked into the complaints and found no evidence of wrongdoing. But a spokeswoman with the federal housing agency says the complaints are still under review.

In their unadorned office in the Forest Park Southeast neighborhood, Combs and Tanna keep a spreadsheet of some 40 homes in St. Louis that Cots Realty Investments has sold over the past three years. Nearly every sale has been to people with Hispanic last names and, says Tanna, often at prices much greater than what Cots originally paid for the property.

"We found houses Cots purchased for $32,000 and turned around and sold a month and a half later for $92,000," Tanna says. "In some cases it could be that Cots is investing in and improving these properties, but from what we've seen that's not always true. Many of these homes are in very poor condition. The buyer is completely upside-down on the loan. Some have been foreclosed on. There's no way they could resell the house for what they paid. So they're working extra hours or finding additional jobs to keep hold of the property."

Adewunmi maintains that the homes are sold for market value, with many of Cots Realty Investments' properties requiring two independent appraisers before a bank is willing to sign off on a loan.

"We don't cut corners," he says. "These homes are sold for what the market dictates."

Several of the loans for the Cots Realty Investments' homes came through mortgage broker Jeffrey Epple, formerly with Gorman & Gorman Home Loans. When that company underwent a change in ownership last year, Epple went to work for Debra Gorman and Associates Home Loans.

Debra Gorman declined to comment for this story. Mark Gorman, owner of Gorman & Gorman, says he's unaware of the lawsuit.

As a co-owner of RE/MAX Associates Plus, Epple kept a loan office in the Des Peres property that he shared with the Adewunmis. RE/MAX Associates Plus co-owner Ribaudo says Epple recently moved to Florida to open a mortgage company.

In their suit, Schmitt and Arango allege that Epple accepted loan applications from Juan and Olmos without exercising due diligence and while knowing, or having reason to believe, that the supporting documents were fraudulent.

"Many of the loan documents were completely made up," says Combs. "When I'd tell people how much they earned according to the loan documents, they couldn't believe it. They were like, 'I wish I earned that much!'"

In 2004 Tanna and Combs contacted the Missouri Attorney General's office to report the alleged fraud, but things turned problematic because many of the complainants are not legal residents. Tanna says the talk on the streets is that authorities are less likely to deport illegal immigrants who own a home, because they don't want to expel someone who owes money to the bank. But apparently that theory was not strong enough to allay fears that the Attorney General's office would report the illegals to the Department of Homeland Security.

"Yes, we were contacted about this," says John Fougere, spokesman for Attorney General Jay Nixon. "But if the complainants are unwilling to come forward and testify, it hampers anything we can do." What most angers Maria Lucrecia Knapp is that real-estate agents Christian Joel Juan and Denisse Olmos used their language skills as native Spanish speakers to allegedly take advantage of fellow immigrants.

As founder and director of Manos Unidas, an immigrant-rights organization run out of Our Lady of Guadalupe, Knapp says she's heard from several people over the past two years who feel they were deceived by Juan and Olmos. Many of the alleged victims, she says, felt intimidated by the agents.

"They're targeting undocumented people, and they're threatening them that if they make too big of a fuss, they'll alert authorities and get them deported," Knapp says.

Juan denies that he made any such threats.

This spring Knapp introduced 38-year-old Sophia to attorneys Schmitt and Arango. Although a legal resident, Sophia asked that her real name not be used in this story. She gained refugee status in the United States three years ago and worries that a paramilitary group that threatened her life in Colombia may discover her whereabouts. Beyond that, Sophia doesn't want St. Louis city officials to track her down.

Two years ago she purchased a Cots Realty Investments home through agent Denisse Olmos. The home was never inspected by the city prior to Sophia and her family moving in. It likely wouldn't pass inspection today.

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