In 2010, Johnnie Jackson became the victim of a mortgage scam when he took out a loan for home repairs. Now, his lawyers say he’s at the mercy of a financial institution if wants to keep his home.
His family has owned the home, located in St. Albans, Queens, since 1956, according to a statement from the Legal Aid Society, which represents Jackson.
Since he was a child, the home was the site of cookouts and family gatherings, Jackson told Insider. His cousins came over often, especially in the summertime.
He bought the home from his parents in 1994 and has lived in it with his brother since. As an adult, his daughter often comes over and stays with him overnight on visits from Indiana.
But now, after 28 years of homeownership, Wilmington Trust, an M&T Bank entity that provides wealth and institutional services, has brought eviction proceedings against Jackson on behalf of MFRA Trust 2015-1, which is controlled by MFA Financial, Inc., a real estate investment company. The suit threatens to take away all the memories the house holds within, his lawyers argue.
In a statement to Insider, a Wilmington spokesperson said its “role is as trustee and not as a lender or loan servicer” and that it’s “named in the suit as the trustee only, in the action brought and controlled by the loan servicer.”
And MFA Financial, Inc. said it had no comment.
Jackson’s attorneys argue that he is the victim of deed theft, an act of fraud that occurs when a homeowner unwittingly signs over a deed to a scammer.
Jackson in 2010 sought to get a $108,000 mortgage to pay some bills and fix up his home. While property records show this mortgage was taken out on his property, Jackson says he never received any money. And two months after this loan was taken out, the deed to his home was transferred to a straw buyer named James Campisi, according to the Legal Aid Society and property records.
This loan is how he got introduced to David Gotterup, who in 2017 was sentenced to 15 years in prison for leading a loan modification scheme that caused more than $3.5 million in losses, according to the US Attorney’s Office of the Eastern District of New York.
Campisi took out a $370,017 mortgage on Jackson’s home, ostensibly to “purchase” the home from Jackson. But proceeds were used to pay off the previous $108,000 mortgage, and Gotterup pocketed the rest, the Legal Aid Society says.
Then, in 2018, Campisi relinquished the home in a deed in lieu of foreclosure to Wilmington Trust as trustee for MFRA Trust 2015-1, which is the entity that now holds the deed to what was once legally Jackson’s home, property records show. Campisi could not be reached for comment.
A deed in lieu of foreclosure is an agreement between a borrower and a lender in which a borrower who hasn’t been making payments on their mortgage hands over the deed to their home, and in return the lender agrees to forgive the loan.
A Department of Justice investigation later found that Gotterup had defrauded more than 1,000 homeowners, according to a Justice Department release from 2017.
Jackson was one of those homeowners.
“Our client fell victim to a large-scale mortgage fraud scheme that stripped him of his most significant asset, his family home, and now he is being victimized all over again,” said Jennifer Levy, staff attorney at the Legal Aid Society.
Jackson intended to take out the loan to cover home repairs, he told Insider.
He thought the loan was real — until a man showed up to his house weeks later and asked for rent money.
Jackson called Gotterup, who told him Jackson still owned the house.
Unsatisfied with Gotterup’s answer and still confused by the man’s appearance at his house, Jackson decided to visit Gotterup’s office in person.
“I tried to go back to the office one day, and they got raided [by the FBI],” he told Insider. “They was there no more. I couldn’t get ahold of them.”
That’s when he drove out to his local district attorney’s office. He told the Nassau County district attorney’s office what happened, and the office referred it to the US Attorney’s Office, his lawyers told Insider.
Gotterup was indicted but he pleaded guilty to only one count of facilitating a loan modification scheme, which did not cover Jackson’s situation, Levy told Insider.
“Unfortunately, the US Attorney’s Office entered into this agreement, a plea deal, with this individual, who basically was the head of this big scam which scammed thousands of homeowners,” Levy said. “So, Mr. Jackson’s case kind of just fell through the cracks, because the person never was formally serving time for it.”
Both the district attorney and the Eastern District of New York vowed to help Jackson, he said, promising to help him retrieve the deed to his house.
When reached for comment, a spokesperson for the Nassau County district attorney’s office said records prior to 2011 have been destroyed. And the Eastern District of New York declined to comment.
A law enforcement source familiar with Jackson’s case told Insider that Jackson had also spoken with the FBI in 2013 about the scam.
Jackson had dreams of keeping the house in the family for generations. He thought he’d one day pass it down to his own kids, just like his father did, he told Insider.
He said he never heard back from either office, so Jackson got an attorney and filed a motion to restore the deed back into his name, Levy said.
But the motion was filed after a six-year statute of limitations, which meant that Jackson’s case was dismissed.
Jackson is still fighting for his house. His next court hearing is on October 20.
The 12-year struggle has made it painful for him today to recall the beautiful memories he had within his childhood home, he said, because when he thinks about everything that went on inside the house, he also thinks about the possibility of losing it.
“I thought I could trust them,” Jackson said of Gotterup. “I really did.”
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