Foreclosure Predators

Constance Smith Bridgewater was in default on her mortgage payments, and she was desperate to keep the snug two-bedroom house in San Francisco's Portola district where she lives with her teenage grandson.

It seemed providential when an acquaintance proposed a solution, claiming that it had worked for him: A network of investors would save her house from foreclosure by taking over ownership then renting it to her, promising that she could buy it back.

Sure, the plan involved deeding the home to someone else, but Bridgewater was told that was just temporary so a person with good credit could get a mortgage at a favorable rate - which would help Bridgewater, too, because her rent would be half of the mortgage payments.

The promised advantages were appealing: up to $100,000 from the sale, lower monthly housing costs, assistance in improving her credit score and the chance to make money referring other people for similar lease-back plans. She said the investors assured her she would be able to buy back the house after two years. Bridgewater signed documents last December believing that she was saving her house. But the promised benefits didn't happen, she said.

"I signed away my house and got nothing," she said.

Bridgewater thinks she fell victim to a classic foreclosure rescue scam. She has filed a civil suit against the investors alleging that they used "predatory bait-and-switch tactics ... designed to take both her money and her home." An attorney representing many of the investors denied the allegations.

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