Broward Couple Claims Fraud on Florida Home Loans in Lee County

Daphne and Randolph Sewell thought they were risking only $15,000 in the summer of 2005 when they took out $750,000 in construction loans for three First Home Builders houses in Lee County.

However, in today’s Florida housing market the houses are worth less than those loans and the tenants who were supposed to defray the Sewells’ mortgage payments never materialized.

“We’re facing financial ruin,” said Daphne Sewell, an administrative assistant in Broward County government. Her husband is a carpenter.

On their combined income of less than $90,000 a year, the couple couldn’t afford to make the roughly $6,000 a month in Florida mortgage payments on the houses if they bought them, she said.

Now the couple, who live in Broward County, face foreclosure by First Florida Bank on two of the houses.

In turn, they filed a lawsuit March 30 against the bank; their real estate broker, D’Alessandro & Woodyard; their real estate agent, Samir Cabrera; and First Home Builders, accusing them of mortgage fraud, securities fraud and breach of contract.

The Sewells’ lawyer, Gary Poliakoff of Fort Lauderdale-based Becker & Poliakoff, said he’s negotiating with First Florida to try to reach an amicable solution so he can focus on First Home and D’Alessandro & Woodyard.

He may convert the case into a class-action lawsuit to represent others who signed the same type of deals as the Sewells, Poliakoff said, adding that he has been contacted by more than 20 people in similar circumstances.

First Home spokesman Ray Casas said the home building company — now a subsidiary of Red Bank, N.J.-based K. Hovnanian Enterprises — has done nothing wrong. Hovnanian bought First Home’s assets in August 2005.

“We were the builder of the home,” Casas said. “Whether the purchaser chose to live in the home or do something else with it after purchasing the home was their decision. We had no obligation to provide tenants.”

Frank D’Alessandro, Florida mortgage broker who writes a column on real estate for The News-Press, said he didn’t know of anything that indicates wrongdoing by Cabrera or other D’Alessandro & Woodyard employees.

Cabrera could not be reached for comment despite repeated calls over three days. Poliakoff said his clients “kind of naively signed all these [Florida home mortgage] documents” without realizing the consequences.

“The Sewells are people who are hard-working individuals with family. They’re somewhat unsophisticated about making investments,” Poliakoff said.

Also, he said, the prospectus sent to them by D’Alessandro & Woodyard included language that adds up to securities fraud. For example, it states: “Investors will receive a gross return of 14 percent of the sales price of the home. The 14 percent is contractually agreed upon by the tenant before occupancy.”

In addition, Poliakoff said, “There’s a word in there that jumps off the page — that they will ‘coach’ the tenant on how to qualify for a mortgage. What the hell does that mean? It sounds like mortgage fraud.”

Daphne Sewell, 44, said she just wants to extricate herself, her husband and their three children from the situation.

“There’s something desperately wrong with the whole thing,” she said. “I think everyone was just kind of led down the garden path.”