Charges Dropped: Man Suspected of Skimming Equity from Distressed Homeowners.

Prosecutors have dropped mortgage fraud charges against a man accused of skimming home equity from distressed homeowners

The case against Thomas Cuomo could not stand in the wake of an e-mail and paper trail showing the mortgage company he was working with wasn't the victim of fraud - but instead the possible cause of it.

Cuomo, who once was a housing counselor for the Jacksonville Urban League, bought homes from people in foreclosure. At one time, he was suspected of skimming out what equity had been built up and renting them back to the original owners, promising them a chance to buy the houses back.

But the houses slipped back into foreclosure.

He was first charged in 2007 with money laundering and mortgage fraud after state investigators found similar stories from nearly a dozen people in Duval and Clay counties. That case was dismissed on a technicality.

In 2008, he was charged again, this time accused of taking out fraudulent loans.

Mitchell Stone, Cuomo's attorney in the 2008 charges, but not the previous case, said a simple e-mail trail showed that Cuomo tried to correct wrong information on his mortgage applications. For example, he said, loan documents said one of the homes was going to be owner-occupied, but Cuomo tried to correct the information to say it would be a rental.

It was Countrywide and other lenders, according to Stone, that refused to correct the wrong information so that it could make the loan, then bundle and sell it with other risky mortgages. The case is a microcosm of the wider mortgage meltdown that has sent the economy into a tailspin.

April Charney, an attorney at Jacksonville Area Legal Aid and one of the nation's experts in foreclosure law, is defending one of the foreclosures on behalf of the tenant, Lester Thomas, who sold his house to Cuomo. Thomas still lives there because the bank has not been able to prove it has the right to foreclose on it.

Charney said the case represents many of the problems with the mortgage crisis: Irresponsible lenders and irresponsible borrowers, scams perpetrated on low-income people in dire straits and the improper securitization of high-risk loans.

And, she said, it illustrates why law enforcement agencies must put more effort into investigating such cases.

From Jacksonville News