The Federal Bureau of Investigations has launched a money-laundering probe of a Mainland mortgage lending company a Kapahi couple alleges acquired their home in a case of fraud. Rufo and Sharolynn Cardenas said they fell behind on their mortgage payments
The Federal Bureau of Investigations has launched a money-laundering probe of a Mainland mortgage lending company a Kapahi couple alleges acquired their home in a case of fraud.
Rufo and Sharolynn Cardenas said they fell behind on their mortgage payments in 2005 and sought help from company Head Financial.
They said they became victims of a mortgage solicitor who encouraged homeowners to convey their property to the company with the promise that after one year, the couple could secure a lower-interest mortgage loan that would allow them to buy back their home.
But instead of that happening, the house was conveyed to an employee of Head Financial who subsequently conveyed it to another person who became the owner, the Kaua‘i family alleges.
The Cardenas family maintains they own the house and that they were nearly evicted from their home this spring by state sheriffs, Sharolynn Cardenas said.
But an auction was called off due to questions about the ownership of the home at the 5600 block of Kei Place, according to Big Island attorney George Zweibel, who represents the Kaua‘i couple.
“She and her husband appear to be victims of fraud,” he said yesterday. “And it appears there were a number of parties involved, those on Kaua‘i and on the Mainland.”
Zweibel said he plans to file a lawsuit in 5th Circuit Court soon against those connected with Head Financial. He specializes in mortgage servicing and foreclosure rescue scams.
Along with Honolulu attorneys Derek Kobayashi and Mihoko Ito, Zweibel filed a related lawsuit in 5th Circuit Court on June 8 on behalf of two Kaua‘i residents claiming they were victimized in the same way as the Cardenas family.
Named as defendants were Jeanne Cadawas, a recreation manager, and Robert Raposas, a landscaper. Named as plaintiffs were Twyus Peahu, Carl W. Carberto, Bunny Mattice- Clevenger and others who were allegedly accomplices in the taking of the title and home equity of property owned by Cadawas and Raposas.
A court date has yet to be set.
Sharolynn Cardenas has alleged Peahu and Clevenger, affiliated with Head Financial, worked together to illegally take her family’s home in spring 2006.
“Peahu said he was going to help us. We believed in him,” she said. “We have plenty of hardship. But our faith has kept us strong.”
Peahu, who is associated with Unlimited Mortgages in Lihu‘e, said initially he was nothing more than a conduit between the Cardenas family and Head Financial. Peahu did not return several phone calls over several days.
A search on the Internet for Head Financial Services failed to turn up any information on the lender.
The FBI informed the Cardenas’ in a February letter that the agency has begun a forfeiture investigation of Charles Head, who is connected with Head Financial.
In a March letter, the agency informed the Cardenas family that their name has been referred to an FBI victim assistance program because they might be possible victims of a federal crime.
Sharolynn Cardenas said the FBI told her it is investigating 200 fraud cases against Head Financial, and hopes conviction of those who perpetrated fraud will invalidate the transaction that left her family without a home.
The Cardenas family bought their home in a foreclosure transaction for $137,000 in 2002.
The home was a fixer-upper, and Sharolynn Cardenas, a maid, cook and bartender, and Rufo, an appliance repairman, depleted their life savings fixing it up.
“We made it livable, worked on the plumbing and cesspool problems,” Sharolynn Cardenas said. “We were selected for the Home Extreme Makeover, due to the community service we have done. But we passed it up because we felt others were more deserving.”
She ran a food pantry for the poor out of the home. The Cardenas family also are parishioners at the New Hope Christian Fellowship Church in Kapa‘a.
The family pooled its resources to pay an $1,800-a-month mortgage — for a while before falling into financial hardship.
“I had congenital heart failure in 2003 and I couldn’t work,” Sharolynn Cardenas said.
She also received disability benefits after falling while working as a maid at the Plantation Hale complex in Waipouli.
The family declared bankruptcy in 2004, and contacted Peahu, who connected them with Head Financial.
“He said Head Financial could offer us a $1,500-a-month loan for a full year, and in a year’s time, in September 2006, we could refinance again when our credit scores got better,” Cardenas said.
After she and her husband signed an agreement providing such benefits, “Head Financial told us that we would have $200,000 in an escrow account and that the company could refinance the home at a lower interest rate in September 2006,” she said.
Head Financial also told her a notice was going be put in a local newspaper announcing the house had been sold for $400,000, portions of which were used to pay off the original mortgage.
After she and her husband signed their property over to Head Financial, the balance was wired back to the company, Sharolynn Cardenas said.
She said something appeared to be wrong when she applied for an insurance claim for a severely damaged roof caused by heavy rains in March 2006.
When she and her husband inquired about a $12,000 check they thought they would receive for the repairs, they were informed it went to Mattice-Clevenger, the owner of their home, at least on paper.
“We suspected something was wrong, but we had trust in Peahu, who said everything looked legitimate,” Cardenas said.
• Lester Chang, staff writer, can be reached at 245-3681 (ext. 225) or lchang@kauaipubco.com.
