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Defrauded Couple Sue, Get Home Back : Crime: Courtroom victories are rare, however, over a real estate title scam that has become increasingly common.


In a common case of real estate fraud that plagues South Los Angeles homeowners, Henry and Caroline Jackson lost their home of 14 years to a scam artist.

What is uncommon is that they got it back.

Most cases of real estate fraud in which homeowners try to get their property returned are settled out of court or lost to complex paper trails, according to public-interest attorneys. In addition, even in cases in which fraud is proved, attorneys are not always able to get the homeowner's title or property back because the owners have already been evicted.


The Jacksons' case was unusual not only because it went to trial and the couple succeeded in getting the title of their house returned, but because they also were awarded nearly $100,000 in damages.

"This is incredible, it's a real success story," said Ron Kaye, an attorney with the Legal Aid Foundation who represented the Jacksons in their lawsuit. "We're usually hard-pressed to fight cases like this and come out of it with something to show for it."

The goal in many real estate rip-offs is to get victims to sign deeds of trust over to the hustlers, who then use the property as collateral to take out loans for themselves, as happened to the Jacksons. However, the owners are still responsible for repaying those loans.

South Los Angeles is one of the prime targets for real estate hustlers because of the dearth of lending institutions in the area. Law enforcement officials and public-interest attorneys estimate that about 60% of the city's real estate fraud victims live in South-Central or East Los Angeles.

"Most homeowners never get . . . a chance to get an attorney and the scammers know that, so those are the people they go after," said Ken Babcock, an attorney with Public Counsel, a public-interest law firm, which handles real estate fraud cases.

"It takes a tremendous amount of resources to fight these cases, and it's not uncommon for equity scammers and mortgage brokers to try and settle with those victims who find an attorney because they want to get rid of a thorn in their side."

In the two-year court battle to get their home back, the Jacksons ended up being a massive thorn.


The Jacksons' trouble started in 1989 when they met Ronald Jones, a private investor who told the couple he would help get them out of foreclosure after they were unable to repay about $7,000 on a second mortgage and nearly $33,000 in balloon loan payments.

Growing up in the projects in Watts, Caroline Jackson dreamed of getting married, owning a house and raising her children there. In 1976, she and her husband, Henry, bought their three-bedroom house on the 10200 block of Harvard Street and spent the next several years making improvements.

Each improvement carried another loan. Each loan had a balloon finance payment, which all came due around the same time in early 1989. The Jacksons had no way to pay the enormous bill, so their home was put in foreclosure by the banks and loan brokers.

In May, 1989, Jones was introduced to the couple by a woman who claimed to specialize in helping homeowners get out of foreclosure. Jones promised to help the couple and said he would put up some money that would allow the couple to get out of debt, and then they could pay him back in installments, Caroline Jackson said.

In a civil court trial, Kaye pointed out that Jones told the Jacksons he would pay their debt. He assured the couple that they could stay in the house as long they paid him $900 a month in rent. They had paid $724 a month for their mortgage payments.

According to court documents, Jones had told the couple the only way he could help them was for them to sign over the title of the house to him immediately or risk losing the house in foreclosure. The couple said they did not know that signing over the deed to their house meant that they no longer owned it, so they followed Jones' suggestion.

"Every person in the United States dreams of having a home. And I didn't want to lose mine," said Caroline Jackson. "So we signed over the title. . . . We were stressed, so I cooperated, because this was my first time ever being up against the wall that hard."

For the next two years, the Jacksons regularly paid $900 a month in rent to live in their house, did their own repairs and continued believing they would eventually have their debt paid off and have their lives return to normal.

Meanwhile, Jones had taken out $80,000 in loans against the Jacksons' home, Kaye said. In early 1991, Jones asked the couple to try to refinance the property, which is when they discovered the house was no longer in their names.

"He had put everything in his name and we couldn't do anything. We couldn't get a loan, try and work off these debts, nothing," Henry Jackson said. "I felt like we had really been taken, and it didn't look like there was anything we could do. Every day felt like we were growing another year older with all the stress."

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