AG Cooper puts mortgage con artist behind bars
Release date: 4/21/2004
Raleigh: A Wilmington mortgage broker who embezzled close to $1.8 million and caused some consumers to lose their homes has been arrested, Attorney General Roy Cooper announced today.
“This broker cost families thousands of dollars and even their homes,” said Cooper. “We want to make sure that someone like this never gets a chance to rip off consumers again.”
Tim Caviness, president of Homesavers Financial and Equality Mortgage, was arrested late Friday on criminal charges brought by Cooper. Caviness was arrested by State Bureau of Investigation Agents in Guilford County after the New Hanover County Grand Jury indicted him last week on 18 counts of obtaining $849,042.62 by false pretenses and 18 counts of embezzling $849,042.62 from consumers. He is currently being held in New Hanover County jail on $1.5 million bond. Caviness is scheduled to appear in New Hanover County Superior Court for a bond hearing at 2 PM Wednesday. The examination by SBI agents and Department of Justice prosecutors working for Cooper will continue and may result in additional charges.
Between 1999 and 2001, approximately 48 consumers in southeastern North Carolina lost $1.8 million through Caviness’ mortgage scheme. According to consumers who came forward, Caviness approached them about refinancing their mortgages, promising that the new mortgage could be paid off in five years. Caviness convinced homeowners to refinance 100% of their existing mortgage at a higher interest rate and with higher fees, telling them that the equity they had already paid on their home would go into a trust fund. He promised consumers that they would be able to retire the new debt within five years by using money in the trust fund to make payments on the new mortgage.
Within a matter of months, homeowners found that Caviness had drained their trust funds. Families lost between $8,000 and $177,000 each. Many consumers saw their interest rates and their monthly payments more than double, and some lost their homes as a result. Consumers who have sought new home loans with more reasonable payments have had a difficult time finding reputable lenders who are willing to refinance the entire mortgage.
The Attorney General’s Office first became aware of the scheme in August 2001 because of consumer complaints to the N.C. Office of the Commissioner of Banks. Within weeks, Cooper filed suit against Caviness and put a temporary halt to his business. In 2003, Cooper won a permanent injunction and a judgment of $1.5 million against Caviness and his company. Caviness has failed to make the court-ordered payment. A bond held by Equality Mortgage worth $150,000 was used to repay consumers a small fraction of the money they lost.
“For most people, your home is your greatest investment,” said Cooper. “Protect that investment carefully by doing your homework before you agree to refinance your home loan.”