Real estate woes hit home Posted On: Sunday, Nov. 9 2008 07:21 AM By Victor O'Brien
Killeen Daily Herald

In early 2007, two Killeen couples moved into homes they hoped to raise their families in. Now they are out thousands of dollars and desperately counting on people who were strangers just a few weeks ago to help save their dreams.

Robert Groll, a Fort Hood soldier, and his wife, Melinda, moved into a home in the 1300 block of Jefferies Avenue with their now 8- and 5-year-old daughters in February 2007. They wanted to own a home, but poor credit delayed that dream.

They paid $2,500 upfront to Robert "Bob" Alford III, of Killeen, to rent the home for $675 per month, with the option to buy within 36 months when they could secure a loan with better credit.

The Grolls met Alford after their friend, Ninfa Hinojosa, and her common-law husband, Edward Reyes, recommended him.

Hinojosa and Reyes were on the same plan: make monthly payments, rebuild their credit and buy a home in the 2500 block of Lain Drive from Alford. They paid $5,000 upfront to him.

Both families were satisfied with the experience until the original homeowners knocked on their doors.

They say now that Alford scammed them out of thousands of dollars and their dream of owning a home.

"He tries to cheat ya out of your money," Melinda Groll said. "When we first met him, we thought he was an honest guy, trying to help a military family who needed a home. He seemed honest. He seemed good. Now I think he's a crook."

Alford, who declined specific comment for this article, said he was an "investor" helping people sell their homes and avoid foreclosure. As the American housing market collapsed over the last two years, Alford said he was unable to sell the homes, make money and that led to the predicament these families find themselves in.

'Bob Buys Houses'

Hubert Fontenot, 66, wears dark suspenders that hold up his pants while he walks around his home with the help of a cane. If not for caring friends, he might have trouble getting around.

In April 2006, Fontenot was faced with declining health. He was anxious to move close to loved ones in Louisiana. Before he could move, he wanted to get rid of his mortgage for a home in the 1300 block of Jefferies Avenue.

He saw an ad on neighborhood streets for "Bob Buys Houses." He called the 800 number, selected an extension, and Alford answered.

Fontenot said Alford, dressed in business attire, told him he would become the property's trustee and sell the home.

Alford was expected to profit by selling the home for more than the mortgage, thereby profiting on the home's equity value. He would then pay off the mortgage, and Fontenot would be free of financial burden.

Until the property sold, Alford was responsible for maintaining the property and paying the $450 monthly mortgage. Fontenot signed a sales agreement and a "warranty deed to trustee," which gave the home's deed to Alford.

But Fontenot's deed was not his to give, not without settling the mortgage. The mortgage company owned the deed. Fontenot said Alford knew about the mortgage. However, that wasn't a problem because Alford stopped by to pick up the mortgage payment book and made payments on time.

"It was in his hands. He was going to take everything, the maintenance and all that and take care of payments, and he was going to sell it. I didn't have to pay no closing fee," Fontenot said. "He would take the house, and the profit would go to him. To me, I was taking the loss."

Fontenot went to Louisiana and returned in early 2007.

Fontenot wanted to know why his home had not sold. Fontenot recalls Alford telling him in April 2007 that a couple renting the home were in line to buy, but were waiting on paperwork to go through and the husband to return from the Middle East in 2008.

Then this October, a letter arrived in the mail.

After receiving a letter in the mail threatening foreclosure, Fontenot visited the home where the Grolls were living. Payments to the mortgage company had stopped being deposited in August.

The Grolls were confused. They thought Alford was the owner. Even so, they had their monthly rent of $625 in a military allotment to pay automatically to Alford. There was no reason the payments shouldn't be going through unless Alford didn't make the payments.

Fontenot told the Grolls to stop paying Alford and make payments to him.

"I still owned the deed so if anything goes wrong, that mortgage company don't want to hear nothing. They want their money, and they are looking at me," Fontenot said.

Same problem

Also in October, Toni Tucker received foreclosure threats from her mortgage company. Tucker and her husband, Mark, found "Bob Buys Houses" in the phone book in 2006. At the time, Mark retired from the Army, and Toni got a job in Denton.

The Tuckers were anxious to move and be free of their home in the 2600 block of Lain Drive. Tucker said Alford described to them a trust plan similar to Fontenot's agreement. However, Tucker said she was unaware she signed away her deed and that Alford wasn't going to sell the home immediately.

"We actually thought when he came over, he was one of those people that you see on those signs, 'We buy ugly houses' and then thought we would receive the payment," Toni Tucker said. "We didn't understand until we signed all the paperwork that he wasn't going to hand us $43,000 and sell the house. ... We were just signing papers."

Tucker's first foreclosure threat came in December 2006 when mortgage payments stopped being made. Alford took care of the missed payments and the foreclosure threat went away.

Alford missed another payment in February 2008, but took care of it, too.

Tucker said Alford told her he had someone in place to buy the home, but was waiting on income tax paperwork.

Tucker first felt the consequences of Alford's missed payment when she tried to refinance her automobile loan this year. Late payments on her home mortgage blocked credit approval.

The mortgage company threatened foreclosure again. Payments were missed from August until October.

With her credit damaged and facing foreclosure, Tucker drove from Denton to Killeen. She convinced Alford to give her back the deed. He tried to talk her out of it, but she wanted to cut her losses. Alford transferred the deed.

Tucker was back where she began with a house to sell, except her credit was shot.

Few answers

While Tucker received a measure of satisfaction, Hinojosa, Reyes and the Grolls were curious about what happened to their money.

Hinojosa estimates that between the down payment, home repairs and monthly payments, approximately $9,700 was taken from her that did not go toward the mortgage on Tucker's property.

On Oct. 28, they met with Alford at Hinojosa's home and invited a reporter to attend.

During the meeting, Alford declined to answer questions from the Killeen Daily Herald. However, he offered explanations to the angry and confused renters.

Alford described himself as an "investor" who worked freelance by himself with no other job. When Alford spoke, he referred to "Bob Buys Houses" in terms of "our company" and "we," but told Hinojosa he worked alone.

Alford said he was a businessman caught in the nationwide housing collapse brought on by sub-prime loans and adjustable-rate mortgages defaulting. Credit was harder to get and there were no buyers for the homes he acquired. He said he wasn't making money, except on the difference between the rent charged and the actual mortgage payments.

Alford said he mostly worked with homes to save them from foreclosure. However, the homes from Fontenot and Tucker were not approaching foreclosure when they wanted to sell.

According to Bell County records, Alford was involved with the deeds for 10 homes. Attempts to contact all but one of the involved parties led to disconnected or wrong numbers. In some instances, the people moved from the area.

At the end of the meeting, Alford signed a handwritten note promising to repay Hinojosa if she did not contact the police or the news media.

Hinojosa doubts she'll ever see the money.

Not the first time

In 2007, Kimberly Thomas, a Fort Hood soldier at the time, sued Alford and won a default judgment of $34,068.98 when Alford did not show up in court.

The lawsuit stated that Thomas paid $8,000 upfront and $1,200 a month beginning in June 2006 to rent-to-own a home in the 2700 block of Larissa Drive in Killeen. Thomas stated that Alford ordered her to leave the home in January 2007, which forced her to return from an overseas assignment. She returned to find the locks had been changed.

Alford declined to comment on the lawsuit.

Tarl Johnson, a former soldier stationed at Fort Hood, profited from Alford selling his home, but has also paid a price. In May 2006, he agreed to have Alford sell his home. Johnson would receive a portion of the profits because the home value exceeded the mortgage. Alford sold the home around March 2007 for approximately $20,000 more than the mortgage value.

Alford paid the mortgage off and gave approximately $9,000 to Johnson. However, during the year Alford took to sell the home, he missed about eight mortgage payments.

When Johnson went to get a home loan in Arizona this year, he was denied by the first bank because of his credit. He knew a friend at a second bank and was able to agree to pay more in the down payment and interest to get approval.

"If I was to do it again, I would not use him," Johnson said. "It cost me, and it almost kept me from getting a house."

Deborah Huddleston, with Cornerstone Mortgage in Killeen, said a scenario where a person agrees to assume a mortgage and make payments but rents the property, defaults on the payments and pockets the money is a scheme real estate scammers have frequently used in the past to dupe unsuspecting people.

"You hear it all the time," Huddleston said. "The whole idea on that deal is get as much money as you can from a person renting and hope they don't pay so you can get them out and get it from someone else."

Huddleston said a red flag should have gone up for Fontenot and Tucker when Alford was not a Realtor and insisted on handling the property through a trust – something most mortgage agreements forbid.

Tucker, Hinojosa, Groll and Reyes believe that to varying degrees they were defrauded by Alford. Bell County Attorney Richard Miller said a scenario such as this appears to be illegal, but for fraud to be proven in court, the victims would have to show that the person, in this case Alford, intended to defraud them from the beginning.

Alford said he had every intention of selling the homes, but was caught in a bad market. Also, Angel Rosario purchased a home from Alford in June 2006 and said that Alford oversaw a smooth transaction that Rosario never second-guessed.

Getting a do-over

Tucker and Fontenot are where they were two years ago. They have homes to sell.

Hinojosa, Reyes and the Grolls are out thousands of dollars and hope they can reach agreements with Fontenot and Tucker to save the homes they dreamed of raising their families in.

Fontenot has decided to stick with Alford to sell the home even though he missed payments. He fears the Grolls might sue him or he would need a lawyer to terminate the agreement with Alford. Alford cleared the overdue mortgage payments this week. Fontenot said if it happens again, he will try to remove Alford.

Tucker and Hinojosa said one positive came from their misfortune – they found friends in each other.

With Alford out of the picture, Tucker plans to work with Hinojosa so she can eventually buy the home, but both are worried that other unsuspecting buyers or renters will become victims.

Contact Victor O'Brien at vobrien@kdhnews.com or (254) 501-7468.