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They relocated in starry-eyed droves from Big Apple boroughs to the Poconos. They were part of a black and Latino migration from the New York City area that in the last decade tripled the ratio of minorities in Monroe County, Pennsylvania, near the Delaware Water Gap. They were looking for peace and quiet and big, cheap homes. Instead they moved into a real estate-scam hell.
So say scores of former New Yorkers who’ve joined lawsuits charging that 26 Pocono-area builders, realtors and appraisers have pushed hundreds of first-time home buyers into foreclosure and financial ruin by offering them inexpensive country homes, then ruthlessly bilking them. The suits seek $18.5 million in restitution and penalties.
At a September 6 forum held in East Stroudsburg by the Pocono Homeowners Defense Association, a Monroe County citizens’ group, indignant Gotham expats joined local politicos in bemoaning what has become a foreclosure epidemic in Monroe County: up from 120 in 1990 to a projected 1,041 this year. The only comfort for attendees was the fact that the Pennsylvania Attorney General has filed two consumer-fraud lawsuits against the companies involved.
One suit names developer Gene Percudani and several companies he is associated with, including Raintree, Why Rent Co. and Coastal Environmental. The other names officers and appraisers at four Keystone companies presided over by Thomas Senofonte.
Allegedly, dozens of victims were lured by ads placed in the New York City and New Jersey media, offering luxury, custom-built homes for about $190,000. The companies offered to sweeten the pot by paying tenants’ existing rent, covering closing costs, and arranging low-interest loans. What the buyers didn’t know, the suit alleges, is that these and other fraudulent practices inflated their home costs by as much as $114,000 over their real value.
In most cases, buyers learned of problems only when they tried to sell or refinance. MTA bus driver Louis Brown remembers responding to a Why Rent ad he saw during Jerry Springer. He paid $153,000 for his home, but after his marriage dissolved, he decided to sell. “I had the house appraised,” he says. “It was worth $77,000.” Today, Brown said, he’s back in a New York apartment, facing foreclosure or bankruptcy, his credit “twisted.”
Percudani’s attorney, Marshall Anders, called the charges “unsubstantiated. Thomas Senofonte said they are “grossly unfair.”
Still, the Monroe County District Attorney’s office seems confident that it has a case. Apart from the civil cases, it also plans to file criminal charges this week against as-yet unspecified defendants, City Limits has learned.
Meanwhile, the Homeowners Association is preparing to march on Harrisburg and Washington this fall, demanding that authorities such as the FBI launch criminal investigations. “Monroe County must be cleaned up,” said member Al Wilson, a former Queens resident. “It’s the Wild Wild West here.”