Secret deal leaves family facing foreclosure - again

GRAND RAPIDS, Mich. (WOOD) -- Jason and Tricia Wise were losing their home on Grand Rapids' northwest side when they got a mailer from a company called Canal Street Financial.

"It was one of the first letters we got that actually said, 'we're interested in saving your home,'" Jason Wise said. But it didn't turn out that way.

"Basically they got a mortgage and robbed all the equity out of our home and then never made those payments and then waited for the bank to foreclose and kick us out of our house," Wise laments.

It was what is called a foreclosure rescue scheme.

Target 8 Investigators tracked Canal Street Financial in 2005 during an investigation of a different foreclosure rescue story. Canal Street was directing clients to that scheme. A year later, Canal Street, which was then located in a fashionable renovated industrial building on North Monroe in Grand Rapids, was operating its own rescue deal.

Here is how it worked:

The Wises deeded their house for $1 to a company called Wells Financial, operated by an employee of Canal Street. Then Wells Financial deeded the house to Canal Street's boss, Norman Long.

Long, using another corporate identity, NTW Investments, sold the house back to the Wises on a land contract which had them making monthly payments of $719 until the total amount was paid off, at which time they would get back the deed to the house.

But Norman Long had a secret. He had his own deal to make money off the house, unknown to the Wise family. He got a new mortgage on the house for $119,000, paid off their old mortgage of $86,000, and pocketed the $33,000 difference. In addition, Long was receiving the Wises faithful monthly payments on their land contract.

"For the next two years we make all of our payments and we think everything is fine, that we're rebuilding our credit," Jason Wise said.

But what he didn't know is that, despite all that income, Long didn't make the payments on his mortgage. That lender foreclosed and the Wises were back where they started with an even bigger payoff needed to save their home.

What did Norman Long and Canal Street do with all that money?

"We were making so much money, he just went crazy," said Canal Street treasurer Teresa Long, the now-estranged wife of Norman Long. "He had blown it all, just blown every bit of the money," she said.

Teresa Long said her husband spent the money on personal pleasures. She said the company made $1 million to $1.5 million, and at one time controlled 40 homes, earning from $20,000 to $40,000 off each one by getting a bigger mortgage, paying off the old one and pocketing the difference.

"People made their house payments to us and we had to add to that to make up for that $20 - $40,000 that we took," she says. "We also had to pay taxes on the home and he was spending all of it. I had to scrimp and hurry up to pay bills before he got to the money."

She said she couldn't take it any longer, left Canal Street and her husband.

Target 8 Investigators found that at least two dozen of the properties Long controlled have been foreclosed in the last couple of years. "I thought we were helping people," Teresa Long said. "They were getting their houses back. Now all the original home owners are going to lose their homes."

She is being named along with Norman Long in lawsuits. She said her husband wouldn't take her name off the now-defunct company or give her a divorce. She said she can't afford a lawyer and worries that she will become a target of an IRS investigation.

Even for Norman Long, the money is gone and the high life is over. He lost his own home to foreclosure. He was evicted last month from his last business office on 28th Street. His last known address was a 28th Street motel.

Target 8 Investigators tried to find him to get his side of the story but couldn't locate him. Victim Jason Wise told us that Long denied doing anything wrong in one of his last conversations with him.

Meanwhile, a Grand Rapids police detective and a US Postal Inspector are investigating to see if they can charge Long with a crime.

If they do, it won't be the first time. Norman Long has a history of fraud and embezzlement and has done prison time. He was on parole when he created Canal Street Financial.

Meanwhile the Wises are trying to save their home once again. They and their children love their west side neighborhood and are fighting to stay.

"I think what he did is beyond reprehensible," said Tricia Wise. "How would he feel if somebody did this to his child?"