A California man was arrested on federal charges this past week for allegedly being the mastermind of a $7 million foreclosure-delay scam that targeted struggling homeowners, according to the United States Department of Justice (USDOJ).

Michael “Mickey” Henschel, 68, of Van Nuys, was arrested this past Wednesday morning by federal agents with the FBI and the Federal Housing Finance Agency’s Office of Inspector General (FHFA-OIG). Henschel was indicted on 11-counts and was ordered detained pending trial.

According to the USDOJ, Henschel had marketed illegal foreclosure and eviction-delay services to homeowners through his Van Nuys-based company he operated under several names, including Valueline. The defendants allegedly had the victims sign fake grant deeds that purported to show the homeowners had conveyed an interest in their properties to fictional third parties.

The USDOJ said Henschel and his co-conspirators also allegedly filed bankruptcies in the names of fictional persons and entities to trigger the automatic stay provision of the Bankruptcy Code, which meant that foreclosure sales were stalled.

Henschel allegedly delayed evictions in a similar way, filing fraudulent documents in state eviction actions and sending similar documents to sheriff’s offices.

Henschel allegedly charged some homeowners large fees before agreeing to clear title to their properties, in addition to the monthly fees paid for the illegal services. During the course of the scheme, from October 2010 through July 2013, Henschel and his co-conspirators collected more than $7 million, according to the indictment.

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.