Mortgage scheme may have driven doctor to violence

GENESEE COUNTY (WJRT) -- (02/25/08)--Several banks call it one of the largest mortgage schemes ever in Mid-Michigan. A Grand Blanc Township man is accused of ripping off banks and homebuyers.

One of those buyers: a prominent psychologist who may have been driven to violence.

In a state where last year foreclosure notices roughly equaled the number of birth certificates, Kurt and Lisa Heintz stand out -- at least to several banks.

"Everyone seems to know about these folks, yet nothing has been done," said attorney Michael Haley.

Multiple sources say the FBI is looking into the former Grand Blanc Township couple for mortgage fraud. The agency won't confirm or deny open investigations.

"It just looked funny. You don't normally do it that way," said Brent Green.

"Mortgages were really easy to come by," said Andrew Gavulic.

The Heintzes own Great Lakes Broker Funding. The company faces about two dozen mortgage fraud lawsuits in Genesee County.

In August, Fifth Third Bank won a judgment of more than $17 million against them. California-based Indymac Bank's lawsuit is still pending.

Their court filing lays out what the company claims is the Heintzes' M.O.: First, buy a bunch of properties. Second, get an appraiser to lie about how much they're worth.

Third, let other people in on the plan, get them to apply for loan and buy the land for the higher price. Fourth, pay those borrowers a fee, anywhere from $10,000 to $25,000 up front.

Fifth, Indymac says through a land contract, the Heintzes would promise to buy back the properties for the inflated value, perhaps to sell them again.

Instead, the borrowers were left on the way to foreclosure and potentially facing criminal charges.

They are named in this lawsuit for buying 17 lots, including five in the upscale Rivershyre neighborhood in Davison Township.

The initial appraisal for each of these five lots was $190,000 apiece, but when Indymac conducted a field review later on, they found the actual value was less than half that, about $70,000 each.

The Heintzes' response to the lawsuit? They pleaded the Fifth Amendment, choosing not to incriminate themselves 97 times.

"It's easy to see how it could happen because they were dealing with a lot of out-of-town banks," Gavulic said.

Gavulic and Green work for Franklin Bank. They say when Kurt Heintz approached them for a loan three years ago, they knew something was up.

"When you show me an appraisal for $500,000 more than the cost, most markets don't support that type of increase," Green said. "We're not Florida."

"I guess a bunch of innocent people really got smoked," said Michael Dean, who developed The Meadows of Grand Blanc.

He says the quiet subdivision was a labor of love, a place to retire and a way to improve his community. In 2004, he sold five lots and one house to Kurt Heintz.

"It is pretty peculiar that all five lots he was involved in all went into bankruptcy," Dean said.

He says Heintz paid for the lots up front and promised to build five homes to complete the subdivision within two years.

"He said he would do those things and he did none of those things," Dean said.

Even though a chunk of his subdivision is now vacant, personally, Dean didn't lose much money. Haley can't say the same for his client, Dr. William Harshman.

"I don't know how and why they've been able to get away with this, at least until this point," Haley said.

Haley says the Heintzes ripped off $90,000 from Harshman, who was Lisa Heintz's therapist and a part-time professor at Mott Community College.

Police say the loss drove Harshman over the edge. On Christmas Eve, investigators say Lisa Heintz was stabbed by her therapist while her husband was in the basement.

We interviewed Kurt Heintz minutes later.

"People must be getting desperate. I don't know," he said at the time.

"I'm certainly not saying that he did anything at all," Haley said. "There's a lot more that I cannot talk about and that I can't get into."

But Haley does believe the Heintzes defrauded his client.

"Does it take something like this -- some sort of violent act -- to finally bring attention to what they've been doing?" Haley said.

Harshman is suing for $5 million in damages.

"I think it's disgusting that these people are still walking around town," Haley said.

Well, not quite.

""You pack the truck and you get out," Kurt Heintz said Christmas Eve. "You pack the truck and you move."

During that Christmas Eve interview, Kurt Heintz said he was moving to Florida. Since then, no one's answered the door at his Grand Blanc Township home.

The Heintzes have not been criminally charged. We've tried repeatedly to contact any of their attorneys on file. They've all said they no longer represent the couple.

William Harshman is still in jail on charges of assault with intent to murder. He's pleaded not guilty.

Before you sign on the dotted line for a mortgage, the FBI has some advice. First, run a background check on your lenders, and never sign any loan documents that have blanks.

You should also review the title history. If the property has been sold multiple times within a short period, that's usually not a good sign.

And maybe the best advice: If a deal sounds too good to be true, it probably is.

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local, gabe gutierrez

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