Despite mortgage fraud, woman gets her house back

When federal securities officials closed Robert Stinson Jr.'s real estate investment firm - Life's Good Inc. - for alleged investment fraud in June, they said it had no "significant" property holdings.

There was no way they could have known how much the house at 1200 S. Ruby St. in Southwest Philadelphia meant to Joan Porterfield. She had inherited the house from her mother, but lost it to Life's Good after mortgaging it in September 2007 for $25,000.

"On the papers they filed at City Hall, it shows like I gave them my property," even though she had no intention of doing so, Porterfield said.

Porterfield, 47, has since won a judge's order to have the Ruby Street house put back in her name. But she remains shaken by the ordeal, choking back tears as she talks about the small rowhouse as the only thing she has left from her mother.

The Securities and Exchange Commission accused Stinson of operating a Ponzi scheme that raised at least $16 million from 140 investors since 2006, including $12.1 million between April 2009 and May 2010.

Stinson, who has previous convictions, promised investors that every dollar would be invested in real estate and would generate a 16 percent return. Instead, he gave money to family members and spent lavishly on dinners at Center City restaurants, on yachts, and Phillies games, the SEC alleged in a civil complaint filed June 29.

The SEC found nothing to support Stinson's claims that Life's Good made $34 million in loans in 2008. Yet early on in the history of Life's Good, Stinson's supposed investment vehicle, the STABL Mortgage Fund L.L.C., did make several small real estate loans, according to public records. The SEC contends STABL Mortgage Fund became the conduit for Stinson's Ponzi scheming.

The deals happened in 2006 and 2007, in the waning days of the real estate bubble, when it was becoming harder for people with poor credit, like Porterfield, to get loans.

Porterfield was living in Delaware County, but she wanted to move back into Philadelphia. She was renting out her mother's house, so she decided to buy in the city's Overbrook Park section.

Primary Residential Mortgage Inc. provided a $143,100 mortgage toward the $159,000 purchase price of a house on Pennington Road. Porterfield needed to borrow $8,000 for closing costs. A mortgage broker hooked her up with Life's Good, but it would lend no less than $25,000, Porterfield found.

After taking the loan despite not needing that much money and not fully understanding the terms, she was stunned to find Life's Good demanding full repayment after she made three $395 payments. "If I could do that, I wouldn't have needed the loan in the first place," Porterfield said.

It gets worse. In the packet of loan documents Porterfield signed for the mortgage on 1200 S. Ruby St. was a deed in lieu of foreclosure, which allowed Life's Good to take the house without going through foreclosure. Life's Good did so in November 2008.

Stinson, 55, does not have an attorney and could not be reached by telephone. Matthew Razzano, a Huntingdon Valley lawyer who was an adviser to Life's Good and handled the real estate transactions with Porterfield and others, did not return calls.

No one answered the door Thursday at a house in Chesterbrook owned by Stinson's wife, Susan.

In the driveway sat a creme-colored Mercedes-Benz GL 450 SUV. Susan Stinson bought such a vehicle from Mercedes-Benz of Fort Washington on May 8 for $73,000 in cash.

For a time the couple lived in nearby Berwyn, in a 7,770-square-foot house they were renting for $8,500 a month. Public records show Susan Stinson at that address, and the SEC said Stinson was from Berwyn. The lease on the Berwyn property expired July 1, according to bankruptcy documents of the property's owner, Diane C. Henderson.

Beyond Porterfield's case, Life's Good's involvement in real estate transactions appears limited to the unruly world of residential real estate investing, according to public records.

For example, in March 2007 Life's Good loaned $60,000 to DRT Financial Holdings L.L.C., with 1813 W. Rockland St. in Philadelphia's Logan section as collateral. But DRT already had used that property as collateral for another loan that it had not repaid, thus supplanting DRT's previous lender.

Richard Harley, the man who started DRT, eventually turned the property over to Life's Good, which still owns it, according to public records. Harley could not be located.

Meanwhile, the original lender, Edward B. Harding, of Haddonfield, has sued the entity that hooked him up with Harley. "I was in the original investment with DRT and Harley, but it somehow got reassigned," he said.

Life's Good also appears to have pushed out another lender, identified as Jill Sharff, and taken over property at 2119 Gould St. in Southwest Philadelphia through a deed in lieu of foreclosure. Sharff declined to comment.

Fortunately for Porterfield, her attorney argued successfully in court that the deed in lieu of foreclosure for 1200 S. Ruby St. should be invalidated because Life's Good did not register it within 90 days of its signing, as required by Pennsylvania law, according to court documents.

Porterfield said she still owed her attorney $3,618. "That's why I don't have the deed right now. He needs his money," she said.