A group of investors is suing Fortuno, Inc., a Lodi, Calif.-based buyer of foreclosed homes and its outside marketing executives, alleging they illegally "enticed" the group to invest in the purchase and re-sale of REOs in Ohio and Michigan with the promise of high returns upon flipping the properties.
The lawsuit, filed by the Law Offices of Andrew M. Wyatt, Los Angeles, alleges that Fortuno, calling itself the "Costco of Real Estate," made misrepresentations to the investors who had hoped to provide affordable housing to residents.
The lawsuit claims, "Fortuno sold plaintiffs' homes in poor unmarketable condition with high-price mark-ups while also failing to find qualified buyers."
According to the lawsuit, after purchasing the properties, the plaintiffs unforeseeably encountered several problems including, significant "fix-up" costs, threats of condemnation by local government officials for safety violations, and an inability to sell the houses due to their dilapidated condition.
At press time Fortuno could not be reached for comment.
