Loan Deals: News

I go through loan modification news daily to keep this site updated as well as to keep myself informed about the new topics and issues around loan modification. Every day I see fake news articles designed for one thing – to generate traffic to a site that maybe should be reconsidered before you do business with them.

One such site, About California Loan Modification (dot) com –(sorry for not making it a link , don’t care to generate traffic for these guys) had a press release earlier  on a free site pr-insider.com. The press release talks about a “Mr. A” and quotes him as complementing the work of said loan modification lawyer for taking a “gun to a gun fight” and saving him “well over $100,000”

The article quotes one “Art Franklin” the “VP’ of the company who speaks quite like “Mr A.” when he said “You wouldn’t expect to take a knife to a gun fight and actually win”

I did a little research on this Art Franklin, who isn’t a practicing lawyer here in California, and also checked with the department of corporation’s website to verify that there is no such corporation “About California Loan Modifications”  - but I didn’t need to do all this before I started getting red flags.

The third red flag, after the first two in the article, was the website itself. A free site from www.alamode.com (notice the advertisements on the bottom of the page?), how about no contact information except for a phone number? And a hotmail email address? They can’t afford… oh wait, emails are free these days, even for custom domains….

A quick search on the said hotmail email address shows one Frank Arbizu uses it, and he also has a ytb travel account (multi level travel agency company).

Company: Popo’s Online Travel Agency
Contact Name: Frank Arbizu
Contact Email: fbeezer739@hotmail.com
Contact Phone: 9092408715

Some common sense rules when it comes to ANY kind of an online company:

1) Make sure there is more then just a phone number as a point of contact, with services like google voice, ureach, and other such services 800 numbers are free, and just pennies per minute - so everybody can get toll free numbers to trick people into thinking they are legit.

2) Dont trust corporate websites with advertisment on them - that is not a good sign.

3) If the quotes in the “press release” seem like they are writen by a 15 year old, chances are they are - RUN

4) Do your research, check bbb, check google, check ripoffreport.com.. just CHECK

5) Always, Always, Always go with your gut.

Loan Modification

Its hard to do research on companies when you are about to lose your home. Common sense would tell you not to trust a company that copied the name of a government agency. That’s what a westland family failed to realize when they signed up with Hope Now Modifications, LLC – probably thinking it was HOPE NOW.

In a recent survey of advertising, the Federal Trade Commission found 71 companies running suspicious ads related to loan modifications or foreclosure rescue.

Hope Now Modifications LLC of New Jersey was shut down and its assets frozen in March. It used a name that mimicked the legitimate Hope Now Alliance, a coalition of trade and industry groups.
But that was too late for the Boyds, who are days away from losing their home.

Dan Boyd is now trying to work directly with his lender, Chase Home Finance LLC, to modify his $1,330 monthly mortgage payment for the three-bedroom brick home.
 

Loan Modification

The Ventura County DA is warning people that if they are facing foreclosure , chances are they will be or have been contacted by people offering to “rescue” them - but many times these loan modification companies are fraudulent and often times illegal.

The advisory recomends that if you are facing foreclosure and are looking for a loan modification, the best way to go about it is to do it yourself.

You can read the advisory here

Loan Modification

Recently we have seen more articles of local and state goverments going after people who are operating loan modification scams. This article comes by way of a tampa newspaper, from what we have seen, Florida is being hit harder then california by these loan modification scam artists. This is very suprising since the problem was created by Orange County california based companies.

It is one of more than 50 such investigations now underway in Florida, which ranks second nationally in foreclosures.

“The time is ripe for disreputable companies and individuals to capitalize on consumers’ financial concerns,” said Attorney General Bill McCollum, “and foreclosure rescue fraud is one of the worst manifestations of the current economic situation.”

As the St. Petersburg Times reported last fall, Rechnitz, 62, told homeowners that investors would buy their houses, make the payments and stop the foreclosure proceedings. The sellers could then rent back their homes with an option to repurchase them in two years.

Everybody seems to agree, either go with a not-for-profit that is govermement sponsored, or do the loan modification yourself.

Loan Modification

California implemented a new foreclosure moratorium on Monday to goad banks into modifying mortgages for struggling homeowners.

The California Foreclosure Prevention Act, signed by Gov. Schwarzenegger in February, adds 90 days onto the time period between when homeowners default on a loan and when their home can be repossessed in foreclosure. Banks can avoid the 90-day holdup by having a comprehensive program in place to make mortgages more affordable by reducing the interest rate, extending the loan term, or reducing or deferring some of the principal. Such programs must be approved by regulators.

“The goal is to compel banks to do systematic loan modifications across California to reduce our foreclosure rate, which is the highest in the nation,” said Assemblyman Ted Lieu, D-Torrance, who wrote the bill. “Until we slow that down, the California economy cannot recover.”

Experts said the California initiative should complement the Obama administration’s foreclosure prevention plan, which offers financial incentives to servicers who complete loan modifications.

“This law is most useful as a stick to supplement the Obama administration’s carrots to get loan servicers to adopt a much more systematic framework for doing loan modifications,” said Paul Leonard, director of the California office in Oakland for the Center for Responsible Lending. “It is a useful nudge to get more servicers to sign contracts to adopt the Obama modification plan.”

In the past few months, 15 servicers have agreed to implement the Obama plan, according to the Web site MakingHomeAffordable.gov. Government spokesmen have said that about 100,000 homeowners nationwide have been sent offers for trial modifications, a relatively modest number compared with the administration’s goal of helping 3 million to 4 million homeowners avoid foreclosure.

In California, the Department of Corporations will determine whether banks qualify for an exemption from the moratorium. About a dozen servicers had applied as of last week, said department spokesman Mark Leyes; they will now have a 30-day grace period while their applications are reviewed. A list of the participating banks will be at www.corp.ca.gov.

Leyes said the department will monitor the servicers’ success rate regularly, not just accept their word that they have a program in place. Still, he added, “There is no guarantee in the law or anywhere else that anybody is going to get a loan modification. What we’re looking for is a good-faith effort on the part of the servicer to do what they can to make the loan affordable and sustainable for the homeowner.”

The California law, like the Obama plan, says that servicers can determine whether a foreclosure or a loan modification is more cost-effective and can pick the cheaper option.

Dustin Hobbs, a spokesman for the California Mortgage Bankers Association, said lenders generally do not like moratoriums because they haven’t worked in this past, but they are taking a wait-and-see attitude toward the new California law because it includes a pathway for banks to avoid the delay.

“Because there is so much similarity between some of the provisions and requirements in this law and the new programs at the federal level, my guess is that a lot of the larger servicers will have no trouble qualifying,” he said.

In September, California implemented another law that required servicers to make more efforts to contact homeowners before foreclosing. That law caused a dip in the number of foreclosure filings throughout the fall months, but they have resurged this year now that lenders have caught up with the requirement.

Loan Modification

In his filing, Cuomo accused Amerimod of illegally charging upfront fees and producing misleading advertising sent to homeowners facing foreclosure. His office also issued subpoenas to 13 other loan modification companies, for information on fees, contracts and marketing.

The announcement comes a week after Newsday stories showed a loan modification industry on Long Island that promises to negotiate with homeowners’ banks to modify loan terms on troubled mortgages. Some companies charge thousands of dollars in fees, often upfront.

Cuomo’s effort, combined with proposals for expanded regulation, could mean a smaller loan modification industry, said housing counselor Joan LaFemina of the Community Development Corp. of Long Island.

“My hope is that the people who stick with it really have integrity, but knowing the industry the way it is, there will always be those who operate under the radar and take advantage of the situation,” LaFemina said.

Cuomo’s comment that the industry is a scam is “a great insult,” said Joseph Romano, office manager at Farmingdale-based National Modification Service, which was not been cited by Cuomo. “I stop foreclosure auction sale dates that normally would not be stopped if the client tried on their own.”

Pane said he is following state laws.

“We have always done whatever the attorney general has requested of us and continuously work with them to stay in complete compliance,” he said.

Besides Amerimod, Cuomo subpoenaed five area firms: Nationwide Modification Agency in Hauppauge; Global Modifications Inc. and the Law Offices of Brett Margolin in Ronkonkoma; Loan Modification Affiliate Exchange, or LoanMAE, in Oceanside; Hometown U.S.A. in Plainview; and CloseMore Financial Corp. in New Hyde Park.

Hometown U.S.A. owner Judy Boggio said she stopped doing loan modifications last fall and Global Modification executives told Newsday they changed their practices. The other firms did not return calls for comment or had nonworking phone numbers.

Loan Modification

Starting today, banks in California cannot foreclose a mortgage without either renegotiating the loan or giving the homeowner three months notice.

There have been more than 365,000 foreclosures in California since 2007, with many more already scheduled.

“California is ground zero for foreclosures. We’re getting about 80 to 90,000 foreclosure filings every month. That’s one every 30 seconds, so until we start mitigating the number of foreclosures, our economic recovery is going to be hampered,” said Assemblyman Ted Lieu, the Torrance Democrat who authored the bill.

Even supporters acknowledge the California Foreclosure Prevention will not prevent thousands of additional foreclosures.

But Lieu said it was an important step towards a systematic review of delinquent home loans. Lenders would have to demonstrate they had tried to modify the loan.

If the bank does not renegotiate, the home owner still has 90 days until the bank can take the house. That warning period, Lieu said, will grant at least some people having trouble with a mortgage the opportunity to come up with other options on their own.

The bill passed in February is similar to the Obama administration’s Making Home Affordable Program that began in March.

Both encourages lenders to cut interest rates or rewrite loans to affordable levels.

Loan Modification

A Glendale man was sentenced to five years in jail on Friday after scamming dozens of Valley residents in a mortgage-assistance scheme.

John Herrera, 33, was arrested in December.

Herrera told victims he had “connections” and expertise negotiating with mortgage lenders to reduce payments and stop foreclosures, according to a statement from the Attorney General’s Office.

He would charge homeowners an upfront fee of $1,245.

However, Herrera never offered any loan modification or assistance and used the money for personal expenses, authorities said.

Initially after his arrest, investigators said he scammed 10 Valley homeowners.

After further investigation, the number grew to 47 homeowners.

Herrera pleaded guilty to one felony count of fraudulent schemes and artifices in April.

In addition to his jail sentence, he must pay more than $80,000 in restitution to victims.

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