Loan Deals: News

Channel 3 Eyewitness news is reporting a way for scam artists to suck in more loan modification victims, telemarketing dialers with pre-recorded messages.  According to the website, Universal Modification is a fake company and the Department of Banking said they are not authorized to do business and were fined $10,000 accordingly.

“Unless you’re paying a local attorney to appear for you in court, there’s no reason to pay anybody,” said Jeff Gentes, of the Connecticut Fair Housing Center.

Gentes is a foreclosure attorney working with the Connecticut Fair Housing Center in Hartford.

He said he hears from people who were scammed all the time and said while people barely have to pay attention to find offers of modification, a better approach is to seek out a Housing and Urban Development certified housing counselor.

The counselors work for free and can actually help.

Mortgage

What the scam (or allegedly scam artists), don’t realize when stealing money from loan modification victims, is they aren’t just stealing money from these people; they are the reason these people are losing their home.

For what? A few thousand dollars? I’m sorry but loan modification firms just piss me off.

According to NBCWashington.com:

The federal government’s response to the crisis included programs to support struggling homeowners by modifying their mortgages at no expense to borrowers. But a two-year investigation by federal, state and local agencies uncovered an alleged fraud scam that preyed upon the poor.

Shmuckler, who worked out of offices in Northern Virginia, is charged with swindling 10 local homeowners, collecting thousands of dollars in fees, promising to help them reduce their monthly payments, and then making off with their money.

“You had very vulnerable victims here who were taken advantage of and really lost the American dream, [and] lost their homes as a result of this scam,” said Prince George’s County State’s Attorney Glenn Ivey.

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The FBI is alleging that Scott Ross of Woodstock, Ill took money from investors which should have been then invested in a life settlement business, but instead did nothing with the money. The FBI also alleges that to pay the investors off he would then milk more investors and thus starting the Ponzi-style scam.

According to documents, Ross raised almost 4.9 Million from more then 150 investors. The complain goes on, “(T)he defendant misappropriated all of the funds invested in the Elucido Fund to, among other things, pay expenses of the Maize Fund, make Ponzi-type payments to repay investors in the Moondoggie Fund and benefit himself, including the purchase of a $75,000-per-year sky box at the football stadium of the Indianapolis Colts and the payment of a $319,000 salary to himself.”

Uncategorized

Fox Business  and some other random sites have a great article that has tips for surviving the Loan Modification Process. The article lists five key points which we won’t argue with but have decided to add some of our own.

1)      Your bank most probably does not own your deed, and as such they can’t make a decision for you. That’s right, banks sell notes on the secondary market to investors and the investors make any decisions regarding loan modifications. Think of the bank as a service to the investor. They get paid to be the middle man between you and them. They send you bills, collect payment, play interference and customer service. But they don’t make any big decisions.  Knowing this simple fact will help you to understand that the process from start to finish is a very very long time.

2)      There is no negotiation. That’s right; there is no going back and forth about your rate. You might hear stories but they are all made up. If you are approved, that’s the modification terms. There is no going back and forth.

3)      It is illegal to charge for a loan modification in the stage of California. That’s right, sort of. It is illegal for anybody, especially lawyers, to charge up front for a loan modification. They can only charge AFTER THE LOAN MODIFICATION IS COMPLETED. That’s right folks. If you paid out of pocket for a loan modification, you got screwed (but hopefully you still got a loan mod!)

4)      Get your paperwork in order, get your numbers right, and submit after checking and double checking. However, even after, if you find out you were denied and realize its because you submitted paperwork that wasn’t 100% accurate, you are allowed to submit again.

5)      Expect to be on the phone for hours at a time, on hold. Well, ok maybe its not that bad… but still, speakerphone might help so you can go along with your life while waiting to be ignored.

Now back to the original article? you can read it here: http://www.foxbusiness.com/personal-finance/2010/11/11/tips-surviving-loan-modification-process/

Loan Modification

Loan Modification scam companies are nothing new, however, I thought most of them were gone by now. But apparently that’s not the case. In California recently a friend of mine has just found out that after 10 months of waiting around, the company they hired to help with the loan mod have not done anything. Another guy that runs a loan modification company next door to my office, well, loan modification Scam Company that is. A simple google search of his names shows up a lot of complaints. I was trying to figure out why he changed names recently lol

Anyway, even though most states have stopped going after these companies, the state of Virginia is proving they still care.

Attorney General Ken Cuccinelli alleges the American Neighborhood Housing Foundation - which has offices in Chesapeake and Richmond - violates Virginia’s consumer-protection laws. His office filed a lawsuit last week in Circuit Court.

More specifically, Cuccinelli claimed in the suit that the foundation improperly collected advance fees before performing the services paid for and made “false promises… when it represented or guaranteed it would stop a customer’s scheduled foreclosure,” when many times it only delayed them, if that.

you can read the rest of the article here: http://hamptonroads.com/2010/11/virginia-sues-firm-over-loanmodification-practices

Mortgage

If you don’t owe a lot of money, it might be smarter to deal with it on your ownDebt settlement could be the new scam – or not…

Over the past few years I have seen lawmakers go overboard and fight those that actually, in some cases, help people. Sure there are bad apples but you can’t create laws for a few.

Debt Settlement is one of those things.

I am not a writer, I am not an editor, I am not a professor of any kind and in fact, I am a nobody. But I do care. Here are some tips that might help you to not get scammed:

1)    Do your research. This means check everything from domain names and when they were registered, to BBB (even though the whole bbb thing in my opinion is just a big scam), to doing google searches, search everything from the phone number to the address. Look for things like other businesses at the same address/suite or other businesses that use that same number (or used to). These should set off red flags

2)    Debt Settlement companies for the most part will collect money for a set time period, then, at that time, attempt to settle that debt. During this time the money should be in an account in YOUR NAME where you get interest. At any time that you want to get out, the MONEY IS YOURS.. YES… The money, MINUS FEES, is yours.

3)    FEES: Yes guys, nobody works for free, you are settling for in most cases pennies on the dollar, they deserve their money. Make sure you know up front how much you are paying. Also know that in most cases, fees are paid in the beginning and NOT at the end. READ THE FINE PRINT!

4)    If you don’t owe a lot of money, it might be smarter to deal with it on your own

Mortgage

In an attempt to pretend to care about homeowners, the U.S. Department of Housing and Urban Development is considering implementing Loan Modification guidelines and tests for those that want to offer the service.

“One of the things we saw over and over during the boom was that a bad actor would work at a shop for several months, frequently ending up as the ‘top producer,’ and then leave for presumably greener pastures,” Fulmer said in an e-mail. “In actuality, they usually left because their bad loans were about to start blowing up and, if they stayed, they’d be discovered.”

Loan Modifications

The U.S. Department of Housing and Urban Development, which oversees compliance with the SAFE Act, has proposed that employees handling loan modifications for struggling homeowners also meet the licensing requirements, a policy opposed by banks. Mandating licenses for loan modification specialists would slow hiring and stall efforts to reduce foreclosures, said John Courson, CEO of the Mortgage Bankers Association.

read the full article here

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RealtyTrac reported that nearly 38,000 Broward homes were in some stage of foreclosure during the first half of 2010. While this is ten percent down on the previous six months, the number of homes that the lenders are repossessing is up.

Everybody was hoping to get a principal reduction on their mortgage. Obama’s loan modification program was touted by many as a solution to this crisis. Homeowners are now discovering that they were not able to qualify for the much heralded loan modification schemes and are letting their homes go.

you can read the full article here

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