Loan Deals: News

LOS ANGELES - Attorney General Edmund G. Brown Jr. today joined the California Department of Real Estate and the State Bar of California to warn homeowners about an alarming rise in short sale fraud across California in a field “rife with scam artists”.

A short sale is an arrangement in which a homeowner sells his or her home for less than the outstanding mortgage, with the consent of the lender.

“While short sales can provide homeowners with a last-ditch alternative to foreclosure, this market is rife with scam artists,” Brown said. “Homeowners and buyers, agents, and lenders should beware of short sale negotiators who operate without licenses, use straw buyers or charge illegal fees.”

With so many homeowners now considering short sales, an entire industry of so-called short sale negotiators has emerged. These individuals solicit homeowners by promising to expedite the process and help coax lenders into taking part in the transaction.

The Department of Real Estate is investigating more than 40 complaints of short sale fraud, up from “virtually zero” cases only three months ago, a spokesman said.

In April, the Obama administration launched a new initiative called the Home Affordable Foreclosure Alternatives Program, which encourages homeowners in financial distress — especially those who have failed to complete a trial modification or qualify for a loan modification — to consider a short sale as an alternative to foreclosure.

Before working with — or paying — any short sale negotiator, homeowners should consider the following red flags:

No license
With limited exceptions, only licensed real estate agents or attorneys can engage in short sale negotiations with a homeowner’s lender.

Up-front fees
Licensed real estate agents wishing to collect up-front fees from homeowners for short sale transactions must first submit an advance fee contract to the Department of Real Estate and receive a no-objection letter.

Surcharges
With many distressed properties listed well below market value, negotiators and agents are charging potential buyers thousands of dollars in surcharges and hidden fees just to place an offer on a home. These illegal fees are frequently not disclosed and are paid outside escrow.

Straw buyers and house flipping
In this scheme, short sale negotiators misrepresent the market value of a property to a homeowner’s lender by only submitting offers on the property from an affiliated straw buyer. After the home is purchased below market value, the fraudsters immediately flip it and pocket the difference.

Short sale negotiators and agents use a number of titles including debt negotiator, debt resolution expert, loss mitigation practitioner, foreclosure rescue negotiator, short sale processor, short sale coordinator and short sale expeditor.

If you are a homeowner who has been scammed, contact Brown’s office at 1-800-952-5225 or file a complaint online at: www.ag.ca.gov/consumers/general.php.

Homeowners can also learn more about avoiding mortgage and real estate fraud by visiting the Department of Real Estate website at: http://www.dre.ca.gov/cons_alerts.html. A complaint form can be accessed online at: http://www.dre.ca.gov/frm_consumer.html.

“Short sale fraud appears to be the fraud of the moment, and it is proliferating statewide,” according to Real Estate Commissioner Jeff Davi. “Consumers, licensees and lenders must all arm themselves with the tools necessary to avoid such scams.”

Homeowners can file a complaint against a lawyer, a legal specialist or a company purporting to operate as a law firm with the State Bar by calling 1-800-843-9053 or visiting: www.calbar.ca.gov.

Homeowners can learn more about the federal government’s Home Affordable Foreclosure Alternatives Program by visiting: http://makinghomeaffordable.gov/hafa.html.

Non-profit housing counselors certified by the U.S. Department of Housing and Urban Development are also available to provide free help to homeowners. To find a counselor in your area, call 1-800-569-4287.

For more information on Brown’s work against loan modification fraud visit: http://ag.ca.gov/loanmod.

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Loan Modification, Scams brown, california, Loan Modification, Scam, state bar

Not because they look hispanic….

Arizona Attorney General Terry Goddard filed a lawsuit Wednesday against Discount Mortgage Relief and Mortgage Relief LLC in Scottsdale, alleging its principals engaged in deceptive loan modification services that may have duped thousands of victims.

The Attorney General’s Office also secured a temporary restraining order to prevent the Scottsdale companies that do business under both names from charging or receiving money for loan modification services or advertising their services.

The lawsuit alleges that, at least since July 2009, the mortgage companies have deceived consumers into paying thousands of dollars for mortgage loan modification services by misrepresenting their ability to help those consumers obtain mortgage relief and save their homes, a violation of the Arizona Consumer Fraud Act.

Consumers allegedly paid Discount Mortgage Relief and Mortgage Relief approximately $1,350 to $5,000 each for loan modification services and were guaranteed results.

read the entire article here

Loan Modification Loan Modification

Glenn Steven Rosofsky pleaded guilty today to a superseding information charging him with one count of conspiracy to commit wire fraud and money laundering, one count of money laundering, and one count of filing a false tax return, announced Karen P. Hewitt, U.S. Attorney for the Southern District of California. The guilty pleas were tendered before U.S. Magistrate Judge William McCurine Jr., subject to final acceptance by U.S. District Court Judge Roger T. Benitez. These criminal charges stemmed from Rosofsky’s operation of a fraudulent telemarketing operation in San Marcos, Calif.

In his guilty plea Rosofsky admitted that in approximately April 2009, he and Michael Trap (who previously pleaded guilty) began operating a loan modification business using the names “Nations Housing Modification Center” and “Federal Housing Modification Department” (NHMC), in an effort to fraudulently sell loan modification services to homeowners who were delinquent on their monthly mortgage payments. Rosofsky admitted that he, Trap and others used false and fraudulent statements and representations to induce customers to purchase loan modification services from NHMC. Among the misrepresentations made to customers were claims that NHMC had “attorneys” and “forensic accountants” on staff to deal with the loss mitigation departments of banks on behalf of NHMC’s customers, that NHMC had achieved an “extremely high success rate for homeowners that met the Nations Home Affordable Modification Program guidelines,” and that NHMC was located on “Capitol Hill” in Washington, D.C. In fact, as Rosofsky admitted, NHMC did not have attorneys or forensic accountants on staff, it did not have a high success rate of modifying loans, it had no connection with the U.S. Treasury Department’s “Making Home Affordable” program, and its only presence in Washington, D.C., was a rented post office box. These false claims were made in solicitation letters that were mailed throughout the country to individuals behind on their mortgage payments and encouraged struggling homeowners to call a toll-free number to purchase NHMC’s loan modification services.

Read more…

Loan Modification

“Our tests have shown that many homeowners who are severely underwater on their mortgages will respond positively to a loan modification offer that includes reduction of their principal balance, increasing the rates of acceptance of HAMP trial loan modification offers, conversion to permanent loan modifications and long-term success of the homeowner,” said Jack Schakett, credit loss mitigation executive for Bank of America Home Loans.

“Encouraging more borrowers in this situation to accept a homeownership retention solution may help stabilize the surrounding community to the benefit of neighboring homeowners.”

In the first round of outreach, letters outlining the program and requesting financial information are being sent to certain NHRP-eligible homeowners who are more than 120 days overdue on payments.

“We met our goal to begin offering this program in mid-May, providing opportunities for customers who are in the most imminent danger of foreclosure to begin trial loan modifications by the end of June,” said Schakett. “At the same time, we are aligning the NHRP enhancement with some guidelines we expect to be included in the government’s program when it is rolled out in the coming months.”

As part of the alignment, Bank of America may offer earned principal forgiveness over a five-year period, as it announced in March, or over the three-year timeframe that Treasury intends to include in its HAMP principal forgiveness design, depending on individual borrower situations.

Please visit Orange County Real Estate for your Southern California realtor needs.

Loan Modification Loan Modification

An Irvine attorney and his business partner have been arrested for defrauding over 400 victims in a $1.25 million loan modification scam that targeted distressed homeowners, the Orange County District Attorney’s Office said Friday.

Prosecutors said inactive attorney Christopher Lee Diener, 42, and his partners Stefano Joseph Marrero, 40, and Terrence Green Sr., 43, are each charged with one felony count of conspiracy to commit grand theft and 97 felony counts of grand theft by false pretense.

They also face sentencing enhancements for white collar crime and excessive taking, and, if convicted, could receive a sentence ranging from probation up to 70 years in state prison.

Diener and Green were arrested this morning and are being held on $1.5 million bail each. They must prove the money is from a legal and legitimate source before posting bond, and prosecutors said the two are expected to be arraigned tomorrow. A $1.5 million warrant has been issued for Marrero’s arrest.

Beginning in March 2008, the defendants allegedly defrauded hundreds of victims by offering loan modification services in exchange for advance payment.

Marrero and Green were business partners and Diener acted as attorney for their businesses. The three are neighbors in Ladera Ranch and are accused of operating loan modification businesses under the names Home Relief Services, LLC, US Loan Mod Processing, HRS Communications, The Diener Law Firm, and Diener Law Group.

Loan Modification, Scams

People seeking loan modifications beware — most of the companies that offer them are not licensed, and some are set up just to steal cash.

Over a six-month investigation, 5 Investigates found dozens of people victimized by scam loan modification companies.

Fernando Sanchez was one of the victims. He was barely making ends meet when he heard about an opportunity to reduce his mortgage, from $2,300 per month to $900 per month.

“They told me to go to this meeting to see what it was about … and these people allegedly have an attorney and a translator,” he said.

Sanchez paid $1,000 to sit in a garage in a residential neighborhood set up with tables and chairs for the meeting. The attorney charged $6,000 for the loan modification.

To read the full article go here to kpho’s website.

Mortgage

27 existing centers have served 60,000 families already

NEW YORK - Chase today announced that it is opening 24 more Chase Homeownership Centers in the next four months to provide face-to-face help to thousands more homeowners who are struggling with their mortgage payments. That will bring the total to 51 Chase Homeownership Centers in 14 states and Washington D.C.

“Our first 27 centers have proven to very effective in reaching families who are facing financial hardship and have fallen behind on their mortgages. So, we are adding more locations to help more homeowners with their loans, including working with them to complete and assemble all the documents we need to provide permanent payment relief” said Charlie Scharf, head of Retail Financial Services at Chase, the consumer business of JPMorgan Chase.

Chase is the only major mortgage servicer that has opened a large network of face-to-face centers to help struggling homeowners understand their options and help pull together paperwork for loan modifications. Borrowers can schedule appointments or simply walk in six days a week. In 11 months, Chase Homeownership Centers have served more than 60,000 borrowers.

Using languages including Spanish and Vietnamese, center staffers also reach out to homeowners through hundreds of community foreclosure-prevention fairs and through non-profit counselors. In addition, Chase has mailed 538,000 letters to struggling borrowers living near a center.

Responding to the needs of homeowners who have been hit hard by the housing and economic downturns, Chase will have centers in six new markets:

* Cleveland, 1500 West 3rd St.
* Dallas, 12750 Merit Dr.
* Houston, 11550 Fuqua St.
* Boca Raton, Fla.
* Ft. Lauderdale, Fla.
* Seattle, Wash.

In addition, Chase will open 18 Chase Homeownership Centers to supplement existing centers. A total of seven new Chase Homeownership Centers will be in California, bringing the total number of Chase centers in California to 16; the six additional Florida centers will make the total 11.

In 2009, Chase approved more than 568,000 new trial modifications under the U.S. Making Home Affordable Program, its own modification program and Fannie Mae, Freddie Mac, VA and FHA programs.

For information, borrowers struggling with Chase, WaMu or EMC-serviced loans can go to www.chase.com/myhome or call (866) 550-5705.

Chase services about 10.3 million loans, including about 8 million loans for investors.

About Chase
Chase is the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (NYSE: JPM), which operates more than 5,100 branches and 15,000 ATMs nationally under the Chase brand. Chase has 146 million credit cards issued and serves consumers and small businesses through bank branches, ATMs and mortgage offices as well as through relationships with auto dealerships and schools and universities. More information about Chase is available at www.chase.com.

Loan Modification, Mortgage

President Obama’s new Making Home Affordable Plan makes getting a Wells Fargo loan modification easier for many struggling homeowners.  The federal government loan program offers financial incentives to lenders like Wells Fargo, to offer loan modifications to their borrowers.  In fact, Wells Fargo has recently increased their home retention staff to meet the demands of an increased need for loan modifications. A loan modification results in lower monthly payments, making it easier for homeowners suffering a financial hardship to meet their monthly payments and save their homes from foreclosure.

What if you have already applied or been turned down for a Wells Fargo loan modification?  Even if you have previously applied, you can still apply under the federal Making Home Affordable Plan.  You just need to become familiar with the eligibility requirements and make sure to fill out a complete and accurate loan application package.

A Wells Fargo loan modification may involve a reduction in the interest rate you are paying on your loan, having your loan term extended for up to 40 years, or having part of your principal balance deferred.  These loan modification options may be available to you and result in a new loan payment that is 31% of your monthly gross income.    Under the Obama Making Home Affordable Plan, you do not need to negotiate a loan modification agreement.  Everyone is given the same options, as long as you qualify.  However, you still do need to submit an accurate and complete loan modification application.

There are also representatives available to help you through the Housing and Urban Development Department (HUD).  The counselors will help explain the program but do not help you with completing your Wells Fargo loan modification application.  So you will still need to take the time to become familiar with Wells Fargo’s loan modification application requirements and the loan modification process in general to ensure that your application is filled out properly to give yourself the best chance of having Wells Fargo approve your loan modification request.

If you are interested in applying for a Wells Fargo loan modification, you will need to be prepared to write an effective hardship letter, stating clearly and concisely what your financial hardship is that is making it difficult to make your current monthly mortgage payments.  You will also need to be able to provide proof of your income and expenses as well as fill out all the forms in the Wells Fargo loan modification application in an accurate and complete manner.  Taking time to learn about the loan modification process and submitting an accurate, complete and persuasive loan modification application will greatly increase your chances of your Wells Fargo loan modification being approved.

Loan Modification, Mortgage