Loan Deals: News

The Oregon Attorney General’s Mortgage Fraud Task Force this week indicted a Salem mortgage broker on charges of mortgage fraud, aggravated theft, forgery and identity theft.

Julian James Ruiz III, 38, is the manager and owner of American Home Modifications, a Salem-based loan modification company. He faces 17 counts of first degree aggravated theft, mortgage fraud, identity theft, aggravated identity theft, forgery in the first degree and criminal possession of a forged instrument in the first degree.

“We intend to prosecute mortgage fraud aggressively. If you cheat vulnerable Oregonians facing foreclosure, we will hold you accountable,” said Attorney General John Kroger in his announcement of the indictment.

Kroger said this was the first indictment by his office’s task force.

He added that Ruiz will not be able to complete the loan projects with his customers, who are advised to talk with a HUD-approved counselor to avoid pending foreclosure or defaults. Consumers can call 800-SAFENET or 800-723-3638 to find a counselor, including Spanish-speaking counselors, at: http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=OR.

Loan Modification, Scams Loan Modification

I am not a large fan of Loan Modification companies. Being a resident of Orange County, California, having worked for many mortgage companies, and loan modification companies and seeing firsthand what is happening and , pardon my language , but knowing what pieces of shit actually run these places makes me sick to my stomach.

But what about the places the pieces of shit actually help?

There are countless stories about Obama’s plan failing, and in case you have been living under a rock then let me update you. Obama’s plan has failed miserably. Recently second-most powerful Democrat in the Senate called the Obama administration’s mortgage modification program a “waste of time”. Others are voicing their opinion at the banks for their un-willingness to help, and last but not least the FTC is going after the “pieces of shit companies” that actually might be helping these borrowers?

With banks like Bank of America only modifying up-to 7% of the loans eligible for the government’s Making Home Affordable Program, what makes the FTC and attorneys think that these loan modification companies are actually scams?

Let me play devils advocate here. Once again I am not a fan of Loan Modification companies, in fact, I probably hate them more then the FTC and the government… but let’s for one second pretend that they are actually trying to help home owners.

Recently the California Attorney General released information on “Operation Loan Lies”, a task force that took down some suspected loan modification scam companies. One of the companies according to the press release found here opened some 2960 loan modification files but only completed 311 of them. Wait… what? That’s over 10%. What about BofA’s 7% closing ratio?

The press releases like the one above and others go on to say companies “fraudulently charge upfront fees” to d loan modifications and fail to complete the work.

What if, the problem here isn’t necessary the loan modification companies, but the banks?

The FTC is actively going after loan modification companies who they claim are really scams, but fact remains is most of these home owners that are being helped would probably be losing their homes if it weren’t for these scammers.

Another company in California, Castle Home Loans, is also accused of failing to modify loans. However the press release and article show that they in fact have helped customers with their loan modification, just not enough to stay under the radar apparently.

I think one large point that nobody seems to remember is a lot of the home owners that are having this problem in the first place should have never gotten a home to begin with, through fraudulent means or other. Option Arm’s SISA 95% LTV. Really?

Anyway, fact remains is shit is hitting the fan, I just think that people NEED help and the FTC and DOJ should be selective about who it closes down. A company that has modified 10% of their loans has an active pipeline, and people who are working on files somehow seem like one of the good guys.  Unlike the BofA’s out there who are refusing to help even with guaranteed  funds from the government.

Loan Modification, Mortgage, Scams

Yep. There’s a big difference between writing down the loan balance on a house, and merely setting up an “extend and pretend” repayment plan. If you can’t afford the house now, you’re probably not going to be able to afford it later, especially with all the new fees added on.

The problem is the same one that has plagued loan modifications from the start: Lenders don’t want to write down loan balances. There’s no cramdown provision in bankruptcy court to force them to do so, thanks to opposition in Congress and inaction by the Obama administration.

Yet, as loan modifications fail to stem the foreclosure crisis, the government continues to offer financial incentives to servicers and calls them to Washington occasionally to give them a hard time about not doing more loan mods.

And in the end, here’s what we’re left with, according to USA Today:

Loan Modification

The Federal Deposit Insurance Corporation (FDIC) has announced that it is releasing a free toolkit of information that will help borrowers, community stakeholders and the banking industry avoid unnecessary foreclosures and stop foreclosure “rescue” scams that promise false hope to consumers at risk of losing their homes. The tool kit includes critical information to help borrowers know who to contact and what documents they need to have available to apply for a loan modification that could save their home from foreclosure. This toolkit also describes the warning signs of potential foreclosure “rescue” scams and how consumers, community stakeholders, and bankers can report scammers and prevent fraud.

Raising consumers’ awareness of foreclosure “rescue” scams will give borrowers more confidence in knowing they are working with legitimate counselors and servicers to obtain a loan modification that could help them avoid foreclosure.

The FDIC’s foreclosure prevention toolkit includes:

? Is Foreclosure Knocking at Your Door? brochure, which encourages consumers facing financing difficulties to contact their servicer, apply for a loan modification, and talk to a counselor.
? Beware of Foreclosure Rescue Scams brochure, which provides information on common scams, tips for detecting fraudulent deals, and resources for reporting criminal activity.
? Spring 2009 edition of FDIC Consumer News, which features advice for consumers on avoiding foreclosure rescue and loan modification schemes.
? Your Own Home module of the FDIC’s Money Smart curriculum, which offers tips and advice on avoiding foreclosure with a loan modification, preventing foreclosure “rescue” scams and providing legitimate sources of foreclosure prevention assistance.

For more information please visit: http://www.fdic.gov/foreclosureprevention

Loan Modification, Mortgage

The co-owner of a Campbell consulting firm has been arrested on charges he defrauded hundreds of people whose homes were in foreclosure through a loan modification scam. His partner is wanted for the same felony charges.

Rene Alvarez, 39, of San Jose was taken into custody Thursday by investigators from the Santa Clara County District Attorney’s Office. The investigators are looking for co-owner Mariano Ortega, 34, also of San Jose.

The two have owned M & R Contemporary Solutions since mid-2008.

They lured 500 homeowners throughout California, mostly Hispanic, to participate in a “principal reduction” program that may have generated more than $2 million in fees for the company, according to the district attorney’s office.

Prosecutors say Alvarez and Ortega promised clients they could save their homes from foreclosure by arranging the purchase of their loan by a third-party at a discounted rate. They offered the clients a new principal loan that would lower their monthly mortgage payments, authorities said; the clients paid thousands of dollars each in fees upfront.

But according to former M & R employees, no homeowner was ever helped, the district attorney’s office said in a news release.

Investigators served search warrants at the company’s two Campbell offices. M & R’s bank accounts have also been frozen in an attempt to recover some of the money, the district attorney’s office said.

Prosecutors asked anyone with information on Ortega’s whereabouts or the case to contact Bob Traskowski, an investigator with the district attorney’s office, at 408-792-2938 or btraskowski@da.sccog.org.

source of article is sj news

Loan Modification, Scams

WASHINGTON – Today, the Obama Administration released its first monthly Servicer Performance Report detailing the progress to date of the Making Home Affordable (MHA) loan modification program.  The purpose of the report is to document the number of struggling homeowners already helped under the program, provide information on servicer performance and expand transparency around the initiative.

On February 18, the Obama Administration announced its comprehensive plan to stabilize the U.S. housing market.  Two weeks later on March 4, the Administration published detailed program guidelines and authorized servicers to begin modifications immediately.  MHA provides $75 billion for sustainable mortgage modifications through the Home Affordable Modification Program (HAMP). 

MHA has made rapid progress in a few short months.  Servicers covering more than 85 percent of loans in the country are already modifying loans under the program. More than 400,000 modification offers have been extended and more than 230,000 trial modifications have begun.  This pace of modifications puts the program on track to offer assistance to up to 3 to 4 million homeowners over the next three years, our target on February 18.  

Today’s report discloses performance on a servicer-by-servicer basis in order to increase transparency for participating institutions.  The data show that servicer performance has been uneven.  The Administration has asked servicers to ramp up implementation to a cumulative 500,000 trial modifications started by November 1, 2009. This would more than double in three months the number of trial modifications started in the first five months of the program.   

The Administration is taking additional steps to improve performance.  On July 9, Treasury Secretary Tim Geithner and Housing and Urban Development Secretary Shaun Donovan wrote the CEOs of participating servicers calling upon them to redouble their efforts to increase staffing, improve borrower response times and streamline the application process.  Senior Administration officials discussed the importance of these steps in a face-to-face meeting with servicer executives on July 28.  The Administration will develop more exacting metrics to measure the quality of borrower experience, such as average borrower wait time for inbound inquiries, completeness and accuracy of information provided applicants, and response time for completed applications.  As an additional protection for borrowers, the Administration has asked the program compliance agent, Freddie Mac, to develop a “second look” process to audit MHA modification applications that have been declined on an ongoing basis.

To view the full report in pdf click here

Loan Modification, Mortgage

Earlier we reported the though to be scam of a company 21st Century Legal Services of Irvine was in trouble with the state of North Carolina. Now it appears they are also in trouble with the state of Wisconson according to josonline.com

“It’s pretty obvious this is a fishy operation,” said notary public Paul Mees, who was contacted by 21st Century to handle a loan modification.

Mees and Zana Darrow, another notary public, complained to the state consumer protection bureau and Department of Financial Institutions.

They were suspicious because 21st Century insisted that the notaries not leave any paperwork with the customers, even copies of documents the customers signed.

The company uses Yahoo e-mail addresses for its employees, and the name of the firm seems to be in flux. A woman who answered the phone said the company was called Transitional of America. Another man said it would soon be going by Fidelity National.

Public Investigator got ahold of Garrett Reed, a supervisor at 21st Century.

Reed said he’d look into Gibas’ case but never called back and didn’t return follow-up calls. At least five other messages left for representatives of the company were not returned.

In an earlier interview, Reed insisted the company is legitimate and has negotiated many loan modifications. Problems pop up only when consumers aren’t truthful about their income or financial situation, he said.

 

Loan Modification

In what is being called “Operation Loan Lies”, the FTC has gone after some 173 companies in twenty-three states nationwide for loan modification scam’s and fraud.

Some of the companies involved in the operation:

Lucas Law Center allegedly used an attorney to circumvent state prohibitions against receiving a fee before providing any services; the defendants charged up to $3,995 in advance. In addition to falsely representing that they would obtain mortgage loan modifications, the defendants told some homeowners to stop paying their mortgage in order to pay the defendants’ fee. Consumers obtained promised refunds only after repeated complaints to the Better Business Bureau, the California Attorney General, the State Bar of California, or local criminal authorities. The court immediately barred the practices and froze the corporate defendants’ assets, pending a hearing.

Loss Mitigation Services marketed primarily through direct mail solicitation. The defendants allegedly targeted consumers whose mortgage payments have increased, who have made late payments, and whose homes were in foreclosure. They charged up to $5,500 in advance and promised that a loan modification was assured or virtually assured if consumers hired them. The defendants also misrepresented that they were a department of, or affiliated with, the consumer’s lender or mortgage servicer. In many cases, they failed to obtain loan modifications for consumers, some of whom lost their homes while waiting for the promised results.

The FTC alleged that Internet company Apply2Save charged consumers up-front fees of up to $995, claiming they could obtain a loan modification in 30 to 90 days. In fact, they did not obtain loan modifications for most consumers and were unable to stop foreclosures. In most cases, the defendants failed to contact or follow-up with consumers’ lenders. Consumers waited months with no action on their loans, while the defendants lied and told them that the lenders had lost their papers. The defendants have agreed to a court order barring further unlawful practices, pending trial.

In addition to these cases, the FTC reached a settlement with Foreclosure Solutions, LLC and Timothy Buckley, who claimed that, for a fee often exceeding $1,000, they would stop foreclosure (see press release dated April 29, 2008). Many consumers who paid the fee ultimately lost their homes, and others avoided foreclosure only through their own efforts. The settlement order prohibits the defendants from misrepresenting that any foreclosure can or will be stopped, postponed, or prevented, or the likelihood that these results will be obtained; the degree of past success of any efforts to achieve these results; the likelihood that a consumer will receive a full or partial refund if these results are not obtained; an ability to help all consumers, regardless of their individual circumstances; the number of satisfied customers or customer complaints; the terms of any refund or guarantee; and any other fact material to a consumer’s decision to purchase a foreclosure rescue service.

You can read the entire press release here

Loan Modification