Loan Deals: News

On the same day that the state of California proves that it cares (something we very much doubted the last few years) by going after 23 loan modification scam companies, New Jersey tries to do the same. Well, sort of..

Philly.com is reporting that the state has gone after two (not twenty), but two corporations involved in what they say is loan modification fraud.

“In both cases, the defendants took advantage of desperate people who looked to them for help,” Milgram said. “They gained the trust of their victims through deceptive advertising and misleading sales pitches, then collected thousands of dollars in unlawful fees and provided nothing in return but empty promises and added financial misery.”

Named in the first case are attorney Ejike N. Uzor, who practices in Linden and Newark, and Stephen Pasch of Green Brook Township.

The complaint accuses Uzor and Pasch, along with seven corporations, of violating fraud, advertising, and federal debt counseling laws.

According to the lawsuit, from roughly September 2008 through March 2009, the Newark-based companies used Web-based advertising, radio ads and telephone calls to find homeowners in financial straits.

 Loan modification scams are nothing exclusive to just california.

In the second case, the state accused mortgage lender BIRMCO, based in Haddon Township, of similar offenses dating back to November 2008.

Milgram said BIRMCO used direct mail solicitations, which included a homeowner’s specific mortgage information, to urge distressed homeowners to call.

Customers were promised that BIRMCO would negotiate a lower interest rate and lower monthly payments. Like the other lawsuit claimed, consumers were charged an upfront fee of several thousand dollars and promised a refund if BIRMCO failed to obtain a modified loan agreement. Customers were again told to stop making mortgage payments and to avoid contacting their lenders , purportedly to strengthen their position in seeking loan modification.

Loan Modification

The state has just recently gone after some 21 loan modification companies for various charges, all comes down to “possible scam companies”.

“The loan modification industry is teeming with confidence men and charlatans, who rip off desperate homeowners facing foreclosure,” Brown said in a release. “Despite firm promises and money-back guarantees, these scam artists pocketed thousands of dollars from each victim and didn’t provide an ounce of relief.”

“The loan modification industry is teeming with confidence men and charlatans who rip off desperate homeowners facing foreclosure,” he said. “Despite firm promises and money-back guarantees, these scam artists pocketed thousands of dollars from each victim and didn’t provide an ounce of relief.”

Brown’s lawsuit contends that the defendants violated a few laws including:

• California Business and Professions Code section 17500 by claiming a 95 percent success rate and promising consumers significant reductions in the principal balance of their mortgages;
• California Business and Professions Code section 17200 by failing to perform on promises made in exchange for upfront fees;
• California Civil Code section 2945.4 for unlawfully collecting upfront fees for loan modification services;
• California Business and Professions Code section 2945.3 by failing to include cancellation notices in their contracts;
• California Civil Code section 2945.45 by not registering with the Attorney General’s office as foreclosure consultants; and
• California Penal Code section 487 for grand theft.
• Violated California’s credit counseling and foreclosure consultant laws, Civil Code sections 1789 and 2945
• Inserted unconscionable terms in contracts;
• Engaged in improper running and capping, meaning that Roth improperly partnered with United First, Inc. and Noe, who were not lawyers, to generate business for his law firm violating California Business and Professions Code 6150; and
• Violated 17500 of the California Business and Professions Code.

source: press release

Loan Modification

the National Consumer Law Center has just released a report “loan modification scammers step in when loan servicers refuse to provide relief”. The report, available here via pdf states what we have been pointing out for a very long time. Loan Modification scams are here and very real. Please , if you are going to be doing a loan modification, DO IT YOURSELF!

As the number of foreclosures continues to grow, a new “industry” has emerged seeking to profit from desperate homeowners who are trying to save their homes. For-profit loan modification services claim to help homeowners obtain changes in the terms of their mortgage loans that will make the loan more affordable and, thereby, help the homeowner save their home from foreclosure. Unlike older foreclosure rescue scams that seek to bilk homeowners of their equity, loan modification scams are more interested in homeowners’ spare cash. They make extravagant and unverifiable claims regarding their ability to help but too often the homeowner gets nothing after paying thousands in fees they can ill afford to spare.

While waiting for loan modifiers to deliver the promised relief, homeowners not only lose their money but may also fall deeper into default and lose valuable time that could have been spent negotiating directly with their mortgage servicer or by going to free a HUD-certified housing counseling agency with true expertise in avoiding foreclosure. For-profit loan modification companies are flourishing because mortgage loan servicers cannot or will not meet borrower need for assistance with their mortgages.

Loan Modification

kcra has an article titled Loan Modification Companies Under Microscope where it looks at two loan modification companies, Loan Review Inc and Resolution Mortgage Group for illegal activity.

Last year, the department had 10 open investigations into loan modification companies. As of July, it has more than 800 and has already taken action against 200 companies for unlicensed or illegal activity.

According to the law, brokers can only take up front fees if they have an advanced fee agreement reviewed with no objection on file with the California Department of Real Estate.

“Their promise to me was they will modify the loan on my house,” said Brian Glasglow, a homeowner who hired Roseville-based Loan Review Inc. and another company called Resolution Mortgage Group.

Glasglow paid $2,000 up front, or $1,000 to each company. He said they did nothing to help him secure a loan modification on his home.

According to the Department of Real Estate, only licensed real estate brokers and attorneys can perform loan modifications in California.

Loan Modification

A not so informative article lists a few companies in southern florida that are currently “under investigation” according to them for loan modification scams

Keep Your Property Inc. of Hialeah; National Foreclosure Management Inc., no address given; Mortgage Crisis Solutions Association LLC and Property Solutions Specialists Inc., of Miami; Oceanview Investment Services Corp. and Oceanview Financial Services Corp. and Financial Powerhouse Services Inc., all of Fort Lauderdale; A Realty RX LLC of Coral Springs; FHA All Day.com Inc. of Delray Beach; Lincoln Lending Services LLC of Miami; Outreach Housing LLC and United Home Front of Fort Lauderdale

You can read the article here

Loan Modification

Something we already know is that loan modification scams are on the rise. What is intresting about htis is - so is the number of new loan modification companies - meaning that the general public still doesn’t realize that chances are the company they are talking to is a scam.

The company was called American Mortgage Modification and it claimed after an upfront fee of a few thousand dollars, it could lower monthly payments by negotiating a loan modification.

Its sad but we do see this daily.

They’re in all cities, in all the Tidewater area,” Tierney told WAVY.com

They’re scammers, Tierney says. And they are costing local homeowners millions in potential loan loss.

Former President of the Tidewater Mortgage Brokers Association, Steve Rockafeller, told us some simple number crunching can prevent scammers from making a move. “There’s a debt to income requirement that’s required for a loan modification to occur, sometimes they go up to 100 percent,” said Rockafeller.

So, if you know your debt-to-income ratio is more than 100% and a loan modification company is still anxious to get you signed, very likely something is wrong.

Read the article here

Loan Modification

COLORADO SPRINGS - It was seen as a way for homeowners behind in their mortgage payments to catch up. Earlier this year, President Obama signed a bill that would allow certain homeowners heading into foreclosure to modify their loans. It was welcomed news and millions called their banks to see what could be done.

“I was hoping my mortgage company would be able to help me out, ” with a loan modification, says Richard Marcus of Colorado Springs. Like many others, he was denied. “I knew I was going to lose hours at work and I knew I wouldn’t be able to keep up with two mortgages.”

Both mortgage companies told him that he didn’t qualify under the new plan, so he turned to Federal Loan Modification Law Center, out of California. “I thought they would be doing their job. I got a referral, its not like I just found them on the Internet.”

The Law Center told him they get a Loan Modification on both mortgages; all they needed was proof of employment and $1,500.

Marcus waited for good news from the company, but never heard back. “I started calling and left three messages,” he said. He even tried to call as a new customer, but again, no calls back.

“I haven’t heard anything in over two months.”

According to the BBB in California the company has an “F” rating, something Marcus found out after the fact. Complaints NEWSCHANNEL 13 was able to view show the company failed to provide services promised and out of the 201 complaints, the company only responded to 36.

The Federal Trade Commission is also after the company. In April, the F.T.C filed a complaint in Federal Court. Two weeks later, a cease and desist order was filed to stop the company from advertising on the radio.

According to the F.T.C. those radio ads suggested that the law firm had some ties to the Federal Government, which it doesn’t.

The F.T.C also alleges the company failed to return consumers’ calls or provide updates about the status of their modification loan. The company is also accused of never even trying to contact the consumers’ mortgage company to modify the loans.

We left several messages to get Federal Loan Modification Law Center’s side of the story, but never heard back from the company.

As for Marcus, his family will soon be moving out of their home. His home is heading to foreclosure.

According to the BBB of Southern Colorado, you need to research any company before you sign up for service. In Colorado, it is illegal for a modification company to charge you an upfront fee for its services.

Loan Modification

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