Loan Deals: News

Attorney General Bill McCollum sued a South Florida loan modification firm and its affiliated companies this week, alleging they violated state law by charging fees for foreclosure rescue services.

The civil lawsuit was filed in Broward County Click here for restaurant inspection reports Circuit Court on Thursday, against Keep Your Property, its owners William R. Colon and Carlos A. Hernandez, and Centro de Prevencion y Educacion Corazones Unidos H.I. Visida Inc., a nonprofit organization, and Economic Alliance Group. The suit alleges they violated state laws prohibiting deceptive and unfair trade.

Colon and Hernandez couldn’t be reached to comment.

Consumers told state investigators that they paid an upfront fee of $2,200 and monthly fees of $550 after the company guaranteed to file all the paperwork required to prevent foreclosure action or lower mortgage payments. But many consumers found later that the company failed to contact lenders and take any action on behalf of homeowners

Loan Modification, Scams

I think its time to make a Fraud News Section =(

According to the Commission, the defendants advertised, marketed, and sold mortgage loan modification services to consumers nationwide using Web sites including newhopemodifications.com and hopenowmod.com. The FTC charged the defendants with violating federal law by misrepresenting that they could obtain mortgage loan modifications for consumers in all or virtually all cases and that they would refund consumers’ money if they did not.

The FTC also charged the defendants with making false claims that they are affiliated with, or part of, the HOPE NOW Alliance, a non-profit organization that is a broad-based coalition of credit and home ownership counselors, lenders, investors, mortgage market participants, and trade associations. The HOPE NOW Alliance offers free assistance to homeowners who may not be able to pay their mortgages and need help working with their mortgage company or loan services. Seeking to capitalize on its name, the defendants called their firms New Hope Modifications and Hope Now Modifications, and used telephone numbers that included “HOPE,” to mimic the real HOPE NOW Alliance hotline which is 888-995-HOPE.

 

Read the article here

Loan Modification, Scams Loan Modification Fraud

I don’t know why common sense is lacked by most people these days. Guys, because Obama is on TV saying he will help doesn’t mean the mom pop loan modification company will. In fact, I am willing to bet that less than 10% of the Loan Modification Companies in California are operating legally. Let’s forget my opinion for a minute, I know 9 loan modification companies here in Orange County - and not one of them is operating legally. 100% of all the companies I know personally are operating illegally. Don’t be surprised.

From ABC:

Foreclosures are at an all-time high, especially here in California, so it’s no surprise that loan-modification businesses are booming. The only problem is that a number of those companies are considered scams. Now ACORN, a non-profit organization helping people get out of loan trouble, claims that one of those businesses is in Buena Park. ACORN alleges that business is one of those scams.

Wednesday afternoon, about 30 protestors, mostly loan-modification clients of Center Legal, a loan modification company in Buena Park, gathered in the parking lot. Then they headed to the offices of Center Legal to accuse the company of fraudulently charging them thousands of dollars for services not performed. The protestors wanted to demand their money back.

But along the way, about 15 of the protestors, including members of ACORN who organized the event, and an ABC7 photographer, got trapped in a building elevator for more than half an hour.

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Loan Modification, Scams Loan Modification

From the article:

Named in the suit filed Wednesday in Miami-Dade Circuit Court are: Mortgage Crisis Solutions Association, Property Solutions Specialists, One Source Communications and Nationwide Financial Partners. Principals Donald R. Gillette and Flynn McCarthy also were sued.

The defendants are accused of charging homeowners in foreclosure as much as $2,995 for loan-modification services but not providing any services. The attorney general’s office also accuses the defendants of offering legal services to customers, which it says constitutes the unauthorized practice of law.

The state obtained an injunction freezing the assets of Mortgage Crisis Solutions and Gillette, identified as the company’s owner.

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Loan Modification, Scams Loan Modification

Better Business Bureau is warning people who have been solicited by unknown companies to help reduce their mortgage payment through a loan modification or by refinancing their mortgage to do their research first.

BBB has received numerous calls this year from consumers who are confused by the advertisements and offers they have received to lower their loan interest rates.

“A large portion of homeowners are being contacted by companies that offer too-good-to-be-true promises, like a guaranteed result in reducing a payment or modifying a loan,” said BBB President/CEO Matthew Fehling. “While there are reputable companies that can work with a mortgage lender, homeowners need to be aware of who they are doing business with so they do not fall victim to a scam company.”

A loan modification is a permanent change in one or more terms of a mortgagor’s loan. The modification can range from a direct change in interest rate to the amount owed on the loan; the loan stays with the same company. Refinancing a mortgage might include changing the loan servicing company and requires fees to be paid, including for a home appraisal.

Consumers looking to modify their mortgage loans or refinancing their mortgages should keep the following tips in mind before accepting any offers:

• Call BBB to check the company’s reliability report.

• Confirm any licensing claims of the company with the Arizona Department of Financial Institutions.

• Contact your current mortgage lender and inquire about options available to you. Modifying a loan is a process that homeowners can do for free, eliminating the need to hire a company to help you.

• In order to qualify for a loan modification or to start the process of refinancing, homeowners will need to submit financial documents to the mortgage lender that shows they have the ability to make the payments.

• Homeowners should never follow advice that tells them to “stop paying a monthly mortgage payment.” A reputable loan modification company will tell a homeowner to continue making payments as long as possible.

• Homeowners should not pay upfront for a loan modification. Similar to a loan refinancing application, any fees should be paid once the loan modification is approved and closed.

If you are being offered a loan modification service; feel you have been a victim of loan modification fraud or a refinance option that sounds too good to be true, contact your BBB and check out the company at arizonabbb.org or by calling 1-602-264-1721.

Loan Modification, Scams

We have been saying this for quite some time now, almost a year. But its still good when we read articles that agree with us =). The Seattle times by way of the New York Times has an article called “Swindlers swarm to foreclosures” which talks about Loan Modification scams.

Borrowers seeking loan modification are often frustrated that they cannot reach the right people at their lender or that the lender insists on a repayment plan they cannot keep, said Ira Rheingold, executive director of the National Association of Consumer Advocates.

“When you’re desperate, that’s when the crooks come out,” Rheingold said.

“You’ve tried everything, and a guy calls you up on the phone or there’s an ad on TV, and you have no other options, what do you do? You go to those guys,” he said, adding:

“People probably know in their heart of hearts that they may be getting ripped off, just like most people understood on their mortgages that they were getting in too deep, but bankers said yes, so it must be OK. It’s the same thing. The real problem is that we continue to fail to have systems in place that help people,” Rheingold said.

Rosenau, the California prosecutor, said that even when she told people that they had been swindled, “they don’t believe it, because they want it not to be true.

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Loan Modification, Scams loan modificatio, Scam, Scams