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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You may view the full account of this posting, including possible attachments, in the News & Alerts section of our website at: http://ag.ca.gov/newsalerts/release.php?id=1937

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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

“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.

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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 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.

To read the full article click here

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.

Click here to read the full article

Loan Modification, Scams Loan Modification

From the article:

“Question 1 What is a loan modification?

A loan modification involves changing the terms on a mortgage to make the monthly payments more affordable.  This may include lowering the interest rate on the loan, extending the length of the loan, or in some cases principle forgiveness.  The goal is to help make the monthly mortgage payments more affordable for a homeowner facing financial hardship.

Question 2 How do I know if I am eligible for a loan modification?

The main thing you will need to demonstrate to your lender is that you have the ability to make the new modified payments according to the terms of a loan modification.  You will need to provide proof of your income and a financial statement that outlines your income and expenses that shows that you will be able to meet the revised monthly mortgage payments.”"

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Loan Modification, Mortgage, Uncategorized Loan Modification, modification questions

Should You Hire A Loan Modification Attorney?

If you are considering a loan modification to help lower your monthly mortgage payments you may be confused by all the loan modification services that are available.  New loan modification services and companies continue to crop up every day.  It can be confusing for the financially strapped homeowner to make a decision on how to proceed with a loan modification.  Many homeowners contact their lenders directly and complete the loan modification application on their own.  Others hire a loan modification company and still others hire a loan modification attorney.

Do you need to hire a loan modification attorney to represent you in your loan modification process?  There are times when an attorney can be a tremendous help in the loan modification process.  If your lender is not cooperating or is difficult to contact, a loan modification attorney may be able to provide the leverage you need to get through.  Other circumstances where a loan modification attorney can be helpful are when you feel you may have be a victim or fraud or predatory lending.  Finally, if you have tried to get a loan modification on your own and have been denied, a loan modification attorney may be able to help.  There are laws in place regarding unfair lending and an attorney that has experience with loss mitigation can help you in this area.

If you feel you may be the victim of fraud or unfair lending practices you should definitely seek the help of a loan modification attorney.  This can be used as leverage to get a loan modification approved or further legal action if that is necessary.

The disadvantage to hiring a loan modification attorney is the cost.  Attorneys usually require a large upfront fee for their services.  These fees are usually non-refundable.  It can be very difficult for financially strapped homeowners to come up with the money to pursue this type of legal action.

If you do not think you are the victim of unfair lending practice, fraud, or the denial of your loan modification application, a loan modification attorney might not be necessary.  You may be able to hire a loan modification company to represent you or even contact your lender directly and request a loan modification on your own.

With all the unsavory lending practices in recent years, it is good to know that a loan modification attorney is available if you should need one.  However, for routine loan modification requests, it probably isn’t necessary.

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