More arrests in Silicon Valley for loan modification fraud
I have said this many times, but my personal pet peeve is hearing of scammers who try to take advantage of people who are victims of these economically difficult times. It is bad enough that many homeowners are suffering and find themselves in a situation where they are unable to pay their mortgages. But far worse to believe they are victimized again a second time when they put their hopes on people who profess to be there to help. Sometimes even the lenders are engaged in practices that are bordering on scams called dual track foreclosure.
Every time one of these scammers is identified, I get worked up and get into my crime busting mode……. So here we go again.
The first tell tale sign of a fraud or scam is that the so called service providers are asking for payments up front, before any work has been performed. ALWAYS BE LEERY OF THESE REQUESTS. There are multiple variations of these pay-first scams.
A recent scam identified by the California Department of Real Estate (DRE) involves up front payment to join a class action lawsuit which promises extraordinary home mortgage relief. A brief description of the con has been reposted below for review purposes.
QUESTIONABLE AND/OR FALSE CLAIMS OF THE SO-CALLED MORTGAGE LOAN
DEFENSE OR “MASS JOINDER” AND CLASS LITIGATORS.
A. What are the Claims/Sales Pitches?
They are many and varied, and include:
1. You can join in a mass joinder or class action lawsuit already filed against your
lender and stay in your home. You can stop paying your lender.
2. The mortgage loans can be stripped entirely from your home.
3. Your payment obligation and foreclosure against your home can be stopped when
the lawsuit is filed.
4. The litigation will take the power away from your lender.
5. A jury will side with you and against your lender.
6. The lawsuit will give you the leverage you need to stay in your home.
7. The lawsuit may give you the right to rescind your home loan, or to reduce your
principal.
8. The lawsuit will help you modify your home loan. It will give you a step up in the
loan modification process.
9. The litigation will be performed through “powerful” litigation attorney
representation.
10. Litigation attorneys are “turning the tables on lenders and getting cash settlements
for homeowners”.
In one Internet advertisement, the marketing materials say, “the damages sought in your
behalf are nothing less than a full lien strip or in otherwords [sic] a free and clear house if
the bank can’t produce the documents they own the note on your home. Or at the very
least, damages could be awarded that would reduce the principal balance of the note on
your home to 80% of market value, and give you a 2% interest rate for the life of the
loan”
There are many varieties of scams identified and collected by the DRE over the years, some of them are listed below in the Consumer Alerts page for your benefit. http://www.yourhome.ca.gov/fraud_warning.pdf
Homeowners in distress, I know you are in desperate situation and are seeking any and all assistance you can find, but please don’t let your situation cloud your judgment. Be the wise consumer that you always have been. Please check on the people who profess their desires to help you. Know who you are dealing with before you give them any money.
Taking matters into your own hands
I have written on numerous occasions about the most despicable people on the planet, in my opinion, those scammer who prey on the desperation of homeowners who are about to lose their homes to foreclosure. These “loan modification” or “foreclosure rescue” specialists or consultants took upfront money and made grandiose promises of keeping the homes from foreclosing, yet in most cases, did nothing to stop the process.
Many claimed to be attorneys or affiliated with attorneys, as if such affiliations meant they were more legitimate than those who had no such affiliation. These scams had become so rampant that the California Department of Real Estate maintains a list of practitioners who are suspected of engaging in fraudulent manners and who have received desist and refrain orders.
On the national level, Congress has allocated funds to help fight these types of fraud. And California enacted similar laws to fight these heinous crimes against the vulnerable homeowners whose backs are against the wall.
But the crafty scammers manage to continually dupe homeowners into giving them money, without providing any services in return.
Well finally, someone refused to take it from these scammers and took the matter into their own hands. Feeling nothing was being done on their behalf and being denied a refund, the couple kidnapped the scammers and tortured them.
Now I am not advocating violence against anyone, but you can certainly empathize with the frustration and the betrayal these people must have felt before resorting to such extreme measures.
What can we learn from this tragic situation? Never ever give anyone money upfront to help you save your house. Any legitimate organization or person cannot take money first, but can only be paid if successful service was provided first (at least here in California) .
Loan Modification Scams
One thing I hate more than anything is a con artist trying to prey on people who are vulnerable. And one of the biggest con games out there is the “loan modification specialist” scam. It is especially bad here in California. Warning homeowners of these scams has been sort of a personal crusade for me and I have been writing about it for a little while.
http://activerain.com/blogsview/873859/beware-of-loan-modification-scams-
http://www.trulia.com/blog/stevemun/2009/06/beware_of_foreclosure_pr
http://activerain.com/blogsview/1166125/law-enforcement-finds-loan-modification-boiler-room-
I wanted readers of this blog to also be also aware of these scams and who may be perpetrating them.
Here is the list of people whom the California Department of Real Estate has served Desist and Refrain orders/and or accusations resulting from a loan modification and/or foreclosure rescue transaction. Please read the preamble on the web page for an explanation.
I am just re-posting this list (which is public record) and make no comments or judgments about these individuals or their activities.
Please, if someone says they can get your loan modified to stop the foreclosure process BUT WANTS MONEY UP FRONT, PLEASE DO NOT PAY! The upfront money request is a sure sign this is a scam. The California Department of Real Estate has mandated that “loan modification specialists” registered with them and who may engage in the business CANNOT TAKE MONEY UP FRONT, BEFORE PROVIDING THE SERVICE.
