Swindlers Find Growing Market in Foreclosures

January 15, 2009

Swindlers Find Growing Market in Foreclosures

As home values across the country continue to plummet, the authorities say a new breed of swindler is preying on the tens of thousands of homeowners desperate to avoid foreclosure.

Until recently, defrauders tried to bilk homeowners out of the equity in their homes. Now, with that equity often dried up, they are presenting themselves as “foreclosure rescue companies” that charge upfront fees to modify loans but often do nothing to stave off foreclosure.

The Federal Trade Commission brought lawsuits last year against five companies representing 20,000 customers, and state and local prosecutors have brought dozens more. In Florida, Attorney General Bill McCollum recently sued a company that he said had more than 600 victims.

“There’s no way for the consumer to sort out the legitimate companies,” said Mr. McCollum, who added that he had limited resources to fight what he called “a sheer volume question.”

The companies under suspicion typically charge an upfront fee of up to $3,000 to help borrowers get lower rates on their mortgages from their lenders. But borrowers often cannot afford the fees, the service can be bogus and, in the worst cases, the homeowners lose their chance to renegotiate with their bank or to file for bankruptcy protection because of the time wasted.

There are companies that provide legitimate foreclosure services, but the industry is largely unregulated, making it difficult for homeowners to separate the good from the bad. Some of the fraudulent companies — often run by former real estate agents or mortgage brokers — are local; others are national. Many have official-looking Web sites that suggest that the companies have government affiliations and give homeowners a false sense of security.

“That’s all I’ve been doing for the last year,” said Angela Rosenau, a deputy attorney general in California, citing more than 300 complaints about fraudulent companies last year, not counting those made to local prosecutors.

Experiences like those of Maria Martinez, of Stockton, Calif., are playing out with greater frequency across the country, the authorities say. Ms. Martinez struggled to pay her mortgage last summer. She had no shortage of people offering to help. Fliers for rescue companies filled her mailbox.

At a seminar for troubled borrowers near her home, one company offered a service that promised just what Ms. Martinez needed: for $1,000, the company said it would negotiate with her mortgage company to lower her interest rate.

“I was desperate,” said Ms. Martinez, 57, a clerk at the San Joaquin County Jail. She made an initial payment of $500 and paid another $500 a few weeks later.

Now the house is in foreclosure, and Ms. Martinez is waiting for the sheriff to evict her. She cannot reach the man she paid to modify her loan.

In California and 20 other states, including New York, companies are prohibited from collecting payment until they have completed their services, something Ms. Martinez did not know. In Colorado, the attorney general’s office has closed 15 mortgage rescue companies that charged fees up front.

Carol McClelland, 46, fell into foreclosure on her Chicago home when she lost her job as a waitress in two restaurants. She received a call from a company called Foreclosure Solutions Experts, promising to stop the foreclosure and lower her mortgage payments to around $550 a month, from $1,056, Miss McClelland said.

“She showed me other clients’ files, and they were paying $650 a month,” she said. The charge for the service was $1,300, which Miss McClelland paid in installments, borrowing the money from friends and relatives.

When the loan servicer notified her that the house was still in foreclosure, Miss McClelland said, the representative from Foreclosure Solutions Experts told her that the matter had been taken care of.

“She told me everything was all settled; I don’t have to worry about anything,” Miss McClelland said. “All I had to worry about was getting the rest of the money to her.”

According to a suit brought by the Illinois attorney general in November, Foreclosure Solutions Experts does little or nothing to help consumers, and when it does take action, the result is often a repayment plan unsuited to the borrower’s ability to pay. The suit alleges that the company never contacted Miss McClelland’s lender, HSBC.

Illinois is one of the states that bans upfront payments to foreclosure rescue companies. The attorney general’s office has received “thousands” of complaints about such companies, said Michelle Garcia, an assistant attorney general, and the suit against Foreclosure Solutions Experts is one of 22 filed by the state.

Stacy Strong, who runs Foreclosure Solutions Experts, did not return calls for comment.

Advocates say foreclosure rescue scams are particularly insidious because they prey on people’s desperation and because they victimize those who can least afford it.

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,” Mr. 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.

“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 O.K. It’s the same thing. The real problem is that we continue to fail to have systems in place that help people.”

Ms. 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.”

“And any money they had to possibly work with the lender is now gone to the scam,” she said.

In Baltimore, where neighborhoods have been buffeted by successive waves of mortgage scams, Ann Norton, director of foreclosure prevention at the nonprofit St. Ambrose Housing Aid Center, said companies promising loan modifications started to multiply last summer.

“It’s the same people that joined the industry during the refinance boom, and now they’re making fees for submitting loan remediation forms,” said Ms. Norton, whose agency provides free help to borrowers.

Although Maryland was among the first states to enact legislation defining mortgage rescue fraud, Ms. Norton said, “it’s a growing industry, and it’s under the radar.”

Often the scammers represent themselves as having connections to government groups, or copy the name and typography of the Hope Now program, an alliance of nonprofit, government and lending agencies, said Marietta Rodriguez, director of national homeownership programs at NeighborWorks America, a nonprofit group that provides free government-certified foreclosure counseling through 235 local organizations.

“Several took the Hope Now Web site and just reskinned it with their own information, or they use government seals,” Ms. Rodriguez said. “They’re very crafty, and their marketing strategies are aggressive.”

Peggy L. Twohig, associate director of the financial practices division at the Federal Trade Commission, said consumers should be wary of companies that promise results, charge upfront fees or tell them not to contact their lender on their own. Ms. Twohig said consumers could get the same help free from nonprofit housing counselors.

“Our advice to consumers is to contact their loan servicers directly or to call Hope Now or HUD-approved housing counselors,” she said.

Last year, Congress approved $180 million in grants to nonprofit housing counselors.

As Ms. Martinez awaits eviction, the temptation to try another foreclosure rescue specialist remains. “There’s other agencies that say they can help,” she said, “but I’m scared that I can’t trust them.

“One man said, ‘You have to be persistent,’ ” she said. “But I’m scared to get someone else, because they probably won’t help me, or can’t.”

16 Responses

  1. […] (ARM) Taking aim at mortgage scams Change Your Focus: Receive Foreclosure Services Directly Swindlers Find Growing Market in Foreclosures Recession […]

  2. Seidu call us, 410-257-5283 ASAP AND START PACKING YOUR BAGS! IF YOU ARE IN MARYLAND AND IN BK COURT, YOU HAD BETTER RUN LIKE HECK AND GET THE HECK !

  3. Hey Neil, why am I being blocked from replying to a blog? Thanks, Tim

  4. Seidu call us, 410-257-5283 ASAP AND START PACKING YOUR BAGS! IF YOU ARE IN MARYLAND AND IN BK COURT, YOU HAD BETTER RUN LIKE HECK AND GET THE HECK OUT OF THAT CORRUPT CLUB, THAT IS RIGHT, THE BK CLUB!
    IF YOU FILED A VOLUNTARY ACTION, YOU HAVE THE RIGHT TO DISMISS YOUR CASE AT ANYTIME…..THOUGH I AM NOT A LAWYER NOR GIVING LEGAL ADVISE OR ENGAGING IN THE ILLEGAL PRACTICE OF LAW,(NOTE, HOW STUPID THIS IS WE MUST DISCLOSE THIS IN ORDER TO DISCUSS THE LAWS WE ARE OBLIGATED TO UPHOLD, THE MAFIA HMMMMM!), BUT, THIS IS WHAT WE WERE FORCED TO DO AND DID! WE LEARNED IN OUR NIGHTMARISH AND HELL LIKE EXPERIENCES WITH THE GREENBELT MARYLAND BK AND CALVERT COUNTY DISTRICT COURTS IN ASSERTING OUR/YOUR CONSTITUTIONAL AND PROPERTY RIGHTS AND PROTECTIONS, THESE JUDICIARY BODIES ARE BROKEN AND CORRUPT AND ONLY WORK FOR BUSINESSES, CORRUPT LAWYERS, TRUSTEES, AND JUDGES! CITIZENS ARE NOT ALLOWED, SO JUST GO AWAY JOE CONSUMER AND CITIZENS AS THERE WILL BE NO JUSTICE FOR YOU AND ARE TO BE KEPT OUT AT ALL AND ANY COST!
    IT HAS BEEN HELL AND WAS AN ABSOLUTELY AWFUL ORDEAL! 20 DAYS BEFORE WE FILED OUR MOTION TO DISMISS AFTER THE CORRUPT SCUMMY JUDGE ORDERED OUR CASE CONVERTED FROM A CHAPTER 13 TO A CHAPTER 7, (THE PLAN TO STEAL OUR PROPERTY BY CONVERSION), OUR NEIGHBOR CAME UPON A MAN DRESSED IN CAMOUFLAGE ON OR AROUND NOVEMBER 20, 2006, JUST BEFORE WE DISMISSED OUR CASE FOR CORRUPT ACTIVITY AND COLLUSION BETWEEN OUR LAWYER, THE DOJ TRUSTEE AND THE CORRUPT JUDGE BUT, OUR NEIGHBOR CAME POUNDING AT OUR BACK DOOR WITH A 12 GAUGE HUNTING RIFLE IN TOW LOADED AND COCKED AND WAS SCREAMING TO WARN US THAT SHE HAD JUST SPOTTED AND CONFRONTED A MAN SPYING ON US DRESSED IN CAMOUFLAGE WITH BINOCULARS AND STANDING AT THE TIP OF OUR TWO PROPERTY LINES! THIS IS A TRUE FACT AND OUR NEIGHBOR, BLESS HER GOOD SOLE WITH TESTIFY ACCORDINGLY TO THIS FACT!
    THANK GOD OUR NEIGHBOR IS A CONFEDERATE FLAG FLYING, RIFLE TOUTING SOUTHERN MD GOOD OLD GAL WHO TAKES HOSTAGES LATER AND WILL POP A CAP IN YOUR ARCE FIRST AND THEN ASK QUESTIONS! SHE, THAT IS RIGHT READERS, CONFRONTED THIS SOB AND RAN HIS ARCE OFF THE PROPERTY CHASING HIM THRU HER 5 ACRES OF WOODS WITH HER LOADED 12 GAUGE HUNTING SHOTGUN COCKED AND READY! WE BELIEVE HE WAS THERE IN AN ATTEMPT TO GATHER SOME KIND OF EVIDENCE THAT WOULD CAUSE US HARM IN THE SCUMMY BK COURTS!
    THANK GOD WE NEVER LIED ABOUT ANYTHING IN OUR SCHEDULES AND FILINGS AND READERS, A WORD OF ADVICE FROM THE EXPERIENCED HERE, IF YOU ARE IN MD AND THINKING ABOUT FILING BK, MAKE DARN SURE YOUR CORRUPT LAWYER FILES YOUR SCHEDULE CORRECTLY AND THAT YOUR CONCEAL NOR YOU LIE ABOUT NOTHING AT ALL AS THIS IS BK FRAUD UNDER BAP AND YOU, MY LITTLE CONSUMER FRIENDS, WILL GO STRAIGHT TO JAIL, IF CONVICTED, AND YOU WILL BE CONVICTED IN MARYLAND FOR SURE! THE TRUSTEE AND BK COURTS WILL TAKE EVERYTHING YOU OWN AND COULD EVER HOPE TO OWN! ALSO, CONSUMERS, YOU ARE RESPONSIBLE FOR YOUR LAWYERS ACTIONS OR INACTIONS AND DOES NOT MATTER IF THE LAWYER MADE THE MISTAKE, YOU WILL PAY THE PRICE! IS THAT SMOOTH OR WHAT FOR THOSE CORRUPT LAWYERS OR WHAT?
    MARYLAND IS WROUGHT WITH JUDICIAL CORRUPTION AND OPERATES LIKE AN ORGANIZED CRIMINAL SYNDICATION OR THE MAFIA AND, IN FACT, WE ARE LEAVING THE SCUMMY STATE WHEN THIS IS ALL OVER AS THEY ARE JUST RUN A MUCK WITH CORRUPTION, FRAUD AND THE SILENCING OF THEIR CITIZENS WHO PAY THEIR SALARIES!
    WE CONTACTED CALVIN WINK OF THE MD DLLR FINANCIAL CRIMES FBI DIVISION AND, GUESS WHAT HE TOLD US READERS, THAT IS RIGHT, HE KNOWS ALL……… ABOUT THIS MANURE BUT, GUESS WHAT, THEY/FBI, ARE LOOKING FOR BIGGER FISH TO FRY! WONDER WHERE THE HECK THEY BEEN LOOKING….HMMMMM! I COULD NOT BELIEVE MY EMAIL, THAT IS RIGHT WE GOT THIS ONE IN WRITING, BUT, HE BASICALLY TOLD US HE KNOW ALL ABOUT THE MD BK CLUB, CORRUPT TRUSTEES, JUDGES WHO DO NOT RECUSE AND FAIL TO JUDICIALLY DISQUALIFY THEMSELVES WHEN THEY ARE OR COULD BE PERCEIVED BY REASON TO HAVE A CONFLICT OF INTEREST!
    WELL READERS, LISTEN UP AND YOU DECIDE, SEND ME AN EMAIL WITH YOUR DECISION BUT, LETS SAY YOU SHOCKINGLY FIND YOURSELF CONFRONTED WITH A JUDGE WHO WAS JUST APPOINTED TO JUDGESHIP DURING THE PENDENCY OF YOUR BK CASE AND, YOU, UPON NOT UNDERSTANDING HOW THIS JUDGE COULD POSSESS UNFETTERED DISTAIN AND HOSTILITY TOWARDS YOU HAVING JUST MEET YOU AND BEING PRESENTED WITH YOUR CASE BUT, YOU, JOE CONSUMER, DECIDES TO READ THE NEWLY APPOINTED JUDGES BIO IN YOUR BK CASE ONLY TO DISCOVER THIS JUDGE COMES HOT OFF THE PRESS TO YOU, DARLING LITTLE CONSUMER, FROM ONE OF THE TOP 20 INTERNATIONAL LAW FIRMS WHO HOLDS OUT IN THEIR ADVERTISEMENTS, THEY ARE THE MAFIA OF LAW FIRMS AND HAVE A KEY PERSON IN EVERY REGULATORY AGENCY, COURT CLERKS OFFICE, JUDGES BENCH OR CHAMBER, WELL, YOU GET THE PICTURE HERE! AND, WHAT IF WHILE YOU ARE DOING THIS RESEARCH, YOU COME ACROSS YOUR BK JUDGES LAW FIRMS REPRESENTATIVE CLIENTS LIST, (MIND YOU, YOUR NEWLY APPOINTED JUDGE IN YOUR BK CASE IS A LAW PARTNER TO THIS LAW FIRM, YUP, THAT IS FACT), BUT, CONTAINED IN THIS REPRESENTATIVE CLIENT LIST IS, GUESS WHO……EVERYONE OF YOUR CREDITORS AND YOUR LENDERS AND YOUR SERVICERS! WELL POOR LITTLE CONSUMERS READING THIS BLOG, WOULD/COULD YOU IMAGINE……..YOU, FOR ONE MOMENT, ARE GOING TO GET A FAIR TWIST IN FRONT OF THIS PIG? PLEASE VOTE BY SENDING ME AN EMAIL WITH YOUR CONFIDENTIAL OPINION AND LET ME KNOW WHAT YOU THINK! SPEAKING FOR US, HECK NO!!!!! WE RAN, RAN LIKE HECK AND GOT THE HECK AWAY FROM THEM THERR FOLKS AS SOMETHING WAS A STINKING REALLY, REALLY BAD!
    IT EVEN GETS BETTER READERS, OUR DARN 3RD LAWYER, WHEN ALL OF THE ABOVE CAME DOWN, IN 6 MONTHS, NEVER FILED ANYTHING IN OUR BEHALF, ARRANGED FOR US TO BE FLEECED OF 15K AND THEN HAD THE MOOSE BALLS TO GET MAD AT US WHEN WE TERMINATED HIM WHEN WE REALIZED WE HAD ANOTHER ONE ON THE TAKE OR OUR THIRD LAWYER! HE THREATENS TO APPOINT HIMSELF AS SPECIAL COUNSEL TO THE CORRUPT BK TRUSTEE, YUP, BELIEVE IT, AND IS GOING TO ASSIST THE TRUSTEE WITH LIQUIDATING OUR ASSETS, THIS IS THE GODS HONEST TRUTH HERE READERS, AND WE CAN SEND YOU COPIES OF HIS FURIOUS EMAILS WITH US AND THE PROPOSED MOTION TO APPOINT!
    JUST WHEN YOU DID NOT THINK IT COULD GET ANY BETTER, AHHHHH, WELL, IT DOES, WE DISCOVER UPON SEARCHING COMMERCIAL LAND RECORDS THAT OUR LAWYERS LAW OFFICE IS IN THE OFFICES OF A DEBT BUYING FIRM KNOW AS REDLINE RECOVERIES, OWNED BY ESQ. ROSENTHAL, LOCATED AT 1020 CONN AVE IN DC. THIS DEBT BUYING AGENCY WAS FUNDED IS, ACCORDING TO SEC. DOCS., BY JP MORGAN CHASE, CITI FINANCIAL AND A WHOLE HOST OF OUR……CREDITORS…..WOW!!!!!!!! LOCAL BK READERS YOU ARE GOING TO WANT TO WRITE THAT NAME DOWN AS IT IS GOING TO EMERGE AGAIN, AND AGAIN, AND AGAIN BUT, WE WERE SCAMMED BY THESE PIGS AND, IF IT WALKS LIKE A DUCK OR SMUCK, IT IS!
    THE BK SYSTEM IN MD, IS VERY, VERY, VERY DARN BAD WITH THEIR BEING WHAT IS KNOWN AS THE BK CLUB! IN FACT, WE WERE JUST TALKING TO A POOR SOB CONSUMER THE OTHER DAY WHO AMAZINGLY HAS OUR SAME CHAPTER 13 TRUSTEE, THE SAME TRUSTEE WHO COLLUDED WITH OUR LAWYER AND ATTEMPTED TO HOLD A CONFIRMATION HEARING WITHOUT OUR BEING OFFERED THE RIGHT OF NOTICE AND OPPORTUNITY TO ATTEND, YES, THAT IS RIGHT, THEY DID IT BEHIND OUR BACKS! THANK GOD FOR PACER CFM BUT, THIS POOR SOB CONSUMER IS NOT ONLY UNDER THIS SAME TRUSTEE BUT, IS ALSO AFFILIATED WITH OUR SAME FORECLOSURE TRUSTEE AND, WHO IT APPEARS IS SCAMMING THIS CONSUMER AND IS GOING TO ASSIST THIS CORRUPT LAW FIRM AND BK TRUSTEE IN THE STEALING OF THE CONSUMERS PROPERTY, EXACTLY WHAT THEY ATTEMPTED TO PULL WITH US BUT, WE WERE NEVER LATE!
    THEY EVEN ENLISTED OUR DARN LAWYERS, 3 IN TOLL, IN THE SCAM! WORSE YET, OUR DARN LAWYER AT THIS TIME, WAS DISCOVERED TO HAVE A CONFLICT OF INTEREST AND WAS LISTED ON OUR CORRUPT BK JUDGES X-LAW FIRMS WEB SITE, THE PILLSBURY DOUGH BOY PEOPLE, BUT, OUR DARN LAWYERS WERE LENDING MONEY FOR OUR LENDER! THE WHY THE SOBS DID NOTHING IN OUR CASE, NOTING WE ARE GETTING READY TO SUE THE SCUM BAGS FOR MALPRACTICE FOR THESE FRAUDS AS THE STATUTE IS GETTING READY TO TOLL BUT, VERY, VERY, VERY BAD NEWS FOR YOU SEIDU!
    CALL US OR EMAIL US at timcotten@mris.com! IF YOU ARE IN GREENBELT COURTS, RUN, RUN LIKE HELL AS THEY ARE GOING TO STEAL YOUR HOME, DENY YOU OF YOUR RIGHT TO A FRESH START AND HUMILIATE AND DENIGRATE YOU ALL WITH THE ASSISTANCE OF THE CORRUPT UNITE STATES DOJ, THE CORRUPT & BROKEN COURTS & CORRUPT JUDGES WHO DON’T GIVE A SHAT ABOUT THE LAW, THEIR OATH OF OFFICE, CONSTITUTION AND CONSUMERS BECAUSE THEY ARE ABOVE THE LAW AND ARE OPERATION AS A SYNDICATION! JUST READ THE MISSION STATEMENT POSTED IN THE GREENBELT, SOUTHERN DISTRICT BK COURTS!
    THIS CORRUPT COURT BRAGS THAT IT IS THERE TO COLLECT A DEBT FOR CREDITORS! THAT IS RIGHT! NOT TO OFFER HONEST CONSUMERS WITH A FRESH START, BUT THEY ARE EMPLOYED BY THE CREDITORS AND WORK FOR THOSE GREEDY SOBS! IT IS KNOWN AS THE BANKRUPTCY FORECLOSURE SCAM AND IT IS PLAYING OUT EVERYDAY IN MARYLAND! WE ARE LOOKING FOR MARYLAND RESIDENCE WHO HAVE HAD LIKE EXPERIENCES AND ENCOUNTERS WITH THIS CORRUPT JUDICIARY SYSTEM IN MARYLAND WHEN ATTEMPTING TO ASSERT THEIR REAL PROPERTY CLAIMS AND DEFEND THEIR CONSTITUTIONAL RIGHTS OF RIGHT TO PROTECT AND DEFEND THEIR PROPERTY! HERE IS THE LINK TO MD BK COURT, http://www.mdb.uscourts.gov/! LOOK AT THE MISSION STATEMENT…..WHAT THE HECK DOES THIS POOP MEAN “Our THE CORRUPT BK COURTS Mission IS: “To promote social and economic order by reconciling the opportunity of debtors to a fresh start with the right of creditors to be paid.” I DON’T KNOW ABOUT YOU MARYLAND READERS BUT SOMETHING IS VERY WRONG HERE! RECONCILING THE OPPORTUNITY OF THE DEBTOR MY ARCE AS THEY DO NOTHING OTHER THEN COLLECT DEBTS FOR CREDITORS AND DENY CONSUMERS A FRESH START, BOTTOM LINE!
    BELIEVE US, THE ONLY DARN THING THEY ARE RECONCILING IS HOW SOON THEY CAN EVICT YOU FROM YOUR HOME AND CLEANS THE DEED OF TRUST OF THE FRAUDS THAT BROUGHT YOU TO BEING FORCED TO FILE BANKRUPTCY TO BEING WITH, THIS IS ALL THEY ARE GOING TO DO FOR YOU MARYLANDERS SO, RUN, RUN, LIKE HECK! PLEASE DO NOT FOOL YOURSELF YOU CAN EVER GO ANYTHING ALONE/PRO SE, IN THE STATE OF MARYLAND REGARDING CONSUMER PROPERTY, CREDIT OR MOST LIKELY ANY LEGAL ACTION AS YOU WILL FALL FLAT ON YOUR FACE AFTER THE JUDGE YANKS OUT THE RUG FROM UNDER YOU!
    THIS IS THE NATURE OF THE CORRUPT MARYLAND JUDICIARY! JUDGES IN MARYLAND DENY CONSUMERS ROUTINELY AND DAILY, THEIR RIGHT TO CHALLENGE A NON-JUDICIAL FORECLOSURE SALE WHEN THE CONSUMER OBJECTS TO THE AFFIDAVIT AND LOST NOTE AFFIDAVIT BEING PRESENTED! I SWEAR THIS IS THE TRUTH! REMEMBER READERS, THE MORTGAGE DEED OF TRUST IS A DARN CONTRACT!!!!!!!!!!!!!!!!!! UNDER UCC PROVISIONS AND FEDERAL FAIR DEBT AND COLLECTION ACT, YOU HAVE AN ABSOLUTE RIGHT TO DEMAND THE PRODUCTION OF THE NOTE WHEN YOU AFFIRMATIVELY OBJECT TO THE DEBT THE DEBT COLLECTOR/SCUMMY BANK TRUSTEE, IS PURPORTING YOU OWN! AGAIN, I AM NOT A LAWYER NOR GIVING LEGAL ADVISE OR ENGAGING IN THE ILLEGAL PRACTICE OF LAW BUT MERELY COMMENTING ON OUR LAWS WE AS CIITZENS, INCLUDING JUDGES, ARE EXPECTED TO KNOW AND ABIDE BY! NOT IN MARYLAND THOUGH!
    NO! THEY WILL HAVE NONE OF THAT IN THIS CORRUPT STATE BUT, MR. CONSUMER, YOU BETTER PAY THEM HIGH TO THE SKY TAXES TO KEEP THESE SCUM BAGS IN OFFICE! AND TALKING OF OFFICE, LOOKING TO FORM A MARYLAND CONSUMER/CONCERNED CITIZEN COMMITTEE TO DISCUSS WITH GOV. O’MALLEY WHAT IS REALLY HAPPENING IN MD AND HOW HE CAN FIX IT!
    CONTACTED CONGRESSMAN STENY HOYERS OFFICE REGARDING THIS MANURE AND GUESS WHAT, HE JUST WANTED US TO, YOU GOT IT, ENGAGE IN A LOAN MODIFICATION OR, A WAIVING OF OUR CLAIMS AND FUTURE RIGHTS! IN FACT, WE WROTE OVER 30 CONGRESSMAN AND SENATORS, BARNEY SCREWED UP FRANKS AND HENRY PUSSPULSON AND INCLUDING CORRUPT CHRIS DODD TOO BUT, REMINDING ALL READERS, WE LIVE 30 MINUTES FROM THEIR OFFICES AND, YOU GOT IT READERS, NONE OF THESE SCUM BAGS SO MUCH AS PICKED THE PHONE UP! CONGRESSMAN CUMMINGS INCLUDED! THEY ARE THERE TO SERVE THE BANKS, AND TO UPHOLD FRAUD AND PROTECT THE BANKS FROM WE SMALL CONSUMERS AND WILL DO SO AT ANY COST AND ON OUR TAX DIME!

  5. gump59,

    Hello there, you may call me at 703-442-8828

  6. Hey gump59; what is truly the problem here are consumers who did nothing wrong other then believe they were not going to defrauded and that our gov. would never let this happen! They have and have facilitated it! As for the 10% that number is wrong; the number is much, much, much, much higher as we still have many more waves of this to come and there will be resets of 7,8,10 etc., arms that still have not hit! Also commercial markets that are failing as I type this! Gov.needs to outlaw the use of credit reports as employment criteria! This is an outrage especially for consumers who have been defrauded by acts of loan doc. forgery and mortgage fraud! Tim

  7. Neil, I just read an article you may find interesting:

    http://www.oilandgaseurasia.com/news/p/0/news/3772

    Interesting to see how some of these companies are choosing to use the bailout money….

  8. Something I have noticed in all the articles talking about foreclosures and the banking mess: None of them mention that a foreclosure is not only adding a house to the excess of inventory, but it is also removing a homeowner from the market. At best, 3 years until *possibly* able to get a loan.

    One of the solutions floated is the cram downs in bankruptcy. This strikes me as better than nothing, especially in states that are otherwise very lacking in consumer protection (VA), but that still ignores the consequences of the bankruptcy upon credit.

    Some articles not so long ago floated the number of in foreclosure or delinquent rate at 10% of all mortgages. That 10% will not be able to obtain financing for a new car, contribute to reducing the housing inventory, and even be denied some employment opportunities.

    I really do not think that those who casually say “let them go to foreclosure” have fully considered the consequences.

  9. Last modified Saturday, January 17, 2009 11:41 PM PST
    Irma Sanchez, who says her complaints to officials against a real estate broker have gone unanswered, stands on the street in front of her Encinitas home on Thursday. (Photo by Hayne Palmour IV – staff photographer)
    HOUSING: Handful of brokers linked to glut of local foreclosures

    By ZACH FOX – Staff Writer

    A tiny number of real estate brokers is associated with an inordinately large number of foreclosures in North County, raising questions about how just a few salesmen could play a role in sending hundreds of families into foreclosure and causing millions of dollars in losses for lenders.

    Nationwide, mammoth losses by such lenders have triggered a global financial panic, sparked the worst U.S. recession in decades, and led Congress to allocate $700 billion in taxpayer money to save the banking industry.

    Certainly, no single real estate office or group of agents can be blamed for the economic meltdown.

    However, great financial losses seem linked to the activities of a small number of professionals.

    A North County Times investigation into thousands of foreclosure records, along with interviews with buyers, reveals a pattern that suggests some real estate agents specialized in clients —- chiefly Latinos —- who couldn’t afford to buy homes, and helped them buy as many as possible.

    (Please see “Behind the Numbers” for more on the statistical analysis. )

    Some of their customers say the agents posted fliers in low-income apartment buildings and held seminars that encouraged people to get rich by buying and selling multiple properties, usually with low or no down payments.

    In North County, 6 percent of about 59,000 houses sold from Jan. 1, 2003 through Dec. 31, 2008 have slipped into foreclosure, according to county and industry data.

    A typical real estate office, usually a broker and a group of affiliated agents, has seen from 2 to 4 percent of their buyers’ homes go back to the lender.

    But the NCT analysis found that 21 brokers have accumulated foreclosure rates of 25 to 60 percent, a figure that could go much higher because many buyers are late on mortgage payments but are not yet in foreclosure.

    All of the agents in these offices had similar sales records: They appear to have specialized in finding Latino buyers, and most of the attached mortgages were from “subprime” lenders that specialized in lending to borrowers with weak credit scores.

    Together, the offices represent about 2 percent of the sales activity in North County since Jan. 1, 2006.

    Yet, since 2007, when the region’s foreclosures began to surge, they accounted for 455 foreclosures —- 11 percent of all foreclosures analyzed in the investigation.

    Industry experts say it is nearly impossible that such high rates of failed loans could result from ordinary real estate deals.

    Indeed, the probability of a broker randomly compiling such a foreclosure rate is about the same as winning the lottery.

    Agents working for one real estate office in the high-foreclosure-rate group have been prosecuted and pleaded guilty to fraudulently inflating borrowers’ incomes.

    There is no indication the other offices or agents broke the law.

    But for one industry expert, the numbers alone were shocking.

    “They are doing something that is severely inappropriate in order to have this high a number of foreclosures,” said Tim Sandos, president of the National Association of Hispanic Real Estate Professionals. “It just doesn’t pass the smell test.”

    Foreclosures rare, usually

    In fact, most brokers in North County saw very few of their customers go into foreclosure.

    And the analysis does not show that Latino borrowers have caused more foreclosures than other ethnic groups.

    Rather, it shows that the few real estate agents with unusually high foreclosure rates represented primarily Latino buyers.

    Analysts such as Sandos say that relatively low foreclosure rates are prevalent among Latinos and first-time, entry-level borrowers who participated in government-backed mortgage programs.

    In its investigation, the NCT combed through more than 5,800 foreclosure listings in North County provided by ForeclosureRadar, a Northern California data firm, which were then cross-referenced with mortgage data from the county’s recorder office and real estate listings.

    The analysis matched North County foreclosures with 973 real estate brokers who represented the buyers.

    All but 21 offices had rates of foreclosures that were within the range of what a statistician would find likely.

    Those brokers amassed 1,313 sales in the three years. Through December, 455 of those properties were seized by banks.

    That rate of failed loans is more than six times larger than the regional average, which these figures skewed higher.

    Several brokers also carried mortgage brokerage licenses, meaning they could sell a house and originate the loan —- a legal role under California law.

    Ruling out effects of low income

    To reduce the likelihood that foreclosure rates were inflated simply because the 21 brokers catered to low-income borrowers, the analysis compared their figures with homes sold only in North County’s most foreclosure-prone neighborhood, Oceanside’s “Back Gate” near Camp Pendleton.

    With foreclosure rates between 25 and 60 percent, the 21 brokers strayed from even the Back Gate’s above-average foreclosure rate, which is 15 percent, by three standard deviations, a statistical measure of probability.

    Such large deviations from the average are almost impossible to achieve randomly, said Jim Lackritz, a statistics professor at San Diego State University.

    And of those 21, three brokers shattered the standard of impossibility, veering off the average rate by 10 standard deviations.

    “It’s at that point where you have to use the Jim Carrey line from ‘Dumb and Dumber’: ‘So you’re saying there’s a chance?’ ” Lackritz said. “Yeah, but not in your lifetime or mine.”

    Many of the agents working for the 21 brokers sold relatively few houses, with almost all going into foreclosure.

    For example, one agent sold nine houses; seven were lost to foreclosure.

    But two brokers and two agents sold on a larger scale, making their foreclosure records much more abnormal:

    — About 40 percent of all the sales closed at the Century 21 Eldorado office in San Marcos have been seized by banks in foreclosure.

    Two brothers who headed the office, Alejandro and Emilio Lopez, were arrested and pleaded guilty to fraud a year ago. Both have been released on parole after serving five months, prison authorities said.

    The Lopezes declined to comment through their parole officers.

    — Vista real estate broker Miguel Romero has headed two offices, whose agents combined for a foreclosure rate of 48 percent.

    Romero and his agents have sold 126 houses, 60 of which have ended with foreclosures.

    Romero declined to comment through a lawyer.

    — The largest foreclosure rate among agents with more than 40 sales belongs to Vista agent Eduardo Ramos at 60 percent, or 35 foreclosures out of 58 sales.

    Three phone numbers listed for Ramos were disconnected.

    — Escondido agent Agustin Castro sold 43 houses over the last five years —- 20 have been lost to foreclosure, a rate of six standard deviations off the average.

    ‘Prequalified’ customers

    In a phone interview, Castro said he sold houses to consumers who entered his real estate office, and that he never had involvement with the loan origination process.

    Typically, his customers would “already have a prequalification. They would bring it in, we show them the house and that’s about it,” Castro said. “I’m not going to ask the loan officer for his qualifications.”

    Eighteen of Castro’s foreclosures had lender data available to the NCT.

    All were sold to borrowers with Latino surnames.

    Of those, half of the mortgages were issued by Meritage Mortgage or New Century Mortgage —- two relatively small subprime lenders.

    And 14 of the purchases were made with no money down.

    “I think it’s the cycle with the economy,” he said. “Unfortunately, if that’s reflected on me, there’s not a whole lot I could do about it. I wish things were different.”

    Romero’s officewide foreclosure rate of 48 percent was the most of any North County real estate office with at least 100 sales during the last five years.

    Some borrowers said they felt deceived by Romero’s sales pitch and didn’t know the mortgage payments would be as high as they were.

    One such client was Maria Manzano, who faces the possibility of losing the two houses she bought through Romero in hopes of investment gains.

    “Emotionally, I”m not doing very well,” she said. “I’m struggling with an attorney to file for bankruptcy, but I’m trying to hold onto the properties.”

    Buy more, get rich

    Borrowers and real estate agents who used to work with at least two of the 21 high-foreclosure-rate offices said the salesmen would target low-income Latinos, posting fliers advocating homeownership in certain apartment complexes.

    Then, at seminars, the agents would propose that buying multiple homes was the key to becoming rich.

    Another person who said she attended Romero’s seminars was Irma Sanchez of Encinitas. She didn’t buy his pitch, but kept in touch with friends who did, she said.

    Soon, they were facing foreclosure.

    Real estate agents and brokers who do not originate loans themselves are largely insulated from the question of loan repayment.

    It is illegal to encourage homeowners to lie about their incomes. And it is the job of lenders to establish whether a buyer is likely to repay the mortgage.

    Yet, the state Department of Real Estate’s code of conduct says brokers are “fiduciaries of their clients,” a relationship generally understood to mean that brokers must act in the best financial interests of their clients.

    The obligation has been widely ignored for years, said Jim Klinge, a real estate agent in Carlsbad.

    “It’s mandated,” he said, “but it’s a fleeting thought.”

    Klinge has posted a relatively low foreclosure rate at 2 percent, or one foreclosure out of 53 sales.

    Sanchez said she helped borrowers submit more than 40 complaints alleging illegality or code-of-conduct violations against Romero with the department more than a year ago.

    Not seeing any action, Sanchez filed complaints with the district attorney, she said.

    Michael Groch, chief of the district attorney’s economic crimes division, would neither confirm nor deny whether an investigation of Romero is under way.

    Romero has not been arrested, and the Department of Real Estate does not confirm or deny the existence of consumer-submitted complaints.

    Therefore, Romero’s license on the department’s Web site shows no violations or complaints.

    “Most of the people I have contacted, they just don’t believe in justice,” Sanchez said. “Nobody helped them, and now most of them have lost their houses.”

    Tracing the similarities

    The sales records of Romero, the Lopez brothers, Ramos and Castro —- the four salesmen with ultrahigh foreclosure rates —- had several similarities:

    — Essentially all the borrowers, 99 percent, had Latino surnames.

    — The majority of mortgages issued on the sales, 93 percent, carried no down payment.

    — The list of lenders on those mortgages reads like a graveyard of failed institutions, many of them exclusively subprime lenders: Washington Mutual, Argent Mortgage, Accredited Home Lenders and Fieldstone Mortgage.

    Some, though not all, of the real estate agents sold multiple houses to the same person, with all of the purchases going to foreclosure in some cases.

    Still, it is unclear how much involvement the real estate agents had in the loan origination process, where any misrepresentation of income —- and therein, any fraud —- would occur.

    The NCT was unable to perform a search of who originated each loan because such data is not publicly available, and even most real estate insiders don’t have access to it.

    Law enforcement officials say that in cases of mortgage or real estate fraud that involve pumped-up prices or inflated incomes, the most common perpetrators of the fraud tend to be the loan officer or the appraiser.

    Neither is listed on the documents publicly filed at the county recorder’s office for each real estate sale.

    Inexperience in some cases

    Real estate agent Rico Telles, an independent agent based in Carlsbad, sold nine houses, seven of which have gone through foreclosure.

    Telles said he was brand-new to the business in 2006 after working as a car salesman.

    Since the housing bust, he said he went back to selling cars until a medical condition forced him off the lot.

    Now he tries to keep up with the bills with a smattering of acting jobs.

    Each foreclosure had its own reasons, Telles said in a phone interview.

    “I’d always ask them, ‘Is this what you want? Can you afford this?’ ” he said. “And they all said, ‘Oh, yes.’ I never made anyone buy anything.”

    Another agent said his inexperience in real estate contributed to his high foreclosure rate.

    Elias Chavez worked with the convicted Lopez brothers out of the Century 21 office in San Marcos.

    Chavez, who was not charged, said the office would provide clients and handle the entire loan process.

    He sold 19 homes in two years, 14 of which have either gone through foreclosure or “short sale,” meaning the bank agreed to sell the property for less than the mortgage.

    In total, Chavez sold $9 million in real estate.

    After leaving the office following an FBI investigation, Chavez said he learned more about mortgage origination and estimates that his employers, the Lopez brothers, made $30,000 per sale on mortgage commissions.

    Combined with their split of commissions, Chavez said he thinks the office might have taken in as much as $600,000 from his sales.

    He said he earned about $55,000.

    “I wouldn’t say it was my fault for these people losing their homes,” he said in a phone interview. “I just think it was unfortunate I didn’t know any better.”

    Staff writer Edward Sifuentes contributed to this report.

    Contact staff writer Zach Fox at (760) 740-5412 or zfox@nctimes.com. Read his blog, “On the Realside,” at bizblogs.nctimes.com.

  10. Richard Davet; you are so correct! My wife worked as an exc. Property Manger for about 16 years; when she was forced from the industry in the late 90’s by age discrimination, she was offered a job as a housing counselor at her local UCAP, United Communities Against Poverty. Well, she was shocked to see just what really was happening with the grant funds given this agency which was, but was not limited, sexual harassment of the women by the program director how was gay,(I have no issues with the directors sexual preferences at all, just the sexual exploitation and harassment of needy violently abused women). The program director for whom my wife reported to authorities, eventually was let go by the agency and in the wake of the investigation, it turned out the program director had a serious gambling problem wherein she was hording and diverting grant money for her own addictive gambling habit! The director of the homeless shelter that was upstairs to UCAP, was being run by an alleged man of the cloth who was excepting sex for beds and ripping little old ladies of their insurance certificates but just an absolutely scummy sob and awful man! Thankfully my wifes snitching also bagged this scum bag too however, sadly, little change has come to that agency because another set of numb nuts has moved in and are still passing out the same old trash! I can recall her going to a Dept. of Social Services Case Managers Meeting when Clinton signed the reform legislation and all these highly degreed social workers were worried about is what would happen to their jobs in everyone of their clients became employed! These people are the worst of the worst with most social workers having gotten into this line of work because of abuse they endured as a child and now they feel they must pass the torch, but a bunch of really sick professional! My wife suffered through this job for a year and was never happier, as were her co-workers to see her leave! One of these housing counselors would drink vodka on the job, minding you this is lic. social service counselor but, for the most part these people are none functional beings and do not deserve to be serving the neediest of the needy! They are of the opinion of, “so what, I had a hard life and so are you! Tim

  11. Dear Counselor Bach, this is standard for Citi, we know, they are screwing us too and filed a fraudulent foreclosure action when no delinquency existed and, by fact, we were prepaid. We will be contacting you but please feel free to contact us at the timcotten@mris.com or, you may call us, 410-257-5283 but, Citi Mortgage is Fairbanks Capitol the biggest scumbag servicer around! Fairbanks was forced to shut down, and Citi bought them out however, they never shut down they just changed their name Citi, this is a documented fact and you can find the complaint filed by AG of New York! I fault the scummy FTC as they have done nothing about mortgage servicing fraud which is what Citi is the best at! We are very interested in talking with you and wonder if you will represent pro hac vice? Best Regards and Thanks for the good works, Citi deserves everything they will get and some! Tim

  12. PRESS RELEASE
    FOR IMMEDIATE RELEASE

    National City Mortgage, a Miamisburg, Ohio division of National City Corporation has been sued this week in Clark County District Court, by Mr. and Mrs. Nicholas Oliva of Las Vegas, Nevada, charging the corporation and its personnel here in Las Vegas with Fraud, Truth-in-Lending Violations, Breach of Contract, Gross Negligence, and other related charges. These charges center around a 3-year ARM that was sold to a local couple in May 2005, as the 7-year ARM they were expecting and wanted, but the 3-year ARM they were told to sign, used the 7-year rate of 5.625% not the lower 3-Year ARM interest rate that prevailed in May 2005. When the couple pointed out the mistake at initial signing, they were told by the Senior Loan Processor to sign the documents anyway to lock in the interest rate as it would be fixed. They assured the home buyers that “it would have never gotten by the examiner.” The broker’s office was also called at closing and the Senior Loan Processor reiterated “that the paperwork was fixed” and the couple indeed had a 7-year ARM at 5.625%. When the couple received a letter in May 2008 from National City Mortgage informing them of the 3-year ARM, they called twice and were told in essence that there was nothing National City Mortgage could do about it. When the couple then wrote a letter on May 7, 2008 and demanded that National City stop this illegal loan and contact them, which was a formal rescission letter, National City ignored them. The couple then contracted and retained The Bach Law Firm, LLC who also sent them a letter to try and resolve the situation, but they too were completely ignored.
    The couple is current in their mortgage payments, have FICA scores of 850 and 840 respectively, have no credit card debt or car payments and have the best of credit. The couple can only assume that National City is aware of the penalties from the automatic Truth-In-Lending Act, Regulation Z and is ignoring the federal law, forcing the couple to spend vast sums of money to defend themselves. No other explanation exists for National City Mortgage to allow the federal law’s 20 day response requirement to expire after the rescission notice or to ignore The Bach Law Firm’s letter. In the lawsuit, the couple are seeking compensatory damages, treble damages, punitive damages, statutory damages, and attorney’s fees.
    For additional information or interviews, please contact Jason J. Bach, Esq. of The Bach Law Firm, LLC at (702) 925-8787.

  13. I went through the “nonprofit housing counselors”, called a number off of HUD’s web site…… It seemed like a scam to me. They took my information, finances, said they would pass it on to the IndyMac, servicer for both my mortgages, and request modification.

    It really seems like the “nonprofit” companies are sucking up govt money and just churning out as many useless actions as possible. The modification offer I got after contacting them, which circumvented my work already in progress directly with a modification guy at the bank, was absolutely horrible. And according to the bank I am not eligible for another modification offer for 60 days since I declined it.

  14. Would that be counselors for reverse mortgage consumers, FHA consumers, etc.?

  15. “Last year, Congress approved $180 million in grants to nonprofit housing counselors.”

    In fighting for foreclosure for over 12 years, and failing to recieve $1.00 in assist from public or non-profits, I can tell you first hand the reporter missed who the real swindlers are.

  16. We have several firms advertising in Spanish alleging a 100% success rate for modifications in our local area VA, MD and DC.

    Run by one of the former Vice presidents of one of the most notorious sub prime lending mortgage broker of the area. This really stinks.

    The stripped you off your equity when you refinanced and now they will make you lose your home. Who with the right set of ethics will guarantee 100 % success on loan modifications, with all the different variables involved.

    In fact the lenders love these guys, they make you waste valuable time and resources so when you are virtually out for the count, the lenders come in and foreclose on you. No wonder they were born from the same womb.

    That is why we need more people talking to lawyers everywhere. Lawyers who understand and who will fight the good fight.

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