Foreclosure Rescue Scams

South Florida Sun-Sentinel.com
Seven new cases opened this year
More South Florida companies being investigated for foreclosure rescue activities
Companies charged upfront fees, claimed to be nonprofits, state officials said
By Diane C. Lade

South Florida Sun-Sentinel

5:17 PM EDT, July 14, 2009

State officials have initiated seven new investigations of South Florida mortgage modification and foreclosure rescue companies so far this year -- bringing the total to 11 open cases -- as desperate homeowners scramble for ways to keep their property.

The inquiries account for more than a fourth of the 40 mortgage-related cases the Florida Attorney General's Office is pursuing statewide.

Eight of the 11 companies based in Broward, Palm Beach or Miami-Dade counties had non-working telephone numbers or Web sites when the SunSentinel attempted to contact them Tuesday. Telephone messages left with the remaining three were not returned.

Some of the operations are accused of collecting upfront fees, as much as several thousand dollars, to help people modify their home loans or rescue their house from foreclosure. Under the state Foreclosure Rescue Fraud Prevention Act, which became law last October, companies can't charge upfront fees for foreclosure-rescue services or loan-modification services related to a foreclosure.

Other companies untruthfully represented themselves as non-profit corporations, or falsely claimed to be providing government funds, according to state documents. A Miami-based mortgage modification outfit, Lincoln Lending Services LLC, targeted Hispanics facing foreclosure, said state officials who sued the company in March. The suit filed by Attorney General Bill McCollum claimed Lincoln Lending and its owner, Rita Gomez, defrauded 10 homeowners and violated the state's deceptive and unfair trade practices law by assessing upfront fees.

Lincoln Lending charged consumers $2,700 to search for errors or misinformation in their mortgage and closing documents, then had them pay additional money and sign a second contract for loan modification, state officials said.

Gomez did not return the SunSentinel's phone calls in March. The business telephone now is disconnected.

Keep Your Property Inc. had similar business practices, according to a state complaint filed against the Hialeah company in April. Investigators said Keep Your Property charged homeowners $2,200 upfront and then required $550 monthly payments that they called "membership" fees, as a way to circumvent state laws.

The state asked the courts to order the company be dissolved and consumers receive restitution. Keep Your Property's phone number is disconnected.

These South Florida companies are being investigated by the Florida Attorney General's Office for their mortgage modification or foreclosure rescue practices. Some operate under multiple names.

The companies below could not be reached for comment because they did not have working telephone numbers or Web sites:

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.

Telephone messages were left for the companies below but they did not return phone calls Tuesday afternoon:

Nationwide Home Relief of West Palm Beach; First Universal Lending LLC of Palm Beach Gardens; Home Rescue and Modification Inc. and Fidelity One Mortgage Group of Coral Springs.

Orlando Sentinel writer Mary Shanklin contributed to this report.

Diane Lade can be reached at dlade@sunsentinel.com or 954-356-4295.

Copyright © 2009, South Florida Sun-Sentinel

California is about to hit these companies big time, too. I have several friends who work for the local DA in the fraud division, and they've received memos from the State AG about a major crackdown. They're going after those foreclosure relief companies, but also companies who offer the dreaded "leaseback" deals. It just shows that if there's a tragedy somewhere, people are going to exploit it.

Just wondering...
I know homeowners can do a load mod themselves, but are
all loan mod companies a scam?

All? No. But many of them are. Before the Feds cracked down on them, the angle was to charge several thousand dollars in upfront fees. It was easy money preying on desperate homeowners.

Not all loan modification programs are scams, but it's real hard to tell the difference sometimes. Many aren't "scams" at all; just mortgage professionals seeing an opportunity. It seems the predatory lenders who made the horrible mortgages in the first place have simply re-branded themselves. Paying $2,000 - $10,000 upfront seems better to the homeowner than foreclosure or attorney's fees.

In most states it's illegal to charge service fees to those in foreclosure prior to the foreclosure's resolution (unless you're an attorney). The homeowner would be best served to contact their lender themselves and try to work something out. If that doesn't work, they should find an attorney. The harsh truth is that 99% of these homeowners have no chance of getting out of trouble for good. They may get some relief, but they're still locked into a loan they can't pay.

That pretty much sums it up. Any relief is usually temporary.

Interesting ...

I accepted a new position as a loan officer here in the Pacific NW. The company I represent only has a $500 upfront fee which is refundable if the client decides not to go through with it minus any fees for fed ex'ing documents and misc. expenses.

Unfortunately, I can only do 8 western states. I'll try to help out where I can.

I've heard that Florida and NY are big on scams. I have had trouble with companies in the past that were promoting vending machine businesses so I'm not in the least bit surprised. Then of course, taking advantage of hispanics. Totally uncool. Regardless of one's nationality or background, these kind of cases give all of us involved in real estate a bad name.

Let's do what we can to promote honesty and integrity - in this day and age, people will be very attracted to that.

Have a great weekend everyone,

Andrew

Just found this article on MSNBC's "The Red Tape Chronicles" blog. If you're not familiar with it, this entertaining blog covers consumer issues and exposes unfair, unethical, or just plain stupid business practices. Just browse through the archives to see how much the consumer is getting screwed without us even knowing.

http://redtape.msnbc.com/2009/07/despite-all-thats-happened-in-the-last-two-years-home-loan-offers-at-ridiculous-terms-are-still-falling-out-of-the-sky-one.html#posts

Ah...the foreclosure scams gotta love them.

States are changing there laws in regards how fees are going to be handled. Florida has changed theres and they are going to do it again real soon.

It is going to be lawyers who are going to be able to do Loan Mods. I do them here in Florida and yes I use to charge up front fees. Now I do them both with the new outfit I am using.

People can do it themselves but most will be messed up in the long run.

Mr. Rexford is correct. I ended up (working?) with a law firm today in Portland, OR and they told me that soon it will be only attorneys who can charge up front. Even then, this depends on the clients wishes.

The way my company works is like this:

1. Potential client contacts me
2. I input their financial information into the companies software and then do a preliminary consultation to see what can be done, if anything
3. The attorney will then contact the client and give them more information.
4. If the client decides to move forward, then a retainer fee is charged the client
5. I get paid a percentage

We service WA, OR and CA. If you know anyone who could use this service on the West Coast, be sure to send them to me. I will pay a $100 referral bonus if they pay a retainer fee and do business with us.

I like the way this works. The client can get lots of information and ideas at no charge and then the attorney gets it done after the fee is paid. I think this is a good process/system.

On the WA State DFI website, it said: NEVER PAY UPFRONT FEES!


Andrew

I am able to do them in 50 states along with Debt Settlement.

The key is do they qualify.

Just got off the phone with a lady. She hired a guy in January to do her Loan Modification. Her Fee to him was 3 monthly mortgage payments of $718.21 of which she post dated each check 30 days a part. Well the guy cashed the checks in the orderly fashion and no loan mod or denial letter.

How she was contacted was through a telemarketing firm.

Now she gets my post card that says she is going to loose her home to foreclosure if she doesn't do something. Again another scare tactic. Well she calls me and is upset not knowing what to do. Since she got my card she had a notice of default filed (lispendens) to start action on behalf of the bank. She calls bank and of course same song and dance as I had told the story. Well the bank sent her a loan mod package. She really didn't know what it was. We chatted about 10 minutes about her situation and I told her that she did not need my services YET to go ahead and fill out the paperwork and I told her to go to Law Library to answer the complaint and ask for extension.

Why am I writing this? This is the 3rd case this week where people are being scammed. I see why the AG is passing laws. One lady I spoke to has Cystic Fibrosis. The filing and all the stress of the foreclosure stuff has put her in the hospital because of all the pain.

So if you see any scammers, really let everyone in your area know about them. We need to do the right thing.