Gretchen Morgenson from The New York Times wrote a great piece about Mods. Here’s the link if you missed it.

A Reality Check on Mortgage Modification

WE are almost two years into the housing storm and foreclosure floodwaters continue to rise. A record 800,000 homes received….

http://www.nytimes.com/2009/04/26/business/26gret.html?_r=1

Pennsylvania Banking Department Takes Action Against Mortgage Modification Companies

The Pennsylvania Department of Banking recently ordered four out-of-state mortgage modification companies to stop engaging in unlicensed activity in Pennsylvania.

The department issued cease and desist orders against Consumer Loan Modification of Arizona and U.S. Settlement Services of Florida on April 10 and Federal Loan Modification Law Center LLC of California on April 14. All three companies advertise on their Web sites to refinance mortgage loans in Pennsylvania when they are not licensed to do so. The companies must comply with the orders or file appeals by the end of April.

The department also entered into a consent agreement and order with Nationwide Foreclosure Prevention Center, LLC of New Jersey and its owner, Robert P. Valentin, to stop doing business in Pennsylvania. The company was fined $2,000. Valentin is prohibited from engaging in the mortgage business in Pennsylvania for five years and must refund fees that he collected from Pennsylvania consumers within 90 days. The department also cited Valentin for unlicensed activity in 2008 under the name Justice Mortgage.

Copies of the enforcement actions for Consumer Loan Modification, U.S. Settlement Services, Federal Loan Modification Law Center LLC and Robert P. Valentin and Nationwide Foreclosure Prevention Center, LLC are available at www.banking.state.pa.us.

From The Land of Fruits and Nuts Arises a Queen

Since starting MFI-Miami last June and MFI-Mod Squad in January 2009, I have seen a lot of messianic types with delusions of grandeur spring up. They claim to be consumer watch dogs or fraud fighters. They usually come and go like minor characters in a daytime soap opera.

These self proclaimed fraud fighters also have narcissistic revenge fantasies. They believe they’re not at fault for losing their homes. They rant on the Internet and are usually gone in a month or two.  I usually ignore these people, but I do respond when someone posts blatant lies about MFI-ModSquad.com and my companies.

Last week, a site called Bad Biz Finder posted a story about MFI-ModSquad and MFI-Miami.  In the story, the allegedly anonymous owner wrote that I told her “decoy” that my friend Pat Pulatie (LoanFraudDetective.com) ran my California operation.

I’ve never had a California operation and never claimed to have one. The owner of Bad Biz Finder also claimed that loan modification companies like CDA Law Center pay me to get my seal of approval. She doesn’t believe that I pay for this site out of my own pocket. To this, I say prove it. If not, then in the immortal words of Eric Cartman of South Park, ‘Shut your pie-hole!’”

Who is the anonymous blogger from Bad Biz Finder who claims she must remain anonymous because she fears incurring bodily harm? Her name is Erin Baldwin.

Who is Erin Baldwin? She own The Baldwin Companies and Baldwin Business Consulting, which operates at 24310 Moulton Parkway, Ste. 536, in Laguana Hills, California.

What does Baldwin Business Consulting do?  According to the press clippings on the site, Erin — the owner — charged her clients $5000 dollars to write a business plan using a template from an office supply store and then introduced her clients to several bankers to get them a business line of credit for $30,000.

All this seems fine.  However, the going rate for writing a business plan is under $500 and, up until last year, banks were giving $30,000 lines of credit to anyone with a pulse and decent P&L statements. The going rate for using a commercial broker, if you needed one, for these lines was $1000.  She only made introductions to the banks to sidestep California regulations, which require commercial brokerage houses to be licensed.

So, how was Erin able to charge three times the going rate? She flirted with potential clients and told people that she attended Merrimack College and Harvard University. I guess those community education classes make nice padding for the resume because the people with whom I spoke have no record of her attending or graduating from either school.

So what qualifies Erin to be a wannabe Power Puff Girl? On Bad Biz Finder, she claims: “We here at Bad Biz Finder are a Consumer Advocate Group that has been around since the 1980s and we stay anonymous because we have been threatened in the past…” This is simply not true.  The state of California has no record of her or any of her companies being a consumer advocacy group. Baldwin Business Consulting has, by Erin’s own admission, only been around since 2003. Besides, threats are part of this business. I get an average of 5-6 of them per week.  Erin tries to remain anonymous because she doesn’t want people to dig into her past and discover that she’s a fraud.    She did exactly what she is accusing modification companies of doing.

So what’s the real story?  When the recession came, Erin’s ability to overcharge her clients disappeared faster than 100% financing with a 600 FICO. The problem was that she bought a seven-figure house in Costa Mesa during the boom and, when the recession hit, she was upside down and couldn’t afford it.

She lost her Barbie Dream House to foreclosure and, due to the fact that she bought her home using stated income, she was rejected for a modification by her lender. Now she uses this as her justification for going on an Aileen Wuornos-style killing spree against the modification industry.

In January, Erin posted a rant accusing Erik Duckworth and Jeff Davi at California DRE of taking bribes and kickbacks from Parsa Law Group. It appears that she didn’t like DRE’s investigation. But, when DRE requested assistance from her, she wrote: “However, the safety of our volunteers, the tactics we have in place and the consumers that are counting on us to place their interest first and foremost would be severely handicapped if we were to simply turn over all our information to the DRE.”

In other words, Erin didn’t have any information and DRE considered her an unreliable source.

Erin, listen to someone who actually knows what he’s doing. Anonymous bloggers have no real credibility. Only gullible consumers believe everything they read on the Internet. When state regulators or law enforcement officials ask for your assistance, give it to them without hesitation. By cooperating with the authorities, you can build credibility and be recognized by the national media as an expert in your field.  Also, shelling out $10 to register a domain name goes a long way toward making you credible.

After Erin posted her rant, Parsa Law Center filed a libel suit against her. Feldman Law Center also filed one against her as well.  She was even warned by Wordpress CEO Toni Schneider to tone down her rhetoric or he would pull the plug on her blog. All that did was infuriate her even more. Here’s her email response:

“Yes we are exposing fraud and thank God we are exposing the fraud. We’ve received thousands of thank you emails because of it. Somebody has to do it and so far no one is stepping up to the plate. Why did you start WordPress anyway? Don’t you believe in free speech? Isn’t it a free service to allow people to express themselves freely?
You cannot be an agent for change BY BEING APPROPRIATE. You’re going to ruffle some feathers along the way. How have you handled controversial blogs in the past? Did you shut them down? Did you censor them? Did you violate their constitutional rights? We’re sincerely interested in knowing the answers to these questions.
THERE ARE NO LEGITIMATE BUSINESSES REVIEWED ON OUR BLOG. If you read our posts you would see that all of our claims are substantiated. Please point out one that isn’t. The people that are flipping out are flipping out because they’ve been caught with their pants down and it’s humiliating and expensive to their scam.
Please email us the sections of your “terms of service” that allow you to censor us and violate our constitutional rights.
The Supreme Court of the United States of America has stated that:
“ABOVE ALL ELSE THE FIRST AMENDMENT MEANS THAT GOVERNMENT HAS NO POWER TO RESTRICT EXPRESSION BECAUSE OF ITS MESSAGE, ITS IDEAS, ITS SUBJECT MATTER, OR ITS CONTENT.” Police Department of Chicago V. Mosley (1972). Government rules by the law, and the law is decided in court, and the court is who must decide any matter pertaining to this subject. Your terms of service have no authority over The Supreme Court and the Constitution of the United States of America.
So stop hassling us.
Bad Biz Finder

This email is interesting because, for all the talk about her rights under free speech, she doesn’t allow opposing views on her blog. I guess she only believes in free speech for herself.

The problem with people like Erin Baldwin is that she believes that because she went through the foreclosure process, she’s an expert in foreclosure rescue or modifications. If you use that logic, you should be able to qualify for the Indy 500 after watching Speed Racer cartoons.

Erin will probably go on some Wagnarian rant on her site about this article but let her.  Her anonymity and fictitious resume have been exposed.

If you think her insane rants about the modification industry make great fiction you should read what she writes about her landlord because they towed her car for illegal parking but that is another story.

Why Green Credit Solutions Is Coming Off The List of 20 Worst Mod Companies

When I first sat down to write this article on Saturday, I remembered a comment someone posted on a message board about 18 months ago. Frank Drigotas, aka Dollar, wrote that the immaturity of people in the mortgage industry led to its decline. Frank noted that the majority of these people were young and lacked access to mentors with real mortgage experience.

Everyone laughed at Frank and called him a cranky old man who only wanted to create drama.  It wasn’t until I started MFI-Miami and MFI-Mod Squad that I realized Frank may have been onto something.  When I worked as a loan officer and broker, I was like Ari Gold from Entourage.  I once asked an underwriter if she learned to do her job from the side of a milk carton. That was one of my more tame comments.  Friends in Detroit remember some of my more colorful comments which are unsuitable for this site.

You’re probably wondering why I’m bringing this up. Well, a few weeks ago, I received a call from Martin Andelman, who writes a blog for ML-Implode.com. He asked me about the issues I had with Green Credit Solutions and what criteria I used for my twenty worst mod company list.  I told him it was based on the complaints I received, and we began talking about the Chris Campbell saga involving Dr. Howard.
Martin spent the next 90 minutes trying to persuade me that my impression of Green Credit Solutions was wrong.  He told me that he had spoken to quite a few of their clients at length and that all of them seemed very happy.  He then told me that Green Credit Solutions had a new president — Larry Bracco — who was unaware of the Chris Campbell/Dr. Howard soap opera.   Larry was made aware of my worst loan mod company list by potential clients asking him about it and was naturally concerned. Martin asked me if Larry could call me.

After a few days of playing phone tag, Larry and I connected and talked about the industry and the changes it had undergone in the past 18 months. He asked me to forgive Curt Melone for his mistakes during the conversations about Chris Campbell with Dr. Howard.  Larry then reminded me that we were all young once and said things that now make us look back and say, “D’oh!”

Larry said: “Steve, how can I prove to you we are not the company that you described in your article?”

I have to admit that this question blew me away. When CEOs or attorneys call me about my articles or press releases, they usually say: “I hope your dog dies!” or “We’re going to sue you!” or my favorite, “You better look under your car before you start it!”  These comments usually make me revert to acting like Ari Gold.

I gave Larry Bracco the following list of things I needed to take Green Credit Solutions off the list:
• Make Dr. Howard happy.
• Refund the advance fee to the people who complained to me.
• Prove that Green Credit Solutions is properly licensed and is approved by DRE to collect an upfront fee.
• Get an inspection of their facilities by someone of my choice.

Larry and I spoke early last week. Later that week, he called Dr. Howard and offered to help him. Larry also gave refunds to the clients who complained and showed me proof that Green Credit Solutions was properly licensed under California law. At the end of the week, my friend emailed me and said he was very impressed with their operation.

Their DRE approval is listed under the company name, Pac-West, which is a Green Holdings, Inc. company, and Green Credit Holdings and Green Credit Solutions are licensed under the DOC. This is permissible in California. I verified this with several attorneys who represent modification companies and with the state of California.

Green Credit Solutions did everything I asked them to do, and they did it in less than a week.  So, I am removing them from my list of the worst loan modification companies.

Are they a bad company? No.  I believe they’re a good company that handled the situation with Dr. Howard and some unhappy clients poorly. This was due to the inexperience of some of their executives.   I believe that under the leadership of Larry Bracco, there will be fewer complaints sent to me and very few incidents similar to what happened to Dr. Howard.  I have been assured by Larry that if I do receive complaints they will be handled swiftly.  People like Larry Bracco offer the experience, leadership, and mentoring skills needed at Green Credit Solutions and in the industry as a whole.

I started MFI-Mod Squad to chase out scam artists, to make bad companies ask themselves how they can become better and how the good companies can make themselves great companies.  I think that this experience has made Green Credit Solutions a better company and one that you can trust to handle your family’s loan modification.

Has Peoples First Financial Re-Invented Itself as Sunrise Financial?

It appears the Hutchinson Brothers over at Peoples First Financial are trying to re-invent themselves. I received an email from someone who tells me they are now operating under the name Sunrise Financial.  They even have their new website up with a clip of CNN’s  favorite angry White Man, Lou Dobbs.  You can see it at http://www.newsunrisefinancial.com.  They are still operating in the same offices.  My source tells me they are planning a move to a new location to make it harder for the media to find them.  According to my source, all the media exposure drove away their business.  This typically happens when you run an illegal operation and get caught.

Hey, wait! Didn’t they tell Jim Avila from ABC News, they had multiple lawyers working for them and they were 100% legal?   Apparently, they are going to “piggyback” off a law firm in LA to scare away people from asking too many questions.

If anyone else has anymore information on this let me know.  I’ll keep all of you posted as I get more information on this.

The List of Foreclosure Rescue Companies Under Investigation By The Florida AG

The Florida AG’s office announced the following foreclosure rescue companies are currently under investigation:

A Realty RX, LLC
Attorney Debt Services, LLC dba Homekeeper USA
B Home Associates, LLC dba Expert Foreclosure
Federal Foreclosure Prevention, LLC
FHA All Day.Com, Inc.
FL Loan Mod.com and or Deep Creek Realty
FMA Servicing Inc., a/k/a Financial Management Advisors, a/k/a www.fmafinancial.com, and a/k/a Financial Management Services
Foreclosure Alternative Services, LLC
Foreclosure Help Center, Incorporated
Foreclosure Law Group / Foreclosure Stoppers / Foreclosure Mediation Services
Foreclosure Services of America, Inc. d/b/a Fix The Foreclosure, Inc.
Francis C. Reeder, an individual
Home Assure, LLC
Home Mitigation Direct, LLC
Hope Now Foundation/The Treasurer, LLC
Integrity Real Estate Services, Inc. / Integrity Foreclosure Solutions
JAJ Consulting Services
Law & Associates, LLC, Thomas E. Law II
Lincoln Lending Services, LLC
ModExperts, LLC
Mortgage Crisis Solutions Association, LLC Property Solutions Specialists, Inc.
Mortgage Modifiers, LLC
Mortgage & Refinance Solutions, LLC dba Mortgage & Refinance Solutions
NATIONAL FORECLOSURE COUNSELING SERVICES CORP.
National Foreclosure Management, Inc.
National Foreclosure Mediators, Inc. / Home2Mortgage
National Payment Modification Company a Florida corporation, and The Gordon Law Firm, a California Law Firm
Oceanview Investment Services, Corp. Oceanview Financial Services, Corp. Financial Powerhouse Services, Inc.
Statewide Foreclosure Solution
Strong Family Fund, Inc
Three Angels Community Action Network, Inc. a/k/a 3ACN
US Settlement Services, Inc
Victor Lopez & Associates,Inc.
Wendy Smith Real Estate
Wineberg Lopez & Rodriguez Company (formerly Winberg, Lopez, & Rodriguez Company a/k/a Wineberg, Lopez & Rodriguez, P.A.) Freddy W. Lopez, Sr. and Wiliam R. Rodriguez, Jr.
You Walk Away, LLC d/b/a youwalkaway.com

I Found an Interesting Interview on the Internet

This is an interview that Scott Palmer and Victoria Butler — attorneys with the Florida Attorney General’s office — did in regard to enforcing loan modification regulations in Florida. Click here to listen to the interview…

Green Credit Solutions Is Off The 20 Worst Mod List

If your wondering how you can be taken off the list from several weeks ago, read the story I am posting on Monday on how Larry Bracco, the new president at Green Credit Solutions handled being on the list.   The way Larry handled the situation and the complaints I received about them is why I’m taking them off the list.    It is one story I am excited to share.  I’m super busy doing MFI-Miami work today and tomorrow or I would write it today.

CNBC’s Diana Olick wrote about MFI-Mod Squad on her blog!

It’s a really cool article.  It’s about a solicitation letter a mod company was sending to immigrant homeowners here in South Florida that I managed to get my hands on.

http://www.cnbc.com/id/30193867

People Begging and Kissing My Backside to Be Taken Off The List

Since I posted the 20 Worst List, I’ve received calls and emails from companies on the 20 Worst list.  All saying, “We’re one of the good guys, why are we on your list?”  Well, for starters, I’ve received complaints about you and from the research I have done, you’re operating outside the laws of the state you are in.   To which the California companies respond, “We contract out to a law firm so we don’t need to be DRE backed.  This means they would be in violation of the California Business and Professions Code Section 6152.  It’s a big no-no for a third party to collect retainers or solicit clients for an attorney in California.  My favorite is, “We have an in-house lawyer.”  You can have all the “in-house” lawyers you want but if you are not a law firm and are collecting an upfront fee, you need to be approved by DRE.  I even had one guy try to bribe me with $10k.   I didn’t know if I should be appalled or laugh.  It’s pretty simple, if you play be the rules and don’t rip people off, you won’t have the spotlight of MFI-Mod Squad on you.

I also received alot of media inquiries this week which was super cool.  Apparently, one of the reporters at the Geithner press conference had a copy of the press release I did about the 20 Worst Mod companies and was showing it to people.    I have some other investigative stories coming down the pipeline and may have some surprises next week as well.

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