Florida AG Investigates BofA After Getting 452 Complaints About Modifications

It appears Bank of America is up to old tricks again.  452 homeowners in Florida have filed complaints with the Florida Attorney General’s office claiming that Bank of America were jerking them around about modifications.   Read the below article from the south Florida Sun-Sentinel

Hundreds of complaints about Bank of America have been filed with the Florida attorney general over mortgages and stalled loan modifications. Other major lenders have few complaints

 By Harriet Johnson Brackey South Florida Sun-Sentinel

October 29, 2009

Hundreds of struggling Florida homeowners have filed complaints with Florida Attorney General Bill McCollum in the past year about failed or stalled home mortgage loan modifications with Bank of America.

Angry borrowers, desperate to hold on to their homes, say they’ve made dozens of calls to their lender and spent months asking for a change in their loan terms, only to be denied or to learn that Bank of America revoked their loan modifications a few months after they reached a deal.

“I wrote letters to the governor, I called the bank every single month,” said Yvonne McBride, a disabled former state worker who received a loan modification for the Sunrise home she shares with husband Herman Acosta. But the bank retracted the deal …

 http://www.sun-sentinel.com/business/sfl-loan-modification-103009,0,2675667.story

GCS Shuts It’s Doors

After hearing official word of Green Credit Solutions’ collapse yesterday, I remembered Act 3 Scene 2 of Julius Caesar. In that part of Shakespeare’s famous play, Anthony declares: “I come to bury Caesar, not to praise him. The evil that men do lives after them. The good is oft interred with their bones…”

Like Caesar, Green Credit Solutions (GCS) had more successes than failures.  Their detractors and critics want to judge them by their failures.  GCS successfully completed almost 3500 loan modifications. Only 700 people complained to the California Department of Real Estate (DRE) and fewer than 150 people were found to have valid complaints.    They closed their doors because of the new laws that went into effect that regulate mod companies in California and felt that it was easier shut down then deal with the state.

 Most of the complaints DRE received were from homeowners who couldn’t have been helped with loan modifications. These homeowners were in stated income loans or no-doc loans because they require no proof of income or proof of assets. Not a single lender will modify this particular type of loan due to the high risk factor. As a result, there are high foreclosure rates in both California and Florida.

 Homeowners were forced into stated or no-doc loan programs in order to qualify for mortgages. Home values were highly inflated at the time when these loans were issued. Instead of renting for a few more years or buying a home that wasn’t as expensive, some people over-borrowed to buy a dream house.

 Our society has turned the American Dream into a nightmare.  Americans have become all five children from Charlie and the Chocolate Factory wrapped into one.  So, when something doesn’t go their way, they point a finger at someone else and cry: “I’m a victim!”  I constantly hear from loan mod company owners in Florida that homeowners are never satisfied. Recently, a mod company owner told me: “Homeowners, having become accustomed to not having to make a payment for six months or a year, now realize they have to start paying and refuse the modification.”

 If these homeowners don’t get what they think they’re entitled to, they complain on the Internet. Even though there are people with legitimate complaints against companies like Green Credit Solutions, there are complaints in every industry. That’s especially true of the lending industry and loan modification industry. 

 When I endorsed GCS in April, I received email messages from people accusing me of taking kickbacks and bribes, doing faulty research and not being a “good Consumer Advocate”. They were shocked that I would actually say something nice about a mod company. Let’s set the record straight.  Unlike unemployed former loan officer and blogger Krista Railey or former failed drug dealer, Moe Bedard who want people to think they’re the next Ralph Nader. I am not a Consumer Advocate and never professed to be one. GCS was taken off the 20 Worst Mod Company list because Larry Bracco of GCS, completed the list of tasks that I gave him including GCS refunding fees to satisfy clients. Those clients were very happy with what he did for them. 

I also asked a friend from the loan modification industry to visit GCS and give me his input. He traveled to the company’s offices. Columnist Martin Andelman did, too. Everyone who visited GCS gave me positive feedback about the company. Larry Bracco also showed copies of successful loan modifications to me and Martin Andelman, and he let us speak to dozens of GCS’ clients. 

There is one person dancing a jig on the grave of GCS, and that is Moe Bedard.  On his Website, loanworkout.org, Moe posted a comment in which he called GCS “clowns.” I think this is kind of odd since he operated a fraudulent loan modification company named Loan Safe Solutions for almost 18 months after DRE revoked his license for “moral turpitude.”  You can read all about here:

http://www.mfi-modsquad.com/would-you-hire-this-guy-to-do-your-loan-mod

How many lives did you ruin selling drugs, Moe?  How many people got screwed when you abandoned Loan Safe?  The difference between GCS and you, Moe, is GCS actually had a DRE license until May when they let it expire.     They didn’t try to sidestep California law to hide felony convictions like you did.

5 Charged With Torturing 2 Loan Mod Agents

By Steve Gorman

LOS ANGELES (Reuters) – As Los Angeles housing advocates launched a campaign warning of mortgage rescue scams, a couple hit by foreclosure are charged with torturing two loan-modification agents they suspected of fraud, authorities said on Monday.

The couple, Daniel Weston and Mary Ann Parmelee, and three other people are accused of luring their two victims to an office where the men were tied up, held for hours and beaten, a spokeswoman for the Los Angeles County district attorney said.

Police were called after one of the victims managed to escape, said the spokeswoman, Shiara Davila-Morales. The incident occurred on Wednesday in the town of Glendale, just north of Los Angeles.

Weston, Parmelee and the three other defendants each were charged with two counts of torture, two counts….

http://www.reuters.com/article/newsOne/idUSTRE59Q03Q20091027?sp=true

Florida AG Busts Equity Skimming Scheme

TALLAHASSEE, FL – Attorney General Bill McCollum today filed a lawsuit against a Miami-Dade County business, its owners and several straw buyers for their participation in an equity skimming scheme that victimized at least 20 South Florida homeowners. Xolutex, Inc., and principals Ceasar F. Tavaras and George Ibanez are named in the lawsuit, which claims the equity losses as a result of the scheme exceeded $1.9 million.

The Attorney General’s Economic Crimes Division began investigating the company’s practices in December 2007 after receiving multiple consumer complaints. According to the lawsuit, the defendants allegedly sought homeowners who were in various stages of foreclosure proceedings and met with them under the guise of offering foreclosure rescue and credit counseling. Homeowners were then lured into the scheme where straw buyers would purchase the homes for inflated home prices, maximizing the money they could skim from the homeowners.

To facilitate the straw buyers’ ability to qualify for these loans, Xolutex and its principals allegedly helped falsify loan applications. Additionally, Tavaras and Ibanez allegedly convinced the homeowners to sign documents which caused virtually all of the equity in the homes to be paid to Xolutex.

The lawsuit seeks injunctive relief against Xolutex, its principals and straw buyers, prohibiting them from ever participating in any real estate, mortgage or credit counseling related business again. The Attorney General is also seeking full restitution on behalf of all victimized consumers, civil penalties of $10,000 for each violation of the Florida Unfair and Deceptive Trade Practices Act, and reimbursement for fees and costs related to the investigation.

A copy of the lawsuit is available online at: http://myfloridalegal.com/webfiles.nsf/WF/MRAY-7X3MUC/$file/XOLUTEXinjcom.pdf

Cal Bar yanks 7 licenses

San Francisco, October 21, 2009 — The State Bar’s loan modification task force announced today that it obtained the resignations of three California attorneys as a result of misconduct related to their loan modification activities. It also placed another attorney on inactive status, charging his work poses a threat to the public, and has undertaken similar efforts against two other lawyers.

In addition, James Parsa [#153389], a southern California lawyer who extensively advertises his loan modification work, resigned today. He faced interim suspension from practice as a result of a 2001 misdemeanor conviction for sex with a child under 18 that he never reported to the bar.

Parsa, 44, has advertised heavily throughout California for the past several months, offering to help homeowners facing foreclosure. Although he provided evidence to the bar that he was in fact working on cases, an investigator uncovered two 2001 misdemeanor convictions for sex with an underage girl. The bar court ordered that Parsa be placed on interim suspension. His resignation will make the suspension moot.

The State Bar created a 10-person loan modification task force in March after receiving thousands of calls from homeowners complaining that lawyers have done no work after taking fees purportedly to help avoid foreclosure. The task force has 738 active investigations underway.

Last month, it released the names of 16 attorneys it was investigating for possible misconduct related to loan modification. Four of the six who resigned or face inactive enrollment were on that list. “We are very pleased that we have been able to remove these practitioners from the practice of law quickly in order to protect the public,” said Interim Chief Trial Counsel Russell Weiner.

Until recently, attorneys were able to legally accept advance fees from borrowers for residential loan modification work and other forms of mortgage loan forbearance services. Lawyers’ services were in demand by foreclosure relief companies and operators that could not otherwise receive payment until contracted or promised loan modification work was completed. However, on Oct. 11, Gov. Schwarzenegger signed SB 94, which prohibits attorneys and any other persons from collecting an advance fee for residential loan modification and mortgage loan forbearance services. The measure took effect immediately. Details about the new law are at the Department of Real Estate home page, www.dre.ca.gov.

The attorneys who resigned from the State Bar are:

• CAMERON EDWARDS [#222549], Alliance Law Center in San Diego, resigned Sept. 25.
• RONALD RODIS [#181873], of Rodis Law Group and America’s Law Group in Newport Beach, resigned Oct. 13.
• JEFFREY NEMEROFSKY [#213014], U.S. Advocacy Law Group and U.S. Financial Products, in Laguna Niguel, resigned Oct. 16.

The three are ineligible to practice law pending a California Supreme Court order accepting the resignations.

Those the bar is seeking to place on involuntary inactive status for posing “a substantial threat of harm to (their) clients or the public” under Business & Professions Code §6007(c) are:

• PAUL LUCAS [#163076], of Lucas Law Center in Aliso Viejo. The State Bar petitioned to put him on inactive status Sept. 21; Lucas did not reply to the petition and the State Bar Court has taken the matter under submission.
• SEAN RUTLEDGE [#255938], of United Law Group in Irvine, has a hearing Oct. 23; the bar filed its petition Sept. 22. The bar earlier charged him with seven counts of misconduct in handling a loan modification for a client who paid an advance $3,500 fee. Rutledge never took any action to negotiate with the client’s mortgage lender, the bar charges.

In addition, CHRISTOPHER L. DIENER [#187890], of Irvine, principal attorney for Home Relief Services LLC, was placed on inactive status Oct. 9, due to the State Bar Court judge’s finding that he poses a substantial threat of harm to his clients and the public.

Attorney General Jerry Brown sued Diener last summer and accused him of telling homeowners he and his company would act as sole agent and negotiators and directed the homeowners to stop contacting their lender. None of the known victims received a loan modification with the company’s assistance. Brown accuses the company and Diener of bilking thousands of homeowners out of thousands of dollars each.

Founded in 1927 by the state legislature, the State Bar of California is an administrative arm of the California Supreme Court, serving the public and seeking to improve the justice system for more than 80 years. All lawyers practicing law in California must be members of the State Bar. By October 2009, membership reached more than 223,000.

Jerry Brown To Hunt Down Mod Companies Charging Upfront Fees

Sacramento – Attorney General Edmund G. Brown Jr. today issued a consumer alert warning California homeowners to avoid individuals and businesses that charge up up-front fees for foreclosure relief services in light of a just-enacted state law that makes this “abusive practice” subject to prosecution.

“Over the past two years, unscrupulous attorneys and real estate brokers have abused their trusted roles and exploited desperate homeowners seeking to avoid foreclosure,” Brown said. “The loophole that allowed this abusive practice to continue has now been closed, and homeowners should avoid any person charging up-front fees for foreclosure relief services.”

Earlier this week, Governor Schwarzenegger signed into law Senate Bill 94, which immediately makes it unlawful for any licensed attorney or real estate agent “who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrower…to claim, demand, charge, collect, or receive any compensation until after the [attorney or agent] has fully performed each and every service the licensee contracted to perform or represented that he, she, or it would perform.”

Until now, licensed attorneys and real estate brokers could charge advance fees under certain limited circumstances. Foreclosure scam artists often sought to exploit this exception. The new law closes this loophole.

Brown has made it a top priority to protect homeowners and combat loan modification fraud in California. In August, threatening possible criminal and civil prosecution, he ordered 386 mortgage foreclosure consultants to register with his office and post $100,000 bond. Brown also ordered more than two dozen foreclosure assistance companies to substantiate suspect claims made on the internet and in direct mail advertising.

This action followed a nationwide sweep in July that led to lawsuits against 21 individuals and 14 companies who ripped off thousands of homeowners seeking mortgage relief. In total, Brown has sought court orders to shut down more than 30 companies and has brought criminal charges and obtained lengthy prison sentences for dozens of deceptive loan modification consultants.

Loan modification consultants continue to exploit homeowners desperate for relief. This year, Brown’s office has received more than 2,500 complaints against loan modification consultants and their businesses. This is a dramatic jump from 2008, when less than 200 complaints were filed.

As part of today’s consumer alert, Brown offered the following tips to homeowners:

Don’t pay up-front fees. Foreclosure consultants are prohibited by law from collecting money before services are performed.

Don’t ignore letters from your lender or loan servicer. Responding to those letters is your best bet for saving your house.

Don’t transfer title or sell your house to a “foreclosure rescuer.” Beware! This is a scam to convince homeowners they can stay in the home as renters and buy their home back later. It might also be part of a fraudulent bankruptcy filing. Either way, a scammer can then evict the victim and take the home.

Don’t pay your mortgage payments to anyone other than your lender or loan servicer. Mortgage consultants often keep the money for themselves.

Never sign any documents without reading them first. Many homeowners think that they are signing documents for a loan modification or for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership of their home to someone who is now trying to evict them.

If someone demands an upfront fee for foreclosure assistance services, you can report them to the Attorney General’s office at 1-800-952-5225, or file a complaint online at: www.ag.ca.gov/consumers/general.php

For more information on the Brown’s action against loan modification fraud visit: http://ag.ca.gov/loanmod.

The text of Senate Bill 94 can be found at: http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0051-0100/sb_94_bill_20091011_chaptered.html

Bucket Shops For Property Values-Is This The New Bandwagon?

 I found this article in the New York Times and I’m wondering if it’s only a matter of time before this becomes the next big fad in the mortgage industry.   There were people pawning MMA product and loan mods out of boiler rooms. Then they tried this formula with mortgage audits which failed.   Now they’ll try doing anything they can to keep the really cool toys they bought during the boom.  Now bucket shops for property values.  The company that created this product is made up of former WaMu executives, Eric Hutchinson and Craig Schmeizer.  If you go to their website, they are already marketing this to mortgage brokers and Real Estate agents wih slogans like “Close more deals”, “Accelarate sales” and …this is a wealth management tool” 

Price Security for Home Sellers

Special Forces Soldier Gets Scammed By “Friend” While On Tour In Iraq

I saw this story on the web.  If you can help his soldier, please do.  Remember – He puts his butt on the line so you don’t have to!

Locals come together to help out soldier who was scammed

By Sarah Cormier and Erin McClary
C & G Staff Writers

MOUNT CLEMENS — Members of the local community don’t like the way a soldier has been treated at home, and are banding together to do something about it.

When Kevin Robertson, a sergeant with the Army’s Special Forces, returned from this third tour of duty in Iraq in May 2007, he was astounded to find that many of his financial dealings were out of whack.

“He started to realize that something was really wrong. He didn’t know what had transacted,” said Elizabeth Geary, Robertson’s friend for at least 10 years.

Robertson discovered that a loan totaling $135,000 had been taken out on his home in Mount Clemens. The home was also going into foreclosure. Moreover, another home had been purchased in Robertson’s name in Florida for $340,000.

“He went to Iraq and that’s one big nightmare over there, and he comes home and it’s a worse nightmare,” said Geary.

How did it all happen?

According to Geary, one day before Robertson was deployed in November 2006, he gave power of attorney to a friend, Mark Powell, whom he had met at a gym several years ago in Sarasota, Fla.

“He had been convinced by a friend of his over in Sarasota to turn over his power of attorney,” said Geary, adding, “Kevin reluctantly did this and when Kevin came home … this man he took out two loans on this house.”

Geary lives in the house on Smith Street that Robertson owns and that Powell took the two loans out on. She said Robertson, who lives in Sarasota because that’s where the Special Forces train, had obtained the Mount Clemens home from his father, who had paid cash for the property and owed no money on it. She added that the Florida home, which Powell bought for $340,000, now appraises for $160,000.

Geary said that Robertson gave Powell no such permission to take out either loan or purchase a home.

“Kevin had no idea what this guy was going to do,” she said.

In fact, said Geary, she thinks that Powell targeted her friend from the beginning.

“There was Kevin sitting on a lot of equity, a lot of cash in the bank, he had a perfect credit score… so I think Mark befriended Kevin and I think he groomed him,” she said, adding that the day after Robertson left, Powell transferred all of the money from Robertson’s account to Powell’s wife’s.

In September 2008, Powell pled guilty to one count of false pretenses over $20,000, but the judge decided that if he paid one-third of the restitution amount within 11 months, he would be allowed to plead guilty to a misdemeanor. He was also sentenced to 11 months of probation and 100 hours of community service. A sentence review hearing, to make sure Powell is following the guidelines, is scheduled for 8:30 a.m. on Nov. 5.

Neither Powell’s attorney, Julie Hlywa, or Robertson’s attorney, Robert Vickrey, returned a phone call for comment.

“It’s been a very, very heartbreaking situation,” said Geary, who said she will continue helping Robertson take care of all of the remaining legal obligations surrounding the case while he’s back in Iraq.

However, Geary isn’t the only one fighting the soldier’s battle back at home. Now that they’ve won over the Mount Clemens City Council, L’Anse Creuse High School teacher Suki VanDerMass and her Students Against Destructive Decisions (SADD) will attempt to help Robertson with a Battle of the Bands fundraiser Oct. 24.

The group entered City Hall with a booming drum line Oct. 5 to show council members they meant business, VanDerMaas said.

“The city of Mount Clemens decided that on ‘Make A Difference Day,’ that we were going to adopt a soldier,” she explained. “I brought Elizabeth to my SADD group, she told them (Robertson’s) story and we decided, ‘OK, we’re going to adopt him.’ But we had to get City Council on board first.”

“It’s a wonderful thing that the community is rallying around him like they are” added Geary.

When VanDerMaas, who advises the L’Anse Creuse High School’s SADD group and also teaches special education and social studies, asked her students how they wanted to help, they already had their minds made up: “They said, ‘We’re going to do a Battle of the Bands.’”

VanDerMaas ended up networking her way into a few of the city’s well-known venues and was able to secure locations for the event and band auditions.

Battle of the Bands is taking place at the Emerald Ballroom Oct. 24. Tickets are $10 for adults, and kids 10 and under get in free as long as they bring a pack of gum to donate.

VanDerMaas said Robertson told her one thing soldiers can’t get enough of in the desert is chewing gum. As a result, all the packs donated Oct. 24 will be shipped to troops overseas. Proceeds from admission costs will be donated to Robertson.

Aside from the entertainment at Battle of the Bands, concertgoers can also enter raffles to win a weekend in Boyne Mountain or a gift basket filled with service vouchers and merchandise from Mount Clemens businesses.

Local vendors will also be there selling hot dogs, and some of the proceeds will be donated toward the effort.

VanDerMaas said garage bands, kids who play in bands for local high schools, and even those who’ve graduated and just want to get up and perform will compete to benefit Robertson.

“When the economy’s bad and we’re hurting, there’s always someone that has it way worse,” VanDerMaas concluded. “And Kevin, I mean, we really got to step up.”

For details about Battle of the Bands, call Suki VanDerMaas at L’Anse Creuse High School, (586) 783-6400 ext. 2083.

You can reach Staff Writer Sarah Cormier at scormier@candgnews.com or at (586) 498-1095.

The Loan Mod Party Is Over In California

With Arnold signing SB 94, the party is over in California for loan modification companies who charge upfront fees.  The Sacramento Bee published it’s eulogy.   Read it here:

http://www.sacbee.com/business/story/2249150.html

Is the California DRE Even Relevant Anymore?

Since starting MFI-Mod Squad back in January, I have witnessed a lot of craziness from illegally-run loan modification companies. They’re often staffed by convicted felons, unlicensed lawyers, or government bureaucrats who confuse motion with action. 

 This has been most prevalent in California, which became a mecca for illegally-run and shady loan modification companies within the past twenty-four months. Under California statute, enforcement of the regulations that govern mortgage lending and modifications was the responsibility of the Department of Real Estate (DRE). 

 From November 2007 until September 2008, DRE did nothing to reign in the loan modification industry. It wasn’t until complaints began pouring in about these companies that DRE began requiring modification companies who charge an advance fee to have an advance fee agreement on file with them. That, however, didn’t stop the unethical practices committed by the vast majority of these companies. DRE’s advance fee requirements were hardly enforced.

 A perfect example of this was Loan Safe Solutions. The company was operated by Moe Bedard, a convicted felon whose DRE license was terminated when he was incarcerated. Bedard began Loan Safe Solutions after he left prison and operated it until May 2009, when his company lost its office space through eviction. It was commonly known in the modification and lending industry since the spring of 2008 that Bedard was operating outside DRE guidelines, but DRE did nothing. 

 See http://www.mfi-modsquad.com/would-you-hire-this-guy-to-do-your-loan-mod

 There are other shady companies that DRE did nothing to punish. Federal Loan Modification is another example. It was finally shut down after it was fined to death by the Federal Trade Commission (FTC). The FTC acted after being grilled by reporters about MFI-Mod Squad’s list of the twenty worst loan modification companies, which was published in April.

 See http://www.mfi-modsquad.com/bad-loan-modification-companies

 It wasn’t until early this year that DRE initiated a statewide dragnet against these companies because DRE was trying to keep the Governator’s bean counters at bay. Schwarzenegger’s people were looking for ways to do budget cuts and eliminate California’s massive $38 billion deficit. 

 Though good for a few blurbs on the Internet, this dragnet did little to actually scare these companies, which were working with equally unscrupulous law firms. 

 Due to actions initiated by other entities, the situation did eventually improve over the past several months. The California Attorney General’s office stepped in and began filing lawsuits against loan modification companies and requiring that $100,000 surety bonds be filed with their office.  The State Bar of California elected a new president. Her core mission was to bring integrity back into the legal profession, beginning with attorneys who charged advance fees for loan modifications and then failed to perform any work on the files. 

 Then, of course, SB 94 was introduced and was then signed by Schwarzenegger last week.  

With all these issues, is it fair to ask if DRE is even relevant? If they are, how can they be made more effective? Do they need new leadership and a new mandate?

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