Florida AG Investigating 5 Mod Companies For Violating State Ban

By Diane C. Lade, South Florida Sun Sentinel

The Florida Attorney General’s Office has opened five new investigations this year, with four centered in South Florida, involving foreclosure rescue and mortgage modification companies, a key enforcement concern for regulators.

Businesses being examined on allegations they took fees upfront for their services, in violation of state law, include: Foreclosure Relief Systems LLC, also doing business as Foreclosure Rescue Services, of Miami and Miami Beach; Pendulum Financial Group, also doing business as Blue Fox Financial, of Plantation; and Lender Forensics LLC, also doing business as National Modification LLC, of North Palm Beach.

 The law offices of Thomas Dvorak, of Fort Lauderdale, are being investigated on allegations an attorney allowed a foreclosure rescue group to operate out of his office under the firm’s name, state officials said.

 Save Our Dream LLC, of Orlando, is being examined for possible violations involving residential foreclosure proceedings.

NH AG Busts Guy For Ripping Off The Handicapped W/ Bogus Mod Company

Attorney General Michael A. Delaney, Banking Commissioner Peter C. Hildreth, and Carroll County Sheriff Christopher Conley announced today the arrest of Eric W. Eliason, aka Ricky Masci, (DOB 12/28/79) for Theft by Deception, as defined by RSA 637:2, with an extended term of imprisonment; Failure to Obtain a Debt Adjustment License, Untrue Statement and Fraudulent Business Practice as defined by RSA 399-D; and Failure to Obtain a Mortgage Originators License and Untrue Statements as defined by RSA 397-A.

Eliason, 30, of Tamworth New Hampshire, is charged with crimes that occurred in connection with his business, Deaf and Hard of Hearing Mortgage Consultants. The first set of complaints allege that the defendant took up-front money to assist hard of hearing victims in completing a loan modification of their home mortgage. The complaints allege that numerous representations were made to the homeowners that the modification was in process, and then that the modification was denied. It is further alleged that the defendant had never contacted the mortgage company to perform a modification. It is also alleged that Eliason intended to take advantage of the victim’s physical condition that impaired the victim’s ability to manage their property or financial resources or to protect their rights or interests.

A second set of complaints allege that the defendant attempted to broker a re-finance of a home loan for another hard of hearing couple. It is alleged that he obtained up-front fees with the promise that in the event the re-finance was not completed, money would be refunded. No loan was obtained, and no money was refunded. Eliason was not licensed to conduct any of these transactions. 

Arraignment will likely be scheduled for February 10, 2010 in the Southern Carroll County District Court. The charges range from a Class A Felony with a extended term of imprisonment, which carries a maximum penalty of 10-30 years in state prison and a $4,000 fine, to misdemeanors, which carry a maximum penalty of 12 months in the House of Corrections and a $2,000 fine. 

These criminal charges are a result of a joint investigation conducted by the New Hampshire Attorney General’s Office, the New Hampshire Banking Department, Carroll County Sheriff’s Office and the DeKalb County, Illinois Sheriff’s Department. 

FL AG Sues California Mod Company For Fraud

TALLAHASSEE, FL – Attorney General Bill McCollum today announced that his office has filed a lawsuit against a California company providing loan modification services to homeowners facing foreclosure. According to the lawsuit filed today in Orange County, 21st Century Legal Services, Inc. allegedly charges consumers up-front fees in violation of Florida’s Foreclosure Rescue Fraud Prevention Act.

According to the Attorney General’s lawsuit, the corporation solicited loan modification services to Florida homeowners by telephone, mail and internet marketing. An investigation conducted by the Attorney General’s Economic Crimes Division revealed that 21st Century Legal Services charges an up-front fee as high as $2,500 to homeowners seeking loan modification services. Additionally, consumers have complained that the company has not performed the promised services and that consumers are unable to get refunds.

The complaint alleges that, after initial contact is made with a homeowner, the company arranges for a “company representative” to visit the consumer at home. These representatives are, in fact, local notaries hired by the company to travel to the consumer’s home and execute the necessary sales agreements. The lawsuit states that the company instructed the notaries not to provide consumers with a copy of the written agreements, in direct violation of Florida law.

Other states have sued 21st Century Legal Services, and the FBI raided several of the company’s California offices in mid-September.

The Attorney General’s lawsuit requests full restitution for affected homeowners and civil penalties of up to $15,000 per violation. The Attorney General’s Office is also seeking a court order permanently prohibiting 21st Century Legal Services from further violations of Florida law.

The Attorney General’s Economic Crimes Division continues to review the practices of many companies providing foreclosure-related rescue services to ensure that they are in compliance with Florida law. More information about the Attorney General’s efforts in combating mortgage fraud, along with helpful information for homeowners in distress, can be found at http://www.myfloridalegal.com/mortgagefraud. Consumers affected by these or other practices may file a complaint by visiting the Attorney General’s website at http://www.myfloridalegal.com or calling the fraud hotline at 1-866-966-7226.

California Department of Real Estate Revokes Record Number of Real Estate Licenses

SACRAMENTO, Calif. – (Business Wire) The California State Department of Real Estate (DRE), the state department that issues licenses to real estate professionals and protects consumers in real estate transactions, revoked a record number of real estate licenses for cause in 2009. The DRE also accepted another record number of license surrenders from licensees facing disciplinary action. All told, over 775 licensees had their license revoked or simply surrendered their licenses while facing accusations. Over the past two fiscal years, the DRE averaged 446 license revocations and 59 license surrenders. In 2009, license revocations jumped over 50%, to 672, while license surrenders jumped nearly 80% to 105. The 122 cases that resulted in license suspensions in 2009 remained relatively unchanged from the 125 license suspensions averaged in the past two fiscal years.

The down turn in the real estate market is a big reason disciplinary actions are up. “With so many people struggling to stay in their homes, foreclosure rescue and loan modification scams have risen dramatically,” DRE Commissioner Jeff Davi said. “And what is even more unsettling, a majority of offenders involved in loan modification scams are not even licensed, which limits a consumer’s ability to obtain restitution or verify the legitimacy of a business,” Davi added.

In 2009, the DRE initiated over 2,000 investigations involving loan modification complaints, which represents 25% of all cases set-up. The DRE issued over 180 Desist and Refrain orders to nearly 348 different respondents performing loan modification services, ordering them to stop or change their business practices. Of the 348 Desist and Refrain order respondents, approximately 60% were not licensed and ordered to cease licensed activity – which included offering loan modification services. In addition, nearly 100 real estate licensees have been accused of violating the real estate law in connection with loan modification complaints. Many of the completed cases have been referred to law enforcement agencies for criminal prosecution.

In order to help inform consumers to stay away from the bad actors, the DRE posts on its website all the recipients of Desist and Refrain orders and Accusations in loan modification complaints along with a copy of the order.

In addition, before engaging the services of a person to perform real estate services, consumers should verify the status of the person’s real estate license by visiting the DRE’s website. The benefits are twofold. First, a license status check can tell you if the person is licensed, how long he or she has been licensed, and whether the licensee has been previously disciplined or is facing disciplinary action. Second, a consumer who is defrauded by a licensee and obtains a fraud judgment in civil court, but is unable to collect on the judgment, may be able to receive restitution from the DRE. The DRE administers a recovery account for fraud victims that can pay a victim up to $50,000 for a transaction. The payout from the recovery account is capped at $250,000 for each licensee. Those victims who have been defrauded by unlicensed perpetrators cannot make a claim against the department’s recovery account.