Consumer Alerts

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.

Loan Company Goes Dormant, Hundreds Could Lose Homes

A local loan-modification company is going out of business, potentially leaving hundreds of homeowners in jeopardy of losing their homes.

 By ANA GARCIA and FRED MAMOUN, NBC News Los Angeles

Updated 8:25 AM PST, Thu, Nov 19, 200

 Hundreds of homeowners who turned to an Orange County mortgage-modification company for help may be in jeopardy themselves and don’t know it. The company appears to have shut down.

 Company insiders say they have come forward to warn the public because they’re afraid people will lose their homes. 

 Greenleaf Legal Services in Mission Viejo may bill itself as “loan-modification experts,” but during a recent visit, the place was a ghost town.

 Some offices were empty, others had stacks of client files apparently waiting to be worked on, and telephone message…

 http://www.nbclosangeles.com/around-town/real-estate/Greenleaf-Legal-Services-Mission-Viejo-Loan-Modification-70424972.html

FL AG Files Suit Against 2 Mod Companies

 TALLAHASSEE, FL – Attorney General Bill McCollum today announced that his office has filed a lawsuit against two Central Florida companies and their owner over allegations they charged up-front fees for foreclosure rescue-related services. National Payment Modification Company and The Bostonian Group, LLC, which conducts business under the name People’s First, allegedly charge up to $2,500 in up-front fees to homeowners trying to rescue their homes from foreclosure.

Also named in the lawsuit is William Rodriguez, the owner of both companies, who was a founding owner of Wineberg, Lopez, & Rodriguez Company. The Attorney General’s Office sued Wineberg, Lopez, & Rodriguez Company in March and obtained an emergency injunction barring the company from charging homeowners any fee in advance for providing foreclosure-related rescue services. That case is still pending in Orange County Circuit Court.

An investigation conducted by members of the Attorney General’s Economic Crimes Division, working as part of the Attorney General’s Mortgage Fraud Task Force, determined that both companies charge the up-front fee and divide it into five equal payments secured by post dated checks. Each check, according to the lawsuit, is associated with a separate “sub-contract” or step in the loan modification process. Consumers complained that both companies cash the post-dated checks even though the companies have not begun negotiations or even contacted the consumers’ lenders.

The Attorney General’s Office is seeking permanent injunctions prohibiting the companies from charging up-front fees, restitution on behalf of injured consumers, civil penalties of $15,000 for each violation, and reimbursement for attorney’s fees and costs related to the investigation. The Attorney General’s Office has filed numerous civil lawsuits to enforce the state law prohibiting companies from charging up-front fees for foreclosure-related rescue services and is currently investigating over 75 additional companies. More information about the lawsuits and information for homeowners is available online at: http://www.myfloridalegal.com/mortgagefraud.

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

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.

FL AG & Bar Cracking Down On Mod Lawyers

When Maryann Salvas sent $1,795 to Aventura attorney Daniel Fox to arrange a modification of her mortgage and reduce her monthly payments, she didn’t hesitate because she thought “people were supposed to trust lawyers.”

Almost a year passed without the loan on her Rhode Island house being modified, said Salvas who hired Fox based on a phone solicitation. In order to pay Fox’s fee, Salvas said she missed a mortgage payment, never caught up on the late payment, and is now four months behind on the mortgage.

Read the rest of the story here:

http://www.dailybusinessreview.com/news.html?news_id=57694

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