foreclosure rescue

OREGON BANS TWO CALIFORNIA LOAN MODIFIERS

California companies Noah Savings Mortgage, Inc. and Liberty Law Firm, Inc. must also pay restitution to Oregon consumers.

Oregon Attorney General John Kroger today announced two settlements that will provide refunds to Oregon homeowners and prohibit two connected Orange County California companies from doing further loan modification work in Oregon.

“This office is committed to stopping abuses in the mortgage industry that harm Oregon consumers,” said Deputy Attorney General Mary Williams.

The Oregon Department of Justice investigated allegations that Noah Savings Mortgage violated state law by collecting advance fees for loan modifications aimed at preventing foreclosure sales. The investigation also looked at allegations that Liberty Law Firm solicited to collect advance fees for loan modifications. Both companies cooperated with the investigation.

The settlement with Noah Savings Mortgage resulted in $6,500 in full refunds to two Oregon consumers. The company also must pay $5,000 to the Oregon Department of Justice and cease doing loan modification work in Oregon. The settlement, in which Noah Savings Mortgage admits no wrongdoing, was filed today in Linn County.

The settlement with Liberty Law Firm prohibits the company from doing modification work in Oregon. If any Oregon consumer complaints arise before August 20, 2010, Liberty Law Firm must pay restitution to those victims and $5,000 to the Department of Justice. Liberty Law Firm admits no wrongdoing; the settlement was filed today in Marion County.

Senior Assistant Attorney General Thomas K. Elden handled the case for the Oregon Department of Justice.

Oregonians should watch out for loan modifiers who ask for advance fees over $50 and check to see if a loan modifier is registered. Foreclosure consultants and loan modifiers cannot take advance fees in Oregon. Loan modifiers must register with the Oregon Department of Consumer and Business Services through the Division of Finance and Corporate Securities.

The Oregon Department of Justice and the Department of Consumer and Business Services work together to uproot abuses in loan modification.

For help with a loan modification problem, contact the Department of Justice through the consumer hotline: 1-877-877-9392, or website: www.doj.state.or.us, or consult an Oregon lawyer. To check if a loan modifier is registered, contact the Division of Finance and Corporate Securities at http://www.cbs.state.or.us/dfcs/.

Oregonians can call 1-800-SAFENET to find a nonprofit foreclosure consultant who will provide help at no charge.

Attorney General John Kroger leads the Oregon Department of Justice. The Department’s mission is to fight crime and fraud, protect the environment, improve child welfare, promote a positive business climate, and defend the rights of all Oregonians.

foreclosure rescue

New Jersey Man Charged in Foreclosure Rescue Scam

Gennaro Rauso, who owned and operated a real estate management company that purported to help financially distressed homeowners with their foreclosure problems, was charged today by information with several mortgage fraud related offenses. The information alleges that as part of his scheme, Rauso took advantage of desperate homeowners with the promise of staying in, or saving, their homes, when in fact, he was using them to defraud the mortgage holders. The charges were announced by United States Attorney Zane David Memeger, Internal Revenue Service Acting Special Agent-in-Charge Troy N. Stemen, with the Criminal Investigation Division, Federal Bureau of Investigation Special Agent-in-Charge Janice K. Fedarcyk, and Inspector General of the Department of Housing and Urban Development Kenneth M. Donohue. Invaluable assistance was also provided by the Office of the United States Trustee.

According to the information, between January 2005 and December 2008, Rauso owned and operated a real estate management company, D&B Property Investors, to carry out a scheme to defraud mortgage companies out of hundreds of thousands of dollars in mortgage payments. Rauso sought out homeowners who were facing immediate foreclosure on their homes and offered to help them avoid foreclosure. In a flyer mailed to these homeowners, Rauso claimed that he could help homeowners fight the mortgage companies on their behalf, while at the same time helping them to rebuild their credit so they could keep their home. Rauso also boasted that even if their home were lost to foreclosure, he could still keep them in their home for an additional 12-18 months after the sheriff’s sale.

Once a homeowner agreed to participate, Rauso had the homeowner transfer the title of the home over to him for a nominal sum. Rauso then had the homeowner sign a lease, making the homeowner a tenant who paid rent to Rauso. He then delayed and obstructed the foreclosure process by, among other things, filing federal bankruptcy petitions. During this time when foreclosure was delayed, Rauso collected monthly rent payments from the homeowners, but made no payments to the mortgage companies. Ultimately, Rauso used more than 200 homeowners and their properties in his scheme to defraud mortgage companies, resulting in Rauso pocketing at least $400,000 in diverted or lost mortgage payments. With respect to at least four of the homes involved, the mortgages were federally insured by the Federal Housing Administration (“FHA”), resulting in substantial claims paid by the FHA once the mortgages defaulted.

“The troubles in our economy and housing market have, unfortunately, created new opportunities for scam artists,” said Memeger. “According to the information, this defendant took advantage of struggling homeowners, and preyed on their desperation to use them in his corrupt scheme to defraud mortgage companies. We urge the public to seek assistance from the U.S. Department of Housing and Urban Development before signing over their lifelong investment to a third party.”

In addition to the mortgage fraud scheme alleged in the information, Rauso is also charged with willfully failing to file a tax return on behalf of D&B Property Investors, defrauding the government of taxes owed on more than $1.6 million in income.

INFORMATION REGARDING THE DEFENDANT

NAME: Gennaro Rauso
ADDRESS: Trenton, New Jersey
AGE OR YEAR OF BIRTH: 46

If convicted, the defendant faces a maximum possible sentence of 247 years in prison, a $6.95 million fine, five years of supervised release and a $2,000 special assessment.

Janice K. Fedarcyk, Special Agent in Charge of the Philadelphia Division of the FBI stated: “The type of criminal activity alleged in this indictment today is particularly despicable in that it targeted those victims who were the most vulnerable financially and the most desperate for some type of assistance to avoid foreclosure on their properties. It also represents an affront to the millions of hard-working Americans who struggle every day to meet their mortgage obligations and keep their families in their homes.”

Kenneth M. Donohue, Inspector General of the Department of Housing and Urban Development stated: “In the past several years, we have seen enormous and damaging developments in the mortgage and housing markets with an urgent reliance on the government to bolster unstable marketplaces and devastated communities. The HUD OIG, in partnership with other federal agencies, is deeply committed to ensuring that scarce resources are not diverted to those who seek to enrich themselves at the expense of those who so desperately need assistance today.”

Troy N. Stemen, Acting Special Agent-in-Charge of IRS Criminal Investigation, stated: “The charges announced today describe a scheme involving fraud at many levels. According to the charging documents, not only did Rauso earn substantial income by deceiving homeowners, defrauding mortgage companies and manipulating the bankruptcy process, he also failed to pay taxes on this income. The financial expertise of IRS-CID agents allows us to analyze complex financial transactions, such as those employed in this scheme.”

The Office of the United States Trustee also praised the work of investigators working to target abuses of the bankruptcy system: “I am grateful to U.S. Attorney Zane Memeger and our law enforcement partners for their pursuit of those who seek to use the bankruptcy system to prey upon financially distressed consumers,” said Roberta DeAngelis, United States Trustee for Pennsylvania, Delaware, and New Jersey. “As a member of the President’s inter-agency Financial Fraud Enforcement Task Force, the U.S. Trustee Program works to combat fraud and abuse throughout the bankruptcy system, including bankruptcy-related mortgage fraud.”

The case is being prosecuted by Assistant United States Attorney Leo R. Tsao.

foreclosure rescue

Hazelton Management/The Carley Group took money but failed to provide promised help

A Charlotte foreclosure rescue operation, which previously operated in Colfax, NC, is barred from collecting any money from consumers for foreclosure assistance or loan modifications, Attorney General Roy Cooper announced Friday.

“Foreclosure assistance schemes rob North Carolina homeowners of hard-earned money that they could use to save their homes,” Cooper said. “My office will continue to go after outfits that violate the law by charging an upfront fee for their service.”

On Thursday, Wake County Superior Court Judge Cressie Thigpen agreed with Cooper’s request to temporarily bar Reginald Keith Turner, who did business as Hazelton Management and The Carley Group, from offering foreclosure and loan modification services. Cooper is seeking to shut down Turner’s foreclosure assistance business permanently and win consumer refunds and civil penalties.

Read more here: http://ncdoj.gov/News-and-Alerts/News-Releases-and-Advisories/Press-Releases/AG-Cooper-cracks-down-on-foreclosure-assistance-ou.aspx

foreclosure rescue

Cal Bar goes after O.C. loan mod lawyer

An Orange County lawyer who signed retainer agreements with homeowners facing foreclosure but then “did little or nothing to help them” was placed on involuntary inactive enrollment, the State Bar of California announced.

The Bar cited complaints from clients in 8 states against lawyer Brian Colombana, 29, of Lake Forest.

“The Chief Trial Counsel’s office continues to send the message that attorneys guilty of misconduct – especially toward homeowners who are at their most vulnerable when facing the loss of their homes – will be prosecuted and disciplined,” Interim Chief Trial Counsel Russell Weiner said.

From the Bar:

“State Bar Court Judge Richard Honn said in his June 17 ruling that the conduct of Brian Colombana …  “poses a substantial threat of harm to his clients or the public.” Honn cited 13 declarations against Colombana by clients from California, South Carolina, Minnesota, Nevada, New Mexico, Maryland, Utah and New York who paid upfront fees to one of the loan modification companies with which Colombana was affiliated, including Loan Negotiators of America, Housing Law Center and Mortgage Law Center.

“In most cases, clients never even met the attorney but dealt with non-attorney representatives of the loan modification companies. Through the companies, Colombana ‘convinced numerous cash-strapped homeowners to pay him thousands of dollars in hopes of saving their homes from foreclosure,’ Honn wrote. ‘. . . Many of these homeowners were worse off after retaining respondent’s services.’

“The judge noted that many of the homeowners were current with their mortgages but then were advised by Colombana’s affiliates to stop paying. “Soon these clients were behind on their mortgage payments and facing foreclosure, and [Colombana] wasn’t there to help,” Honn wrote.

“In ordering involuntary inactive enrollment, Honn said Colombana continues to harm clients by failing to refund unearned fees or communicate with them and demonstrates a pattern of behavior likely to continue to cause substantial harm.”

The action against Columbana stems from efforts by the State Bar’s Task Force on Loan Modification to stop lawyers who ”exploit the vulnerabilities of frightened homeowners who face foreclosure by promising services that are never delivered,” the Bar says.

Since the task force was created last April, seven involuntary enrollments have been ordered and 13 resignations obtained from lawyers who engaged in misconduct related to loan modifications. The Bar says there are 5 loan modification trials pending and 2,000 active investigations.

Read more here: http://www.ocregister.com/articles/lawyer-254168-bar-enrollment.html

foreclosure rescue

Is this what Jerry Brown wants to do to legitimate loan modification firms?

WARNING: THIS VIDEO IS NOT SUITABLE FOR THE OFFICE AND CONTAINS VIOLENT IMAGES

foreclosure rescue

Jerry Brown and Cal Bar Continue Kristallnacht-style Raids and Smear Campaigns Against Modification Lawyers

The Cal Bar put out the below press release a couple of days ago and I believe there is more to this story than what the Cal Bar is saying.  Just like their cases against Green Credit Solutions and Paul Lucas, what the Cal Bar is not saying is how many total clients did these attorneys have and how many people were actually helped.

The Cal Bar is about to lose their case against Green Credit Solutions because when they confiscated all the files out of their office, they  neglected to refer these homeowners to other attorneys or giving give them legal assistance to them. Thus, leaving hundreds of homeowners without legal representation and putting them at greater risk of losing their homes.  Matter of fact, because of the Cal Bar’’s actions, some actually did.  At the hearing this week, it was revealed that the Cal Bar only had 19 legitimate complaints against Green Credit Solutions.  They claimed last year they had 900.  This out of 3500 clients GCS had signed up.

The Cal Bar, the California AG’s office and the FTC publicly tarred and feathered Paul Lucas for scamming people by raiding and ransacking his offices, confiscating files and blocking his access to his firm’s bank accounts like something out of a 1930’s gangster movie.  They even attempted to have his law license revoked.  Only problem was, he wasn’t scamming people.  The FTC and the Cal Bar lost their case because Paul Lucas could prove he successfully modified 90% of the loans he handled and he was later re-instated as a member of the California Bar.  According to Cal Bar everything is now right in the universe.  Wrong!  Thanks to the internet, Paul Lucas will be permanently labeled, “Scam Artist”

So think about all that while reading this or any press releases put out by them or Jerry Brown’s office.

San Francisco, June 02, 2010 — Continuing its effort to protect the public from lawyers who take advantage of distressed homeowners, the State Bar prosecutor’s office has secured orders of involuntary inactive enrollment for Southern California attorneys Eric Douglas Johnsonand Mark Alan Shoemaker.

Besides the two involuntary inactive enrollments, the State Bar’s Office of Chief Trial Counsel has obtained the resignations of 13 attorneys involved in loan modification misconduct since creation of the Loan Modification Task Force in April 2009.  Five loan modification trials are pending. Another 2,000 active investigations related to loan modification are being conducted.

In separate May actions, State Bar Court Judge Richard Honn ruled that the conduct of  Johnson (State Bar #224065), 55, of Los Angeles, and Shoemaker (State Bar #134828), 49, of Long Beach, pose a “substantial threat of harm” to their clients or the public, and both were ordered involuntarily enrolled as inactive members of the State Bar under Business and Professions Code 6007.

Johnson associated with several non-attorney legal organizations, lending his name and status as an attorney to a firm offering bankruptcy filing and assistance, a business handling forensic audits and loan modifications and two other loan modification companies. Honn cited cases in which homeowners were promised that their homes would not be foreclosed but the homeowners lost them anyway after having made significant payments to the non-attorney companies.

Johnson “lacked control and failed to supervise” any of the organizations with which he was associated, Honn wrote in his May 18 order. “This lack of control and failure to supervise consequently led to, among other things, the unauthorized practice of law, misrepresentations and client harm.”

Shoemaker, whose case was investigated and prosecuted with the invaluable help of the California Department of Real Estate, has owned and operated a loan modification business called Advocate for Fair Lending since 2008. Shoemaker “used Advocate and his status as an attorney to convince cash-strapped homeowners to pay him thousands of dollars in hopes of saving their homes from foreclosure,” Honn wrote in his May 28 order. Shoemaker, however, “often did little to nothing to help these clients. In fact, many of these homeowners were worse off after retaining [Shoemaker’s] services.”

The order referred to 18 examples in which Advocate clients, who signed power of attorney when they contracted with Advocate, were not helped and asked for refunds. A few did get refunds; many others did not. Some clients reported that their lenders said they had never been contacted by Advocate on their behalf. Shoemaker argued that he was merely the president of Advocate and did not represent any Advocate clients in a legal capacity.

“Advocate’s clients were also [Shoemaker’s] clients,” Honn wrote. “An attorney cannot use a power of attorney form to absolve themselves of the ethical mandates they have sworn to uphold.”

foreclosure rescue

Grosse Pointe man accused of swindling Saline residents out of money for foreclosure help

Art Aisner, AnnArbor.com

He offered to help struggling homeowners save their Saline homes from foreclosure, but authorities say all Bryan Crevier delivered were empty promises and widespread fraud.

Crevier, 48, is charged with multiple counts of larceny for allegedly swindling nearly $10,000 from three Saline women within a few months in 2008.

The Grosse Pointe man was scheduled to appear in Washtenaw County Circuit Court Wednesday, but his pre-trial hearing was adjourned to June 9 at his attorney’s request. He remains free on a $10,000 personal bond.

Saline police began investigating Crevier in the spring of 2008 when three city residents reported he took money from each of them up front for loan refinancing services like closing costs, appraisals and fees. The women, ages 47, 58, and 60, were all friends dealing with financial hardship and were in danger of losing their homes.

Though he presented himself as a mortgage modification consultant and had each resident fill out official applications, Crevier never filed the women’s paperwork with lending institutions, police reports said. By the time they suspected him of fraud, Crevier had stopped returning their phone calls and e-mails. When officers visited his Troy home that fall, it was vacant and appeared abandoned, police said.

For roughly a year, Crevier essentially disappeared. His phone numbers were disconnected and e-mails and letters went unreturned, police reports said. Local officers left the case open and didn’t get a break until Roseville police arrested Crevier for similar crimes in late 2009. That arrest culminated a three-month long probe into his dealings with a family trying to refinance, police said.

“This was old-fashioned detective work, and it ultimately paid off,” said Detective Sgt. Keith Waller of the Roseville Police Department. Waller noted he had to sift through scores of financial documents, cell phone records, and e-mails to track Crevier to a Grosse Pointe home that records show belonged to his girlfriend’s mother.

Crevier is also charged with one count of larceny by false pretenses of more than $20,000 in Macomb County.

Shortly after his arrest, Crevier told Saline police he had to deal with a lender based in Illinois whom he never met due to tightening credit restrictions, reports said. He said he sent that man a portion of the women’s money to cover appraisals and underwriting fees, and kept some to cover immediate costs here while the mortgages were pending. He did not keep records of the alleged transactions, police said.

Read more here: http://www.annarbor.com/news/grosse-pointe-man-accused-of-swindling-saline-residents-out-of-money-for-foreclosure-help/

foreclosure rescue

No Penalties for Mortgage Company with Worst Loan Mod Backlog

Paul Kiel, ProPublica

Last week, the government released data showing that there’s a big problem at Saxon Mortgage, a subsidiary of Morgan Stanley. Of all the mortgage companies participating in the administration’s mortgage modification program, Saxon has the largest proportion of homeowners caught in modification limbo.

The program, which provides incentives for mortgage companies to modify loans to an affordable level, has been plagued by delays and disappointing results. About 1.2 million homeowners have begun a “trial” modification, which is supposed to last three months. But less than a quarter of them have emerged with a real, lasting modification. (Here’s our backgrounder on the program and problems with it.)

As of April, about 265,000 homeowners were caught in trials that had lasted more than six months. Nowhere is that backlog worse than at Saxon, a mid-sized subprime servicer based in Texas that wasacquired by Morgan Stanley in 2006 and has had long-runningcustomer service problems.

Few of Saxon’s trials have converted into lasting modifications. As of the end of April, Saxon had put 40,000 homeowners into trials, but only about 11,000, or 27 percent, had received a permanent modification. Far more had either been dropped from the program (16,000) or were still waiting for a final answer after being in the trial for longer than six months (10,000).

A close look at Saxon provides a window into problems with the program itself, in particular a glaring lack of oversight from Washington. While the government set up the program, it relies on mortgage companies to actually perform modifications. So far Washington has shied away from penalizing those servicers that have failed to follow the program’s rules or underperformed. Indeed, despitewidespread problems among mortgage servicers and frequent tough talk from Treasury officials, who have often threatened penalties, the government has yet to issue a single one.

A spokeswoman for Saxon said that the company has been regularly audited, as have other participants in the government’s program, and that the reviews had uncovered no “material issues.”

Read more here: http://www.propublica.org/ion/loan-mods/item/saxon-mortgage-of-morgan-stanley-has-loan-mod-backlog

foreclosure rescue

Wisconsin AG Sues Loan Modification Company

The Wisconsin Department of Justice filed suit Friday against a company doing business as “USA Loan Auditors” for engaging in deceptive practices in the course of selling purported “loan modification” services toWisconsin homeowners.

The complaint alleges the California-based company, Relief Law Center (d/b/a “USA Loan Auditors”) has engaged in deceptive practices by sending homeowners mailings that suggest the homeowner’s mortgage lender is under investigation for predatory lending abuses.  The mailings falsely claim that as a remedy for the supposed-abuses, the homeowner may be entitled to a loan modification. The Idaho Attorney General issued a Cease and Desist Order against the company earlier this year.

According to the complaint, when concerned homeowners contact the company, the conversation is directed to a sales pitch for purported loan modification services.

“Wisconsin will prosecute those who engage in this type of activity inWisconsin,” said Attorney General Van Hollen.  ”My office continues to work with the Department of Agriculture, Trade and Consumer Protection and the Department of Financial Institutions in identifying and prosecuting companies who commit fraud against already vulnerable homeowners.”

A copy of the civil complaint is available at:
http://www01www/news/files/USALoanAuditorsCivilComplaint.PDF

Attorney General Van Hollen and the Department of Agriculture, Trade and Consumer Protection previously issued a Consumer Alert, warning homeowners about loan modification scams and foreclosure rescue fraud. The Alert gave tips on how to avoid fraud and recommended that homeowners at risk of foreclosure or in need of mortgage counseling contact certified HUD counselors, who provide free services. The release can be found at:
http://www.doj.state.wi.us/absolutenm/templates/template_share.asp?articleid=1457&zoneid=3

The FTC also has issued a warning about these scams:
http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt177.shtm

If you believe you have been victimized by this group or any other, please contact the Wisconsin Department of Financial Institutions at their Consumer Protection Hotline1-800-422-7128 or you may also file your complaint online at: 

http://www.wdfi.org/contact_us/ComplaintDefault.htm

foreclosure rescue

Ohio foreclosure firm scams 600 Indiana homeowners

From Indystar.com

The Indiana attorney general’s office claims a Cincinnati-based loan modification firm signed fraudulent agreements to help nearly 600 Hoosier homeowners avoid foreclosure.

Foreclosure Assistance USA told the homeowners they would help prevent foreclosure in claims made on websites and radio and in direct-mail advertisements and phone solicitations, the attorney general’s office said in a statement. Spokeswoman Molly Butters said a lawsuit against FA USA was filed today in an Allen County court.

“The suit also claims FA USA violated Indiana law by failing to have a $25,000 surety bond while acceptingmoney up front from customers for services that had not yet been performed,” the statement said. “The company is also accused of deceptive acts including misrepresenting to consumers that the consultants were experts in the area of foreclosure prevention or possessed in-depth knowledge of the industry.”

The Ohio attorney general filed a similar lawsuit against FA USA in 2009 in a Hamilton County, Ohio, court. The Ohio lawsuit followed an investigation started in March 2008. In the lawsuit, Ohio asked the court to prohibit FA USA and another foreclosure provider from committing further violations of the law and to require the companies to reimburse consumers and pay civil penalties.

On July 1, a new Indiana law will require foreclosure consultants have a $25,000 surety bond on file with the attorney general’s office, regardless of whether the company demands money up-front for services or not.

“Out-of-state companies often don’t believe the Indiana attorney general’s office has jurisdiction over their practices,” Attorney General Greg Zoeller said in the statement. “That’s simply not true. The vast majority of foreclosure consultant scams originate outside Indiana and this enforcement action reflects that we are not bound by state borders.”

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