foreclosure rescue scams

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.

foreclosure rescue scams

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. 

foreclosure rescue scams

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.

foreclosure rescue scams

ATTORNEY GENERAL ANNOUNCES GUILTY PLEA IN FORECLOSURE RESCUE SCAM OPERATED FROM THE PHILIPPINES

Las Vegas, NV— Nevada Attorney General Catherine Cortez Masto announced today that defendant Michael Sinclair has pled guilty to one (1) Category B felony count of Mortgage Fraud in violation of NRS 205.372(2), for fraudulently operating a foreclosure rescue scam in Las Vegas under the business name of Federal Housing Aid.

In addition, Sinclair must pay $60,000 in restitution to the victims of the scam. Sinclair was recently extradited from the Philippines, where he fled after learning of the indictment against him.

“This is one more example of how mortgage fraud scammers prey on Nevadans,” said Attorney General Masto. “We will continue to send the message that these scammers are unwelcome in our State. We will find you and extradite you, if necessary, to see that justice is served.”

Using a call center located in the Philippines, Sinclair and his business partner, William Vargas, operated Federal Housing Aid, a company that claimed to offer loan modification services to assist victims in avoiding foreclosure on their homes. The operation had been in business since February 2007. The two defendants charged the victims between $899 and $1500 in upfront fees and offered a 100% money back guaranty, claiming their company would refund the money if the foreclosure could not be stopped. After paying for services, the defendants failed to provide the services paid for and failed to provide refunds as promised in their advertisements.

On November 3, 2009, Vargas pled guilty to one (1) Count of Theft-Obtaining Money in Excess of $250 by Material Misrepresentation from a person over the age of 60, a Category B Felony in violation of NRS 205.0832(1)(c), NRS 205.0835(3) and NRS 193.167 and one (1) Count of Attempted Theft-Obtaining Money in Excess of $250 by a material misrepresentation, a Gross Misdemeanor in violation of NRS 205.0832(1)(c), NRS 205.0835(3) and NRS 193.330. As part of his guilty plea, Vargas is required to pay restitution to the victims in the amount of $21,000.

Sentencing is scheduled for June 3, 2010 before Judge Villani in District Court Department 17

The case was investigated and prosecuted by the Attorney General’s Mortgage Fraud Task Force, which was created by Attorney General Masto in early 2008 to address mortgage fraud scams throughout Nevada. The task force works closely with other State agencies, including the Mortgage Lending Division, to investigate and prosecute mortgage fraud crimes in Nevada.

Consumers who wish to report mortgage fraud are asked to contact the Attorney General’s Bureau of Consumer Protection in Las Vegas at 702.486.3194 to obtain a complaint form.

foreclosure rescue scams

3 indicted in alleged foreclosure rescue scam

Cara McCoy, Las Vegas Sun

Three men have been indicted on theft charges in an alleged foreclosure rescue scam that bilked people out of thousands of dollars to modify loans, the state Attorney General’s office announced Thursday.

Jason Todd Wilhite, Ronald Quilang and Benjamin Moraleda allegedly operated a document preparation and loan modification business called Rescorp between June 2008 and January 2009 in Las Vegas. Rescorp charged between $1,200 and $2,200 “for loan modification and document preparation services and misled customers by falsely claiming that their services would prevent foreclosures on their homes and/or that they would obtain loan modifications,” according to a statement released by Nevada Attorney General Catherine Cortez Masto.

The Attorney General’s office received numerous complaints about misrepresentations the men made, including several clients who said they paid Rescorp thousands of dollars for its services but said the company never contacted the clients’ lenders to obtain loan modifications, Cortez Masto said.

Prosecutors claim the services were never performed, but they also say customers were further defrauded when the men had them sign false documents that gave the men liens on the victims’ homes.  (Read more)

foreclosure rescue scams

NJ Mod Company Fined For Putting Out Mailer Looking Like It Came From Fed

From ABC News

Attorney General Lawrence Wasden says Idaho homeowners who were duped into paying a New Jersey company to help them modify their mortgages will get more than $19,000 in a settlement.

Wasden says the investigation into Weston, New Jersey-based Best Interest Rate Mortgage Co. LLC began with a complaint about a direct-mail advertisement.

The ad offered a special loan modification programs as part of the “Economic Stimulus Act of 2008″ and appeared to have come from the U.S. government.

The attorney general’s office says the company charged Idaho homeowners upfront fees ranging from $1,000 to $1,800 before the mortgage modifications were completed, which Idaho law prohibits.

The company, which has denied wrongdoing, was ordered to pay the 12 homeowners $19,710.

foreclosure rescue scams

87 Year Old Woman Gets Money For Her Stolen Home

By JAMES ELI SHIFFER, Minneapolis Star Tribune

An 87-year-old woman who was cheated out of her home of 50 years will receive $116,972 from the state, the largest pay-out in recent memory from a fund for victims of unscrupulous real estate professionals.

Telsche Paulson’s compensation from the Real Estate Education, Research and Recovery Fund was approved Wednesday by Hennepin County District Judge Susan Burke after Paulson’s lawyers and the state Department of Commerce reached an agreement on her claim.

The ruling is a milestone in Paulson’s long and frustrating legal journey, at a time of life that she expected to spend in comfortable retirement.

“I was happy that they decided to come through for me,” she said Thursday.

But the loss still hurts. She now lives with her son in a rented house in Farmington, far from the south Minneapolis duplex she lived in from 1958 to 2008. “This house isn’t like mine,” Paulson said. “It’s different.” (Read more)

foreclosure rescue scams

Cal Bar Encourages Parsa Clients To File For Restitution

Michael Finney, KGO-San Francisco – Thousands of distressed homeowners are looking for a way to get their money back after hiring a lawyer to save their homes.

 The families were left in a lurch when the lawyer suddenly resigned from the State Bar. But even before his resignation, investigators were raising questions about whether the attorney was doing more harm than good.

James Parsa advertised heavily on both television and radio up and down the state.

James Anderson signed a contract with Parsa and paid $3,500 up front to get a loan modification.

“What I got for my money was a big headache,” said Anderson.

Jeanine Barajas paid an advance fee of $5,000 for the same thing.

“I wouldn’t do it again if that’s what you mean,” she said.

The California State Bar told 7 On Your Side Parsa was one of 300 lawyers under investigation.

“Mr. Parsa was being investigated for his loan modification activities by the State Bar based on complaints we have received from clients. And as part of our investigation we learned that Mr. Parsa had a criminal conviction in 2001,” said Suzan Anderson from the California State Bar.

(Read More)

foreclosure rescue scams

Missouri AG Files Lawsuit Against First Universal Lending

Jefferson City, Mo. – Attorney General Chris Koster said today he is suing a Florida company that took money from distressed Missouri homeowners without providing any meaningful mortgage-modification service. Koster joined the Federal Trade Commission and the state of Iowa in taking legal action against the company.

This represents the eighth lawsuit against a fraudulent mortgage business since Koster began his campaign against mortgage fraud in April.

“This Attorney General’s office has instituted a zero tolerance policy for any mortgage modification firm that preys on and cheats desperate homeowners,” Koster said. “Our office will use all its powers to investigate and prosecute businesses involved in these foreclosure rescue schemes to defraud Missouri consumers.”

Koster said First Universal Lending, LLC, is based in Palm Beach Gardens, Florida, but transacts business throughout Missouri. He said the company markets its services to homeowners who are having difficulty paying their mortgages or facing foreclosure, promising them lower house payments or lower interest rates. In reality, the company appears to do little or nothing for most of its customers.

In addition, company representatives told some clients to stop making mortgage payments while the modification process was proceeding, which harms consumers by injuring their credit rating and resulting in higher late fees, penalties, and interest payments, as well as increased likelihood of foreclosure.

Koster said the business required people to pay up-front fees before they would provide any services, which is illegal for mortgage modification companies in Missouri.

Koster’s “zero tolerance” campaign against mortgage fraud in Missouri has resulted in eight lawsuits since April, with a number of additional official investigations currently underway.

Koster is asking the court to award restitution to consumers who suffered losses; impose appropriate monetary penalties; and issue preliminary and permanent injunctions prohibiting First Universal from violating Missouri consumer protection laws in the future.

Koster’s announcement today is part of a nationwide “sweep” on mortgage scams, called “Operation Stolen Hope.” The nationwide sweep is coordinated by the Federal Trade Commission, the U.S. Department of Justice, and 20 other states.

The Attorney General urges consumers who have been the victims of fraudulent mortgage-refinancing or foreclosure-relief companies, or who are concerned about the practices of their lender, to contact his consumer hotline at 800-392-8222 or to go online at ago.mo.gov

foreclosure rescue scams

2 More States Crack Down On Shady Mod Companies

The state of Colorado has barred the following Mod Companies from doing business in Colorado unless they begin complying with Colorado law which includes a ban on upfront fees:

• Abbotsford, LLC, d/b/a StopMyForeclosure.net and United Financial Solutions Group LLC located in Queen Creek, Ariz., and Phoenix, Ariz.;
• Airan2, Airan-Pace, Crose & Fernandez, P.A. a law firm located in Coral Gables, Fla.;
• American Summit Financial Services, Inc. and its owner Peter Johnson located in Boulder;
• Best Interest Rate Mortgage Company (BIRMCO) and its owner Michael DiPlacido, located in Westmont, N.J.;
• Financial Solutions Law Group, d/b/a Financial Solutions, and Echo Loans and its owner Kelly David Christensen located in Rancho Santa Margarita, Calif.;
• Hope 4 Homeowners America, LLC and its owner Cheryl Barnett located in Birmingham, Mich.;
• Key Mortgage, Inc. located in Baltimore, Md.;
• Gabee, LLC, d/b/a Modification HUB located in Granite Bay, Calif.;
• Modify Loans, Inc. located in Irvine, Calif.; and,
• Pier West Captial, Inc., d/b/a Loan Modification Solutions located in San Clemente, Calif. 

The state of New Jersey issued the following press release saying they were seeking restitution from illegally run Mod companies:

The Division of Consumer Affairs has mailed notices of violation to nine New Jersey-based companies that allegedly offered loan modification services to consumers without being licensed.

The nine companies each were cited for violating the state’s Consumer Fraud Act for engaging in unconscionable commercial practices by allegedly offering to negotiate mortgage modifications without being licensed as a debt adjuster by the Department of Banking and Insurance.

“Homeowners looking for mortgage help instead are becoming victims of fraud, and risk ending up in a worse situation,” Attorney General Anne Milgram said. “We want these nine unlicensed debt-adjuster companies to reimburse consumers for fees paid and to comply with our laws.”

The Notices of Violation are the latest in an on-going series of actions taken by the Office of the Attorney General and the Division of Consumer Affairs to protect consumers in the current mortgage and home foreclosure crisis. To date, 11 civil lawsuits have been filed against 102 defendants who allegedly committed mortgage or foreclosure fraud against consumers.

The Division also filed suit against a Lakewood-based firm, United Credit Adjusters, and obtained a court judgment in July that permanently barred the company from performing credit counseling, credit repair or debt adjuster work in New Jersey.

The nine companies each sent a Notice of Violation on November 24 are:

 Affordable Finance,LLC

Best Response Loan Modifications aka Best Response Loan Mod

EZ Financial Solutions, LLC

Best Response Loan

Home Rescue Today.Com, LLC (dba Financial Solutions Today)

Legal Loan Modifications, Inc.

Premier Services & Consultants, LLC

RJD Consulting, Inc. (dba RJD Mortgage)

United Global Services, LLC

Xtra-Financial, LLC

Each company has been assessed a $5,000 civil penalty, in addition to the noted restitution.

Each company has the option of not contesting the charges contained in the Notice of Violation and paying the civil penalty and restitution within 15 days. Each company also has the option of contesting the charges and requesting an administrative hearing before the Division.

Mortgage/Financial Fraud Unit staff in the Division’s Office of Consumer Protection conducted the investigations of these companies.

Consumers can find information on licensed debt adjusters on the Department of Banking and Insurance’s web site

Consumers may file complaints with the Division online or by calling 1-800-242-5846 (toll free within N.J.) or 973-504-6200.

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