Posted using ShareThis
Scam Artists Trying to Exploit Obama’s Mortgage Rescue Plan, Officials Say – First 100 Days of Presidency – Politics FOXNews.comApril 6, 2009
As I mentioned in a previous post, I have someone close to me that recently became a victim of a foreclosure rescue scam. This person filed complaints with the Alabama Attorney Generals Office and the Florida Attorney Generals Office. This particular foreclosure rescue company is located in Jacksonville, Florida. My friend was contacted several times by the Florida AG office regarding their complaint. They were notified by them on Friday that they have filed a lawsuit against this particular company due to their complaint and others like them. I am pasting the press release from the Florida AG’s office.
Attorney General Bill McCollum News Release
April 3, 2009
Media Contact: Sandi Copes
Phone: (850) 245-0150
TALLAHASSEE, FL – Attorney General Bill McCollum today sued a Jacksonville company and its directors alleging the company is engaged in foreclosure rescue fraud. According to the lawsuit, National Foreclosure Counseling Services, Corp., operated by Raymond Paulk and Robert Dallavia, targeted homeowners facing foreclosure and charged up-front fees for loan modification services in violation of Florida law. The Attorney General also requested the Duval County Circuit Court issue an injunction against National Foreclosure Counseling Services requiring the company to immediately stop demanding up-front fees from customers before providing services.
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 National Foreclosure Counseling Services, Corp allegedly lured customers using mailings which implied the solicitations came from a government agency, claimed the consumers had been selected for special programs by “Government Insured Institutions,” and stated the mailings constituted a last attempt to assist the homeowners before foreclosure.
Before accepting a homeowner as a client, National Foreclosure Counseling Services Corp., would allegedly require the consumer to sign a “working agreement” which included an up-front “retainer fee” averaging $1,800, an up-front “processing fee” of $200, and an hourly fee of $125 for future services. The lawsuit further states that the company failed to perform the services following payment. National Foreclosure Counseling Services, Corp. offers services nationwide and has already been sued by the Attorneys General of Illinois and Minnesota.
The Jacksonville lawsuit, which has also requested consumer restitution, is one of several filed by the Attorney General since the Foreclosure Rescue Fraud Prevention Act became law on October 1, 2008. The law specifically addresses companies which claim they can save homes from foreclosure by negotiating or modifying the terms of the homeowners’ mortgages. Civil penalties for violating the law can be up to $10,000 per violation or $15,000 if the victim is a senior citizen or disabled individual. The Attorney General’s Office has received thousands of complaints about these companies and their services over the past several months.
Consumers who wish to file a complaint about the company may do so by filing an affidavit with the Attorney General’s Office. A form and instructions is available online at:
A copy of the lawsuit is available online at: http://myfloridalegal.com/webfiles.nsf/WF/JFAO-7QQSKU/$file/Complaint.pdf
If you would like to file a complaint against this company, go to:
To visit the Florida Attorney Generals Office website, please
With foreclosures at record highs and dominating the news, maybe mortgage fraud will get the attention it deserves! Check out this story from Fox News below.
Official: FBI Agents Going Undercover to Target Fraud in Mortgage Companies
Friday, March 20, 2009
FOX News’ Mike Levine contributed to this report.
WASHINGTON — The undercover agent may be a familiar player in drug investigations and mafia busts, but it turns out that undercover work also is under way in the FBI’s campaign to fight mortgage fraud.
FBI Deputy Director John Pistole, at a hearing Friday before the House Committee on Financial Services, said that agents have been sent undercover into companies to fight fraud and stem larger economic problems.
“The FBI has implemented new and innovative methods to detect and combat mortgage fraud … [including] undercover operations and wiretaps,” Pistole said. “These investigative measures not only result in the collection of valuable evidence, they also provide an opportunity to apprehend criminals in the commission of their crimes, thus reducing loss to individuals and financial institutions.”
The use of undercover agents is nothing new in the FBI’s effort to combat mortgage fraud. In September 2004, the agency announced action against 205 people in a nationwide investigation of financial institution fraud that included numerous cases of mortgage fraud. Undercover agents helped build some of those cases.
But the emphasis on mortgage fraud and other financial crimes has only increased in the recent economic downturn, which has partly been blamed on criminal or careless actions in the financial sector.
Pistole said there were “several” such undercover investigations under way, though it wasn’t immediately clear how they were being carried out and who was being targeted.
How do you avoid becoming a victim of mortgage fraud?
- Ask your friends, family, etc. for a recommendation for a reputable mortgage professional.
- Shop around! Check with a couple different lenders. Make sure you are comparing apples to apples. Have each person quote you their rates and closing costs on the same type of loan. For example, a lower interest rate may be available but you may be paying for it in your closing cost. If it sounds too good to be true, it probably is!
- Make sure that all the information you provide is truthful! Review all documents before signing to make sure they reflect the information you provided to your lender.
- Never sign blank, incomplete, or inaccurate pages or documents.
- Know what you are signing! Bring all of your loan information to the closing to compare against the loan documents if necessary. Don’t be afraid to ask questions! Do not sign documents that you haven’t read or don’t understand.
- Make sure you receive a complete set of the documents you sign at closing. Don’t leave the table without them!
- When in doubt, hire an attorney to review any documents you do not understand before you sign!
Are you facing foreclosure? You are not alone. It is estimated that 5,545,000 people are at risk of foreclosure right now. Many people in this position incorrectly think there aren’t any options for them, but many times a foreclosure can be avoided. If you find yourself falling behind on payments, here is what you should do.
Be proactive. Contact you loan servicer immediately.
- You can find the contact information on our monthly bill or coupon book.
- Lenders can work our plans to allow you to stay in your home.
- Ask about foreclosure alternatives.
- Be prepared to disclose detailed financial information.
- Provide requested information in a timely manner.
- Be ready to change your spending habits and create a budget.
- Open mail and respond to calls from your loan servicer promptly. Failure to respond in a timely manner can result in more foreclosure actions and additional cost.
Consider refinancing your loan. Refinancing to a fixed rate, fully amortized lower cost loan may help.
FHA offers a program that helps homeowners with good credit refinance. It’s called FHASecure.
Talk to a housing counselor. HUD approves trained counselors to work with not-for profits focused on preventing foreclosure.
Search for HUD counselors by clicking on the link below:
Get in touch with your local government agencies. Your city, state, or county may have programs for people having trouble making their mortgage payment.
Notify your other creditors. You may be able to lower interest rates on your credit cards or consolidate some of your other loans. You can put the savings towards your mortgage.
Create a budget. You may find areas you can save and put the money towards keeping your home.
Re-read your mortgage agreement. Understanding this document is critical.
Talk to a lawyer if you think you may have been a victim of predatory lending. Your local university may even host a legal clinic. There also may be fair lending counseling agencies in your area.
Beware of anyone who says you don’t need a real estate professional or title company when selling your home.
Do not sign over the deed to your property to any organization or person if you are not working directly with your lender to get your debt forgiven.
BEWARE!! DON’T BECOME THE VICTIM OF A SCAM!
Recently, I was contacted by someone I am close to. They were behind on their mortgage payments. They were too embarrassed to ask for my help, but the responded to an offer for help they received in the mail. This company promised them they could stop their lender from foreclosing. Of course, before they could stop the foreclosure my friends had to send them money. Unfortunately, my friends fell for a scam that is gaining popularity. I am including information below from the Federal Trade Commission website. If you are behind on your mortgage payments, it is likely you will receive many offers from companies like these.
Foreclosure Rescue Scams:
Another Potential Stress for Homeowners in Distress
The possibility of losing your home to foreclosure can be terrifying. The reality that scam artists are preying on the vulnerability of desperate homeowners is equally frightening. Many so-called foreclosure rescue companies or foreclosure assistance firms claim they can help you save your home. Some are brazen enough to offer a money-back guarantee. Unfortunately, once most of these foreclosure fraudsters take your money, they leave you much the worse for wear.
Fraudulent foreclosure “rescue” professionals use half truths and outright lies to sell services that promise relief and then fail to deliver. Their goal is to make a quick profit through fees or mortgage payments they collect from you, but do not pass on to the lender. Sometimes, they assume ownership of your property by deceiving you, the homeowner. Then, when it’s too late to save your home, they take the property or siphon off the equity. You’ve lost your home to foreclosure despite your best intentions.
If you think you may be facing foreclosure, the Federal Trade Commission (FTC), the nation’s consumer protection agency, wants you to know how to recognize a foreclosure rescue scam. And even if the foreclosure process has already begun, the FTC and its law enforcement partners want you to know that legitimate options are available to help you save your home.
How the Scams Work
Foreclosure rescue firms use a variety of tactics to find homeowners in distress: Some sift through public foreclosure notices in newspapers and on the Internet or through public files at local government offices, and then send personalized letters to homeowners. Others take a broader approach through ads on the Internet, on television, or in the newspaper, posters on telephone poles, median strips and at bus stops, or flyers or business cards at your front door. The scam artists use simple and straight-forward messages, like:
“Stop Foreclosure Now!”
“We guarantee to stop your foreclosure.”
“Keep Your Home. We know your home is scheduled to be sold. No Problem!”
“We have special relationships within many banks that can speed up case approvals.”
“We Can Save Your Home. Guaranteed. Free Consultation”
“We stop foreclosures everyday. Our team of professionals can stop yours this week!”
Once they have your attention, they use a variety of tactics to get your money:
Phony Counseling or Phantom Help
The scam artist tells you that he can negotiate a deal with your lender to save your house if you pay a fee first. You may be told not to contact your lender, lawyer, or credit counselor, and to let the scam artist handle all the details. Once you pay the fee, the scam artist takes off with your money.
Sometimes, the scam artist insists that you make all mortgage payments directly to him while he negotiates with the lender. In this instance, the scammer may collect a few months of payments before disappearing.
You think you’re signing documents for a new loan to make your existing mortgage current. This is a trick: you’ve signed documents that surrender the title of your house to the scam artist in exchange for a “rescue” loan.
You’re told to surrender the title as part of a deal that allows you to remain in your home as a renter, and to buy it back during the next few years. You may be told that surrendering the title will permit a borrower with a better credit rating to secure new financing – and prevent the loss of the home. But the terms of these deals usually are so burdensome that buying back your home becomes impossible. You lose the home, and the scam artist walks off with all or most of your home’s equity. Worse yet, when the new borrower defaults on the loan, you’re evicted.
In a variation, the scam artist raises the rent over time to the point that the former homeowner can’t afford it. After missing several rent payments, the renter – the former homeowner – is evicted, leaving the “rescuer” free to sell the house.
In a similar equity-skimming situation, the scam artist offers to find a buyer for your home, but only if you sign over the deed and move out. The scam artist promises to pay you a portion of the profit when the home sells. Once you transfer the deed, the scam artist simply rents out the home and pockets the proceeds while your lender proceeds with the foreclosure. In the end, you lose your home – and you’re still responsible for the unpaid mortgage. That’s because transferring the deed does nothing to transfer your mortgage obligation.
Fraudulent foreclosure “rescue” professionals use half truths and outright lies to sell services that promise relief and then fail to deliver.
The scam artist may promise to negotiate with your lender or to get refinancing on your behalf if you pay a fee up front. Instead of contacting your lender or refinancing your loan, though, the scam artist pockets the fee and files a bankruptcy case in your name – sometimes without your knowledge.
A bankruptcy filing often stops a home foreclosure, but only temporarily. What’s more, the bankruptcy process is complicated, expensive, and unforgiving. For example, if you fail to attend the first meeting with the creditors, the bankruptcy judge will dismiss the case and the foreclosure proceedings will continue.
If this happens, you could lose the money you paid to the scam artist as well as your home. Worse yet, a bankruptcy stays on your credit report for 10 years, and can make it difficult to obtain credit, buy a home, get life insurance, or sometimes get a job.
Where to Find Legitimate Help
If you’re having trouble paying your mortgage or you have gotten a foreclosure notice, contact your lender immediately. You may be able to negotiate a new repayment schedule. Remember that lenders generally don’t want to foreclose; it costs them money.
Other foreclosure prevention options, including reinstatement and forbearance, are explained in Mortgage Payments Sending You Reeling? Here’s What to Do, a publication from the FTC. Find it at www.ftc.gov.
You also may contact a credit counselor through the Homeownership Preservation Foundation (HPF), a nonprofit organization that operates the national 24/7 toll-free hotline (1.888.995.HOPE) with free, bilingual, personalized assistance to help at-risk homeowners avoid foreclosure. HPF is a member of the HOPE NOW Alliance of mortgage servicers, mortgage market participants and counselors. More information about HOPE NOW is at www.995hope.org.
If you’re looking for foreclosure prevention help, avoid any business that:
guarantees to stop the foreclosure process – no matter what your circumstances
instructs you not to contact your lender, lawyer, or credit or housing counselor
collects a fee before providing you with any services
accepts payment only by cashier’s check or wire transfer
encourages you to lease your home so you can buy it back over time
tells you to make your mortgage payments directly to it, rather than your lender
tells you to transfer your property deed or title to it
offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale
offers to fill out paperwork for you
pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand.
If you’re having trouble paying your mortgage or you have gotten a foreclosure notice, contact your lender immediately.
If you think you’ve been a victim of foreclosure fraud, contact:
Federal Trade Commission
Your state Attorney General
Your local Better Business Bureau
For More Information
To learn more about mortgages and other credit-related issues, visit www.ftc.gov/credit and MyMoney.gov, the U.S. government’s portal to financial education.
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.