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California Homeowners Can Stop Foreclosure with Loan Modifications, Forensic Loan Audits and Negotiated Mortgage Loan Modification Terms.
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09 Aug 10 Mortgage Relief Scams Targeted by FTC

Unfortunately many unscrupulous loan modification companies have committed mortgage relief fraud with shady loan mod scams across the country.  The Federal Trade Commission announced in April of 2009, it would pursue “fraud and deception by mortgage loan modification and home foreclosure companies,” The agency seeks to halt “the proliferation of mortgage relief scams targeting distressed and vulnerable consumers who are delinquent or facing foreclosure,” said FTC Chairman Jon Leibowitz. He was joined by Treasury Secretary Tim Geithner and representatives of the Department of Housing and Urban Development and various state enforcers. See also its Nov. 24 release on Operation Stolen Hope.

Mortgage Fraud Victims

In this video, Latour “LT”Lafferty, attorney with Fowler White Boggs, identifies which mortgage fraud schemes consumers should look out for.

On July 29, the FTC announced Home Assure LLC, a company allegedly deceiving consumers with promises it could save their homes from foreclosure, will pay $2.4 million to victims in a settlement with the FTC. The case is part of the agency’s continuing crackdown on scams that prey on financially distressed homeowners.   The agency’s complaint alleges “Home Assure LLC conducted a nationwide marketing campaign designed to take advantage of struggling homeowners by offering so-called mortgage relief and home foreclosure prevention services. Home Assure typically charged consumers up-front fees of $1,500 to $2,500.” Company representatives falsely claimed its “special relationships with lenders would enable it to get favorable loan modifications or stop foreclosures, and that the company had helped thousands of consumers avoid foreclosure.”

The FTC works for consumers to prevent fraudulent, deceptive and unfair business practices. The agency sends complaints to Consumer Sentinel, a secure, online database available to 1,800 civil and criminal law enforcement agencies Read more from this Tulsa World article.

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19 Jun 10 Are California Loan Modification Plans Working for Lenders?

Thousands of struggling California homeowners have been screaming for years to get additional mortgage relief. Did you know that banks holding mortgage notes foreclosed on nearly 200,000 homes in California last year? Worse yet, it looks like the California loan modification plans are not working because 2010 toll looks like it will increase last year’s totals for loan defaults. California state lawmakers continue to try and plead with the lending banks to do extend more loan workouts that help both sides. Yet homeowner advocates say a serious problem remains. SB 1275 would prevent mortgage lenders and banks from foreclosing on borrowers who are seeking to modify their loans.

According to the LA Times, Many mortgage lenders are “overwhelmed and disorganized but they continue to foreclose on borrowers who are actually in the process of finalizing a home loan modification that would ensure more affordable monthly payments. At a time when the housing market is flooded with foreclosed homes, this doesn’t help anyone. The federal government rolled their attempt to stem the foreclosure crisis with the Home Affordable Modification Program that was created to stop lenders from foreclosing while a modification is pending, but other initiatives don’t.

California Senators Mark Leno and Darrell Steinberg are proposing to extend the same protection to all Californians seeking loan modifications. The California loan modification bill (SB 1275) would stop a home loan lender or mortgage service company from initiating the foreclosure process until after a mortgage loan modification application was denied. It’s a modest change that wouldn’t require mortgage lenders to change the terms of any loan modification program. Nor would it require lenders to do more to reach borrowers before foreclosing than state law already requires or to slow down foreclosures on borrowers who are beyond help. The law would require mortgage lenders to notify borrowers who get behind on their home loan payments about the foreclosure process and the availability of home refinancing or loan modification options, if any. And if borrowers applied unsuccessfully for a loan workout, the mortgage company would have to send them a letter explaining why they were denied and how they can appeal the decision before filing a notice that the mortgage was in default. The purpose of the bill was not just another attempt to help homeowners avoid making their mortgage payments; but it was created to help protect lenders from themselves. A recent report revealed that Housing counselors say the No. 1 problem is poor communication between mortgage companies and distressed borrowers.

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21 Jul 09 FTC Shuts Down Loan Modification Scams

The U.S. Federal Trade Commission and authorities in 20 states have sued dozens of individuals and companies as part of what they said on Wednesday was a crackdown on loan modification scams that have multiplied in the housing meltdown.  The 189 lawsuits and other court actions target the “con artists” who offer to help homeowners facing foreclosure, only to take up-front fees and perform little or no service.  “It’s an operation full of hollow promises designed to fatten the pockets of criminals and con artists,” FTC Chairman Jon Leibowitz said in announcing the move at a press conference in Los Angeles.  “These con artists see the high foreclosure rates as an opportunity to prey on people in distress,” Leibowitz said. “They promise to rescue homeowners in troubled financial waters but after they take their money they throw them an anchor instead of a lifeline.”

U.S. mortgage fraud reports jumped 36% last year as desperate homeowners and industry professionals tried to maintain their standard of living from the boom years, the U.S. Federal Bureau of Investigation said last week, calling fraud rampant and growing.  Leibowitz said that many who offer loan modification schemes deceive homeowners by posing as quasi-governmental agencies or implying that they are working with federal agencies and cautioned consumers to be aware of the scams.

According to Real Estate News Publication, Housing Crisis Under Fire, California loan modification scams lead the nation in loss mitigation fraud.  California Attorney General Jerry Brown said his office had sued 21 individuals and 14 companies accused of scamming homeowners, saying that many of the operations were based in Orange County, south of Los Angeles. Also Brown said that bogus loan modification scams had proliferated widely following the subprime meltdown and housing crash, to the point where authorities with limited resources were unable to effectively pursue all of them.  “We’re going to do everything we can to stop it, realizing that there are more of these rats that come out of their holes than we can stomp on,” Brown said. “This is one of the more egregious wrongs we see committed in society and we are going to fight it.” 

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24 Jun 09 Foreclosure Moratorium California Loan Modifications

The State of California announced a new state law imposing a 90-day moratorium on foreclosures is in effect. Under this mortgage relief initiative, California lenders must prove that they made an effort to provide a loan modification with delinquent mortgages before they begin the foreclosure process. During that time home loan servicers can carry on with business as usual, including foreclosing on delinquent accounts. The State announced the California foreclosure moratorium would go into effect immediately, but will the major mortgage lenders fall into line with it?

California Foreclosure Moratorium Guidelines:

ü The moratorium applies to first mortgages made from 2003 through 2007.

ü The home loan must be for your principal residence.

ü The homeowner must have received a notice of default.

ü The home loan servicer does not have a California loan modification program in place.

ü Because many homeowners are upside down on their home loans

There is a concern that the 90-day negotiating period will only postpone the inevitable because so far the banks are not reducing the principal. Read the complete Article from the Loan Modification Outlet.> Loan Modification Plans and California Foreclosure Moratorium

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31 Mar 09 Mortgage Relief Comment from Wells Fargo Post

Low and behold, I was astounded to see today that Wells Fargo made a comment about mortgage relief and loan modification qualifications in a blog post. I was shocked not because Wells Fargo was associated with a loan workout, but because it is not their public relations style to comment on a blog about their specific role in the foreclosure prevention arena. Wells Fargo has extended thousands of mortgage modification plans to homeowners over the last few years and I really think that the media and homeowners have given them a “bum rap” that is not warranted.

Let’s not forget that Wells Fargo never offered 2-year adjustable mortgages and high risk option ARM’s with the 1% teaser rates that Chase, WAMU, IndyMac, Countrywide, World Savings and pretty much every other subprime mortgage company offered a years back.

Here is the unsubstantiated comment: “Knowing that it would probably be unlikely that Wells Fargo could comment publicly on the mortgage issues facing the Kropkowski family, I still asked the company for a response early Monday. This came in Monday night, just after my column deadline:

“During a time of financial hardship, various workout options are explored and may be available to customers.  If a homeowner can’t demonstrate financial ability to afford a loan modification under the investor guidelines, Wells Fargo is unable to extend a loan modification.  Due to customer confidentiality and other privacy considerations, Wells Fargo cannot share specific customer loan information beyond what the customer has chosen to make public.” Debora Blume, in the Communications Dept. of Wells Fargo Home Mortgage. Original Blog Post >

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08 Mar 09 Loan Modifications Help Keep Homeowners Away from Foreclosure

New federal program aims to help those with no equity, or borrowers who are delinquent on their first or second mortgages. In some cases, the borrower may behind on both 1st and 2nd loans.

Understanding mortgage loans can be confusing enough, and now comes a new maze of incentives, eligibility requirements and loan workout options under the recently announced two-pronged federal program to rescue troubled homeowners. The new federal Making Home Affordable program is aimed at helping homeowners who are current but have little or no equity in their homes by refinancing their loans, and at delinquent or at-risk borrowers by restructuring their home loans.

What happens in a mortgage refinancing or loan modification is contingent on three factors: The modification rules set for lenders and loan servicers who join the federal program; the homeowner’s circumstances, such as family hardships; And the mortgage lender, investor or loan servicer, who has some leeway and incentives in deciding on changes to the loan. Article written BY ELLEN YAN

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03 Feb 09 Home Loan Defaults and the State of California Housing

A law that requires mortgage lenders to discuss ways to avoid foreclosure with California borrowers before filing a default notice went into effect in September. Defaults plunged to 14,995 that month, and were back up to 39,993 in December. `No one expected defaults to stay at the much lower levels we saw immediately after the new law took effect,” MDA DataQuick President John Walsh said in a statement.

In a recent report, MDA DataQuick said that California home loan defaults declined 7.7 % in the 4th quarter after the state enacted a law to delay home foreclosures. California homeowners received 75,230 default notices in the fourth quarter, down from 81,550 a year earlier. 4th quarter defaults dropped 20% from the previous three months, according to DataQuick. Kelly Media Group President, Jason Cardiff commented, “When homeowners are waiting to modify their home loan, most mortgage lenders don’t report loan defaults even if the borrower is behind six months.” Cardiff continued, this means “We need to be extremely cautious when considering foreclosure data and housing reports.” See the complete California real estate article> Southern California Home Sales up 50% but Most Are Foreclosures.

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