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Despite the passing of the Florida Foreclosure Fraud Rescue Act, the Florida attorney general began investigating seven more foreclosure rescue companies, bringing the total number of companies under investigation to 11. The companies are based in Miami-Dade, Broward and Palm Beach county.
A Miami-based mortgage modification outfit, Lincoln Lending Services LLC, targeted Hispanics facing foreclosure, said state officials who sued the company in March. The suit filed by Attorney General Bill McCollum claimed Lincoln Lending and its owner, Rita Gomez, defrauded 10 homeowners and violated the state's deceptive and unfair trade practices law by assessing upfront fees.
The Attorney General is seeking a court order dissolving the companies and obtaining restitution for the consumers who paid money to these companies. Refunds may be hard to come by as the companies telephone numbers are already disconnected and the owners are likely nowhere to be found.
Showing posts with label foreclosure attorney. Show all posts
Showing posts with label foreclosure attorney. Show all posts
Monday, July 20, 2009
Former mortgage brokers profit from foreclosures by offering loan modification services
Many people are earning less these days as a direct or indirect result of the subprime mortgage crisis. But not those who had a hand in issuing the loans that caused it. Former mortgage brokers, many of whom arranged for dubious and questionable loans for riskier borrowers, are now making money as loan consultants. In essence, these former brokers are offering to assist borrowers now facing foreclosure as a result of the loans they should not have obtained in the first place. It should come as no surprise that these loan modification services are no more helpful to borrowers than the advice given to them in the first place.
In Los Angeles, former high risk broker Jack Sousanna reorganized his office under the name Federal Loan Modification Law Center. The new business venture charged large up front "retainer" fees, as much as $3500, and, according to a New York Times investigation, often produced little result for its clients. FedMod, the company who ran the modification center, is now defending itself in a lawsuit brought by the Federal Trade Commission.
As discussed in a previous post, Florida passed the Foreclosure Fraud Prevention Act to guard against such questionable business dealings. In Florida, foreclosure assistance firms or "rescue consultants"- defined as anyone who is not a lawyer, cannot charge upfront fees and must complete work as promised before collecting a fee.
But there is a relatively easy way to circumvent this law. A foreclosure consultant firm (which can be any set of individuals with little or no experience in law or real estate) can bring in an attorney partner and claim that they are operating as a law firm, as FedMod attempted to do. While this may ultimately land the attorney participating in such a scheme in considerable trouble, not to mention facing the loss of his/her license to practice law, that will be little consolation to anyone who gets caught up in such a scheme, and who may lose their home as a result of trusting an unscrupulous company masquerading as a law firm.
In Los Angeles, former high risk broker Jack Sousanna reorganized his office under the name Federal Loan Modification Law Center. The new business venture charged large up front "retainer" fees, as much as $3500, and, according to a New York Times investigation, often produced little result for its clients. FedMod, the company who ran the modification center, is now defending itself in a lawsuit brought by the Federal Trade Commission.
As discussed in a previous post, Florida passed the Foreclosure Fraud Prevention Act to guard against such questionable business dealings. In Florida, foreclosure assistance firms or "rescue consultants"- defined as anyone who is not a lawyer, cannot charge upfront fees and must complete work as promised before collecting a fee.
But there is a relatively easy way to circumvent this law. A foreclosure consultant firm (which can be any set of individuals with little or no experience in law or real estate) can bring in an attorney partner and claim that they are operating as a law firm, as FedMod attempted to do. While this may ultimately land the attorney participating in such a scheme in considerable trouble, not to mention facing the loss of his/her license to practice law, that will be little consolation to anyone who gets caught up in such a scheme, and who may lose their home as a result of trusting an unscrupulous company masquerading as a law firm.
Saturday, July 18, 2009
Facing foreclosure? What not to do
You’ve been served with a foreclosure action. Like many people, you are probably receiving lots of advice and unsolicited mail and telephone calls urging you to take one action or another. Foreclosure is overwhelming enough and now you have to decide what to do. Depending on your situation, there may be options for you and picking the best one is a matter of understanding the facts and circumstances and reviewing them with someone who is knowledgeable about both the law and the foreclosure process. If you make the wrong first move, your foreclosure action may be over before you have a chance to decide. Below some common mistakes made by homeowners facing foreclosure.
1. Do nothing: Remember when you were a little kid and you’d hide under the covers when you were scared? Many people have that same reaction as adults. If they ignore a problem, it will go away. In the case of foreclosure, the only thing that will go away if you ignore it is your house and the possibility of your keeping it or avoiding a judgment of foreclosure against you.
2. Go to court without representation: Some people decide that they will wait until there is a court date. At that point, they figure they will show up, tell the judge their story and he/she will not allow this to happen. This does not work because, while a judge may sympathize with your situation, the judge is required to follow the law. In order to prevent a foreclosure, you need to have a legal defense.
3. Fall victim to a scam: Unfortunately, there are people out there seeking to take advantage of homeowners who have been served with a foreclosure action. In a previous post, I discussed some of the more prominent foreclosure scams. Beware of any non lawyer who charges an upfront fee, anyone who offers to help by taking title to your home, or placing your home “in trust” while you work with the bank or any phone offers promising to stop foreclosure. Sadly, these scams exist and many who are already in an unfortunate situation have become victims.
1. Do nothing: Remember when you were a little kid and you’d hide under the covers when you were scared? Many people have that same reaction as adults. If they ignore a problem, it will go away. In the case of foreclosure, the only thing that will go away if you ignore it is your house and the possibility of your keeping it or avoiding a judgment of foreclosure against you.
2. Go to court without representation: Some people decide that they will wait until there is a court date. At that point, they figure they will show up, tell the judge their story and he/she will not allow this to happen. This does not work because, while a judge may sympathize with your situation, the judge is required to follow the law. In order to prevent a foreclosure, you need to have a legal defense.
3. Fall victim to a scam: Unfortunately, there are people out there seeking to take advantage of homeowners who have been served with a foreclosure action. In a previous post, I discussed some of the more prominent foreclosure scams. Beware of any non lawyer who charges an upfront fee, anyone who offers to help by taking title to your home, or placing your home “in trust” while you work with the bank or any phone offers promising to stop foreclosure. Sadly, these scams exist and many who are already in an unfortunate situation have become victims.
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