The task force, established by President Barack Obama in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes, is composed of representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement.  The first summit was held in Miami because of the high rate of mortgage fraud in the region.

The Miami-Fort Lauderdale-Pompano Beach metropolitan area is ranked first in the nation for the number of local subjects named in Suspicious Activity Reports (SARs) filed by depository institutions concerning suspected mortgage fraud, according to a recent Financial Crimes Enforcement Network (FinCEN) study. And according to FinCEN data, Florida has consistently ranked second in the nation for mortgage fraud SARs, only behind California. 

Today, the task force members met with Miami community members, banking, mortgage, and real estate industry representatives and law enforcement officials to discuss the problem of mortgage fraud from a national, state and local perspective. In the morning, attendees participated in panels on the community impact of mortgage fraud and the evolution of the crisis.

In the afternoon, task force representatives will meet privately with law enforcement officials involved in the investigation of mortgage fraud.  “This task force has a straightforward mission: To protect families against financial fraud and restore the confidence of consumers in our markets,” said Assistant Attorney General for the Civil Division Tony West.

“We will hold accountable not just those responsible for the corporate fraud that created our current financial crisis, but those responsible for the financial fraud that affects too many working families, like mortgage fraud and lending discrimination. And by holding these people accountable, we will seek to prevent another meltdown from happening again.”  “The mortgage fraud crisis cannot be ignored. Mortgage fraud puts lenders at risk, and forces homeowners to confront the real possibility of foreclosures, or worse, the loss of their homes,” said U.S. Attorney for the Southern District of Florida Jeffrey H. Sloman.

“Nowhere is the problem more serious than here in Florida. Since September 2007, our mortgage fraud initiative has resulted in the prosecution of 282 individuals at all levels of the mortgage process, resulting in more than $343,669,434 in fraudulent mortgage loans. We will continue to do our part to investigate and prosecute these fraudsters, in the hopes of stemming the tide of fraud that has swept the mortgage industry.”  “Different parts of the country experience mortgage fraud in different ways.

We are here in Miami, in part, to learn about the nature of the problem and the enforcement efforts to date in this region, so that we can determine how best to facilitate enforcement efforts nationally,” said U.S. Attorney for the Eastern District of California Benjamin B. Wagner. “This summit is the first of at least three similar summits that the Mortgage Fraud Working Group will be holding around the country. We hope to gather more information about the nature of the problem in different regions and help coordinate an effective law enforcement response.” 

“The HUD OIG helped craft into legislation last year a penalty of up to 30 years in prison and $1 million in fines for committing FHA fraud,” said Inspector General of the Department of Housing and Urban Development Kenneth M. Donohue. “The OIG, working with U.S. Attorneys across the country, will endeavor to use these new penalties to prevent and confront fraudulent activities. We will use any means at our disposal, whether criminal, civil, or administrative, to stop those who are impacting the soundness of HUD’s FHA program at such a critical time.”

“The mortgage fraud crisis in Florida is similar to a state of emergency, and Florida Attorney General Bill McCollum knows we have to take an all-hands-on-deck approach to effectively address our citizens' concerns. The Florida Attorney General's Office will continue working with its federal, state, and local partners to protect homeowners from mortgage fraud and foreclosure rescue and loan modification scams. Everyone must work together if we are going to make a difference,” said Regional Deputy Attorney General Cynthia Guerra. 

“As long as criminals are out to make a quick buck by preying on homeowners and lenders, we will continue to work side-by-side with our partners to protect the American dream for years to come and ensure that criminals who try to enrich themselves through mortgage fraud schemes are brought to justice,” said FBI Deputy Assistant Director for the Criminal Investigative Division Karen Spangenberg. 

Also participating in the summit were the Executive Director of the Financial Fraud Enforcement Task Force Robb Adkins, FinCEN Director James H. Freisa, Jr., and representatives from the U.S. Secret Service, Federal Deposit Insurance Corporation, and the Miami-Dade Police Department. The Miami summit is the first in a series of meetings to occur in the coming months, with additional dates and locations to be announced.  Mortgage fraud is a key focus of the Financial Fraud Enforcement Task Force’s efforts.

The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.  

Sterling Hgts. Realtor, Ralph Roberts has accepted the American Bankruptcy Institute’s membership invitation. 

Founded in 1982, the American Bankruptcy Institute is the largest multi-disciplinary, non-partisan organization dedicated to research and education on matters related to insolvency. The ABI provides information to Congress and the public with its unbiased analysis of bankruptcy issues.   ABI’s membership includes more than 12,000 attorneys, auctioneers, bankers, judges, lenders, professors, turnaround specialists, accountants and other bankruptcy professionals providing a forum for the exchange of ideas and information.  

Ralph R. Roberts has helped thousands of consumers over four decades realize the American dream of homeownership one house at a time.

Dubbed by Time Magazine as “the best-selling REALTOR® in America,” and often characterized as the Michael Jordan or the Babe Ruth of his industry, the metro Detroit-based Realtor is in his fourth decade as the top dog in one of the nation’s most competitive businesses.

Roberts is a recognized authority on Residential Foreclosure Real Estate; Personal Salesmanship; Mortgage Fraud; and, Sales Force and Office Management, Motivation, and Design.  Since he bought his first house more than 35 years ago at the age of 18, Ralph has consistently demonstrated an uncanny knack for “closing the deal”.  

Today Roberts specializes in helping residential home-owners avoid losing their homes due to real estate’s bubble burst five year’s ago.  Twelve months ago, Roberts initiated his American Home Saver Program here in Michigan.  In every case, the Oakland County foreclosure expert saves the family home to the owner’s disbelief. 

Not only are the home owners coming out of foreclosure in Oakland County find Ralph Roberts’ results incredible, but Realtors and professionals in the real estate community look at his results in disbelief.  

Roberts believes that his association with the American Bankruptcy Institute will ultimately help him in his efforts as he grows his Home Saver Program.  “A primary reason families are losing their homes in today’s economy is due to a credit issue created by a bankruptcy,” explained Roberts.  “I expect my association with the ABI to educate myself with bankruptcy issues and saving homes from foreclosure.” 

To learn more about Roberts’ American Home Saver Program you can contact him directly with the information below or visit his website at www.ralphroberts.com/ 

Ralph Roberts Realty, LLC

12900 Hall Road, Suite 300

Sterling Heights, Michigan 48313 

Phone:  (586) 751-0000

Fax: (586) 620-6449

RalphRoberts25@gmail.com 

The collapse of the U.S. housing and mortgage-backed securities markets has raised the stakes in real estate workouts and loan negotiations as never before -- and both investors and legal professionals must retool their strategies to reflect these new realities, advised veteran bankruptcy and construction attorney Jeffrey M. Zalkin, a partner in LeClairRyan, based in the firm's New York office.

During "Negotiating Real Estate Loan Terms & Workout Options," a Feb. 3 legal seminar organized by the National Business Institute, Zalkin described the gamut of bankruptcy implications in this environment before an audience of attorneys, in-house counsel, loan officers and paralegals. His presentation at the event, held in Melville, N.Y., included key issues related to automatic stay, letters of credit, noteworthy foreclosure litigation, treatment of secured claims, and more.

Given the increasing prevalence and complexity of workouts amid the real estate collapse, the onus is now on investors, real estate loan negotiators and risk managers to adopt the savviest-possible strategies, said Zalkin, who has been heavily involved in the sub-prime crisis since it emerged in 2006 while working on one of the largest residential real property-oriented fraud cases ever filed in U.S. Bankruptcy Court in New Jersey.

While many commercial real estate professionals hope in earnest for a revival of the CMBS markets in 2011, he noted, their proper focus today ought to be on salvaging their earlier investments. "Extreme caution and the utmost planning and cash-flow analysis must precede revival of the real estate market," he commented. Indeed, an avalanche of forced sales of distressed shopping centers, office buildings and other commercial properties is likely to occur in coming quarters, putting further pressure on existing assets.

In his presentation, Zalkin gave lenders' counsel concrete advice on a host of issues related to winning relief from the "automatic stay" protections often enjoyed by debtors under the Bankruptcy Code. He also discussed similar issues related to letters of credit, both commercial and standby, and offered a detailed look at the dynamics related to preferences in situations where a workout or modification occurred within the bankruptcy preference period. In addition, his presentation put a spotlight on key issues associated with the treatment of secured claims, sale of assets, proof of claims and plan objections, and noteworthy foreclosure litigation.

Commenting on the real estate investment outlook, Zalkin noted the manifold challenges, both psychological and financial, now facing investors. "This recession has instilled overpowering fear in the 'long-term' investors -- the life blood of real estate projects," he said. "Moreover, no one believes that the full measure of losses from the real estate investment frenzy of 2006 to 2008 has arrived yet. Indeed, those investors who challenged the downturn in 2008 ended up being losers, and the investment community is now, for the most part, shying away due to lack of stability in most cash flows and a worldwide lack of stable short- or long-term credit."

In many instances, Zalkin noted, the prior business models that were predicated upon the unending spending spree by American consumers now have become unreliable. "Overall, there is a need to cure the credit markets' incredible contraction," he said. "Real estate fundamentals are weak, including prior growth projections which are being scrapped. Tenants, meanwhile, are becoming scarce."

Without exception, the contraction has eroded the once-"reliable" position that real estate investment held for more than a decade -- a position that enticed new investors in droves. "Today's bond market demands scrutiny at all three levels: new issuances, pricing and performance of both old and new issuances," Zalkin said. "We do hear rumors that private-sector investors may materially supplant many institutional lenders. Reorganization of operations to keep real estate interests, whether a fee-simple or a leasehold interest, has fallen to immediate liquidation in a host of large-scale retail space scenarios. More than once, the salvage step of 'auction sale' by mortgagor-debtors has received very cool or no response nor serious inquiry for acquisition. Without availability in the credit markets, good acquisition opportunities are languishing."

Yet the attorney believes an eventual re-tooling of the old paradigm of investment structures should restore basic reliability to real estate investment. All of these dynamics, he underscores, will likely have major implications for attorneys involved in negotiating real estate loan terms at acquisition and workouts to avoid bankruptcy.

About LeClairRyan

A business-minded law firm, LeClairRyan specializes in developing legal solutions to its clients' business challenges.  Founded in 1988, LeClairRyan provides business counsel and client representation in corporate law and high-stakes litigation.  With offices in California, Connecticut, Massachusetts, Michigan, New Jersey, New York, Pennsylvania, Virginia and Washington, D.C., the firm has more than 300 attorneys representing a wide variety of clients throughout the nation. 

I posted this blog on ActiveRain in October of 2006. 

With Mortgage Fraud eroding today's real estate world like locust devouring a jungle, these words bear repeating today.

Fixing the System

(ActiveRain, October 2006)  "Con artists will always find ways to exploit vulnerabilities in the system, but the system can fight back. My BLOG FLIPPINGFRENZY.COM reveals how everyone involved in real estate--from buyers and sellers to real estate professionals to law enforcement officers and regulators, all the way up to government officials--can work together to close the loopholes and make the system less vulnerable to fraud. By being honest and vigilant and by advocating for positive change at all levels, we can crowd out the con artists, making it nearly impossible for them to operate."

The information presented here should be considered a starting point and we encourage everyone to fully research any information you are seeking.  If any reader feels they need a better understanding of their personal situation, feel free to contact me with a comment below this article.

Report Mortgage Fraud, Mortgage Scams and Predatory Lending

When homeowners or borrowers suspect they may be a victim of a Con-Artist’s work, they have many legal resources available to help them. Potential victims need to report mortgage fraud, mortgage scams, or predatory lending practices as soon as there is an indication these might exist. Waiting to make sure can be costly. Both on the national level and on the state level, government and private organizations are available to answer questions and provide help.

A quick ‘rule-of-thumb’ on who to contact:                                                                        

If you suspect you are a victim of mortgage fraud, contact the local FBI office; if you suspect or need to report predatory lending practices or other abusive-types of lending, contact your state Attorney General’s office; if you suspect or need to report mortgage scams by a real estate broker or appraiser, contact the state’s real estate licensing board or appraisal licensing board. The Better Business Bureau is also an excellent resource if you think you are a victim of fraud. These and many other sources of help are listed below.

National Resources for Reporting Mortgage Fraud and Scams

The Federal Bureau of Investigation (FBI)
http://www.fbi.gov/
(202) 324-3000 – National FBI Financial Institution Fraud Unit

The FBI, a branch of the United States Department of Justice, is authorized to investigate and enforce criminal laws of the U.S. The FBI investigates criminal acts involving potential violations of the United States Federal Criminal Code. State authorities investigate criminal acts which are violations of their state’s criminal laws.

In conjunction with the ‘White Collar Crime’ department, the FBI investigates mortgage fraud, which often involves many professionals working in collusion: bank loan officers, realtors, appraisers, accountants, and mortgage brokers. All of these profit through various commissions, fictitious sales and fees – often on loans that aren’t genuine.

To report mortgage fraud with the FBI, contact the Field Division listed under each state.

The Federal Trade Commission (FTC)
http://www.ftc.gov/ and www.consumer.gov/idtheft and
To file complaint
Consumer Response Center
600 Pennsylvania Avenue, N.W.
Washington DC 20580
Toll Free Phone: (877) 438-4338 – Identity Theft Clearinghouse
Consumer Response Center: (877) 382-4357

While the Federal Trade Commission does not actually resolve an individual consumer’s problem, it does investigate mortgage fraud with the aim of leading to law enforcement action. The FTC is especially active regarding homeowner and mortgage ‘identity theft.’
In addition to reporting mortgage fraud and scams to other appropriate agencies, filing with the FTC helps put the Con-Artists out of business.

National Banks

To report fraud or register a complaint about a national bank, contact
Office of the Comptroller of the Currency (OCC)
Comptroller of the Currency
Midwestern District Office
http://www.occ.treas.gov/customer.htm
2345 Grand Avenue, Suite 700
Kansas City, MO, 64108-2683
Phone: (800) 613-6743
The OCC charters, regulates and supervises over 2,500 national banks.

Federal Savings and Loan Associations

To report fraud or register a complaint about a federal savings and loan association, contact
Office of Thrift Supervision (OTS)
Consumer Affairs
http://www.ots.treas.gov/resultsort.cfm?catNumber=88&dl=17&edit=1
E-mail: consumer.complaint@ots.treas.gov
1700 G Street NW
Washington, D.C. 20552
Phone: (202) 906-6000
Phone: (800) 842-6929 – for consumer complaints

The Office of Thrift Supervision (OTS), a bureau of the U.S. Department of the Treasury, regulates all federally chartered and some state-chartered thrift institutions. This includes savings and loan associations and savings banks. The OTS has regional offices in all states, divided into four regions. To report mortgage fraud or mortgage scams that pertain to a savings & loan association or savings bank, see the contact information listed under each state.

Federal and State Chartered Credit Unions

National Credit Union Association (NCUA)
http://www.ncua.gov/ConsumerInformation/Consumer%20Complaints/complaintmain.htm
4807 Spicewood Springs Road, Suite 5200
Austin, TX 78759-8490
Phone: (512) 349-4500

The NCUA can handle complaints concerning a federally chartered credit union and all credit unions chartered in Delaware, South Dakota, Wyoming or Washington, DC. Complaints are handled by one of the five Regional Offices located in Albany, NY: Tempe, AZ” Alexandria, VA: Austin, TX; and Atlanta, GA. To report mortgage fraud or mortgage scams that pertain to a federal credit union, see the contact information listed under each state.

State Chartered Credit Unions
http://www.ncua.gov/ConsumerInformation/Consumer%20Complaints/statechartered.htm
Each state supervises the Credit Unions that it charters, except for Delaware, South Dakota, Wyoming or Washington, DC. To report mortgage fraud or mortgage scams that pertain to a state credit union, see the contact information listed under each state.

The National Association of Attorneys General
http://www.naag.org/issues/issue-consumer.php
750 First Street, NE, Suite 1100
Washington, DC 20002
Phone: (202) 326-6000
Fax: (202) 408-7014

The role of the Attorney General in each state is to protect and serve the citizens. The office of the Attorney General provides legal representation for the State and its various agencies, in behalf of the public interest. However, the Attorney General’s Office may not perform legal advice for consumers or represent them. These offices do want you to report mortgage fraud, predatory lending practices, and mortgage scams to them. Almost all Attorney General Offices provide consumer complaint forms on their web sites to make reporting mortgage scams and fraud easier. These offices are seriously dedicated to assisting the citizens of the state. The National Attorneys General Office consolidates the individual state’s actions against predatory mortgage lending practices.

The Office for Victims of Crime (OVC)
http://www.ojp.gov/ovc/publications/welcome.html
The Office for Victims of Crime (OVC) publishes literature on various victim situations, such as identity theft. An “Attorney General Guidelines for Victim and Witness Assistance” can be obtained online, along with information on federal grant programs to obtain financial assistance if you are a crime victim. (http://www.ojp.gov/ovc/publications/welcome.html#m)

The Better Business Bureau (BBB)
The Council of Better Business Bureaus
http://complaint.bbb.org/
4200 Wilson Blvd, Suite 800
Arlington, VA 22203-1838

The Better Business Bureau (BBB), a system of over 120 independent, local Better Business Bureaus, aims at resolving complaints and keeping the public informed. For best results it is best to contact your local Better Business Bureau, rather than the National Office. However, the National Office is still available to help you. Local contacts can be found listed under the state.

Federal Reserve Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/pubs/complaints
20th Street and Constitution Avenue NW
Washington, DC 20551

National Consumers League (NCL)
http://www.nclnet.org/
info@nclnet.org
1701 K Street, NW, Suite 1200
Washington DC 20006.
Phone: (202) 835-3323
Fax: (202) 835-0747

National Fraud Information Center
http://www.fraud.org/
The National Fraud Information Center is a project of the National Consumers League. It focuses mainly on fraud against the <em>elderly</em>, and internet and telemarketing fraud – all sources of mortgage fraud and mortgage scams.

Center for Responsible Lending
www.responsiblelending.org
302 West Main Street
Durham, NC 27701
Phone: (919) 313-8500
Fax: (919) 313-8595

910 – 17th Street NW, Suite 500
Washington, DC 20006
Phone: (202) 349-1850
Fax: (202) 289-9009

Predatory Lending & Victim Referral Services:
anna.moore@responsiblelending.org
Phone: (919) 313-8523

Mortgage Bankers Association
http://www.stopmortgagefraud.com/
Phone: (800) 348-3931 to report abuse
1919 Pennsylvania Avenue, NW
Washington, DC 20006-3438
Phone: (202) 557-2700

National Association of Mortgage Brokers
http://www.namb.org/
8201 Greensboro Drive, Ste. 300
McLean, VA 22102
Phone: (703) 610-9009
Fax: (703) 610-9005
Contact them to report suspicious activity of a Mortgage Broker

National Association of Realtors
http://www.realtor.org/
430 North Michigan Avenue,
Chicago, IL. 60611-4087
and
500 New Jersey Avenue, NW,
Washington, DC 20001-2020
Phone: (800) 874-6500
Contact them to report suspicious activity of a Realtor.

U.S. Dept. of Housing and Urban Development (HUD)
http://www.hud.gov/consumer/index.cfm
http://www.hud.gov/complaints/landsales.cfm
Office of Consumer and Regulatory Affairs
Director, Interstate land Sales/RESPA Division
451 7th Street S.W.
Washington, DC 20410
Phone: (202) 708-4560
National Hotline: (800) 347-3735

The National Fair Housing Alliance (NFHA)
http://nationalfairhousing.org/
E-mail: nfha@nationalfairhousing.org
1212 New York Avenue, NW Ste 525
Washington, DC 2005
Phone: (202) 898-1661
Fax: (202) 371-9744

The NFHA, a consortium consisting of over 120 private, non-profit fair housing organizations, and state/local civil rights groups, helps provide equal access to mortgage loans. The NFHA welcomes phone calls on “how to avoid predatory lenders.”

Their #1 rule is to keep in mind that “Two against one can be quite intimidating when someone is being pressured into signing a loan. Make sure you always have someone else with you who is knowledgeable about financing.”

Arbitration Resources

When using an arbitration service, one can also have an attorney represent them.
The major arbitration administrators that consumers utilize are:

National Arbitration Forum
http://www.arb-forum.com/
info@arb-forum.com
In North America: (800) 474-2371
Phone: (952) 516-6400
Fax: (952) 345-1160
Toll-free fax: (866) 743-4517

American Arbitration Association (ADR)
http://www.adr.org/
E-mail: websitemail@adr.org
The ADR also has regional offices in many states.
Corporate Headquarters
335 Madison Avenue, Floor 10
New York, New York 10017-4605
Phone: (212) 716-5800
Fax: (212) 716-5905
Customer Service: (800) 778-7879

Jams Endispute
http://www.jamsadr.com/
This company has offices and mediators throughout the United States.

Major Credit Bureaus

Equifax
www.equifax.com
For Fraud Alerts:
P.O. Box 740241
Atlanta, GA 30374-0241
Phone: (800) 525-6285

Experian
www.experian.com
For Fraud Alerts:
P.O. Box 9530
Allen TX 75013
Phone: (888) 397-3742

Trans Union
www.transunion.com
For Fraud Alerts:
Phone: 800-680-7289
Fraud Victim Assistance Division,
P.O. Box 6790,
Fullerton, CA 92634
TDD: (877) 553-7803

Other Organizations

ACORN – Association of Community Organizations for Reform Now
http://www.acorn.org
After reporting mortgage fraud, scams and predatory lending practices to the appropriate agencies, you can also notify ACORN about your situation. Your state ACORN contact can be located at: http://www.acorn.org/index.php?id=2593

Consumer Federation of America (CFA)
http://www.consumerfed.org/pdfs/complaint.pdf

Starting Friday, companies that provide loan modification services must be licensed or face a fine under a law that kicks in to further protect consumers from fraud when they refinance or renegotiate a loan.

Facing a rash of complaints from already cash-strapped consumers, lawmakers earlier this year made changes to the Florida Mortgage Brokerage and Lending Act, which regulates the industry, at a time when renegotiations, foreclosures and other loan modifications are at an all-time high.

“Our goal, along with the many other fine organizations who helped pass this legislation, is to ensure Floridians only pay for loan modification services that are a true benefit; not an unrealistic promise to solve their financial problems,” said Tom Cardwell, commissioner of the Office of Financial Regulation.

Florida now licenses mortgage brokers and mortgage lenders, but does not regulate individuals who renegotiate terms for new and existing mortgages.

The law says individuals and companies may not provide loan modification services without an active license. The new law further enhances the Foreclosure Rescue Fraud Prevention Act, which prohibits individuals and businesses from collecting up-front fees for loan modification services related to foreclosures.

Specifically, the law prohibits the payment of upfront fees for loan modifications. It also requires that brokers meet minimum standards to ensure financial stability. Brokers whose licenses have been previously revoked would be barred from renegotiating loans. Violators would face fines of up to $25,000 per incident.

The law comes in response to an upheaval in the real estate and mortgage lending industries prompted by a crash in the home market. Florida’s foreclosure rate in November was the second highest in the nation as one out of every 165 homes was in some stage of foreclosure proceedings.

The law was one of the Financial Services Commission’s priorities to protect Florida’s consumers, and as a result, Attorney General McCollum’s office has filed 17 civil lawsuits on behalf of Florida homeowners.

“An individual’s home is their greatest asset and the implementation of appropriate loan modification guidelines in our state’s lending laws is a step in the right direction,” said Valerie J. Saunders, President of Florida Association of Mortgage Brokers.

Lawmakers are expected to return to lending and consumer credit-related issues this spring. Rep. Matt Hudson, R-Naples, and Sen. Mike Bennett, R-Bradenton, have again filed bills to tighten regulations on debt settlement companies, which work with credit card companies and consumers who need to renegotiate their repayment plans. HB 311 and SB 938 have already been filed.

“With all the debt consolidation going on, it was alarming that many of these companies aren’t regulated,” Hudson said.

It’s hard not to become emotional when faced with the hardships that life throws at us these days.  When you have fallen on hard times due to a job loss or a mortgage issue, it’s very easy to feel depressed, helpless, and sorry for yourself.

But you must realize that there are many solutions available to avoid foreclosure and save your home!  I meet hundreds of unfortunate homeowners every month; and, 95% of them have made the same common mistakes when they are confronted with foreclosure.

I read this article last month from a real estate investor in Central Florida about the most common mistakes homemakers make confronting foreclosure.   I would like to share her article and the ten most common foreclosure mistakes homeowners make:

1. Paying For Foreclosure Prevention Services

Search the Internet for “foreclosure help” and you are bound to encounter countless foreclosure agencies that, for an upfront fee, will stop your foreclosure. Their fees will cost you thousands and many of these agencies just take your money and let your home fall into foreclosure. What these agencies do is contact your lender on your behalf and question for a lender workout. A lender workout is a relatively simple process that you can do yourself and save thousands in costly fees. If you are interested in learning more about doing a lender workout yourself, complete with letter templates, you should consider this lender workout foreclosure solution.

There are numerous foreclosure scams being run through direct mail and on the Internet. Before you sign any documents or send a check to anyone, you should look the company up through the Better Business Bureau, Yahoo, and Google for complaints. If you are questioned to sign a “Quit Claim Deed” or any other documents that transfers ownership of your home, you are most likely being scammed. Should the company or person question for a large upfront fee with no guarantee or contract agreement that outlines the details of his or her services that should also signal a red flag. Hang up the phone and walk away. You should always see everything in writing and have written guarantees from anyone claiming to stop a foreclosure for you.

2. Ignoring The Lender

Believe it or not your lender is your best friend during foreclosure. If you are facing foreclosure, the lender has every right to your home. After all you did grant them a mortgage on your home. The excellent news is that your lender does not want your home; it simply wants you to make payments on time so they can get their money back. You should maintain contact with your lender and clarify to them the reasons why you have missed payments. Your lender may consent to a forbearance agreement, loan modification, or a delayed repayment plot.

Your lender will want to work with you because if you do foreclosure it will cost the lender between $30,000 – $40,000, the lender is not in the business of owning real estate, and foreclosures on lenders’ books makes it harder for them to obtain low-interest capital for future loan portfolios. Do not stick your head in the sand by ignoring your lender, educate yourself on your options and then contact your lender.

3. Feeling Overwhelmed and Not Seeking a Solution

More often than not homeowners in foreclosure have pressing day-to-day life issues, and are simply too overwhelmed to adequately find solutions to their foreclosure. Many then succumb to fraudulent foreclosure agencies or unscrupulous real estate investors who cost them their home. If you have no equity, no savings, and are one or multiple payments behind on your mortgage they are simple ways you can stop foreclosure or relieve yourself of that hefty mortgage payment and find something more affordable. You do not necessarily have to sell your home or if you must vacate it, you don’t have to go through the distress of waiting for a buyer and you can still save your credit for a more affordable home buy in the future.

4. Not Taking Advantage of Government Programs and Resources

The Federal Housing Administration has designed a program just for homeowners who can no longer afford their mortgage because of an adjustable-rate mortgage reset, or homeowners who are in “interest-only” loans are may now have to start to make principal payments. You can learn more about the FHA Secure Refinancing program at http://www.fha.gov or search for FHA-approved lenders at http://locator.fha.gov. You may also seek the counsel of a HUD-approved counseling agency at 1-800-CALL-FHA.

5. Not Having A Home Equity Line of Credit (HELOC)

A foreclosure stands an excellent chance of being prevented or delayed if a HELOC was established before the homeowner ever missed a first payment. Unforeseen events such as job loss or medical problems will make it hard, if not impossible, to obtain access to low-interest lines of credit, so it is vital to have a HELOC ready for emergencies. A HELOC should not be used for frivolous expenses, but for real emergencies such as medical expenses or fees associated with getting yourself out of foreclosure. In the event that you lose your job, you can use the HELOC to pay for necessities until you are back on your feet and can repay the loan. Most HELOCs do not have a monthly fee if you do not access the line, so if you are in a position to set-up a HELOC you should do so as soon as possible.

6. Spending What Money You Have On Other Bills

Though it may seem simpler to pay your utility, credit card, and cell phone bills before you make payments towards your mortgage the reality couldn’t be further from this notion. After 3 or 4 missed payments the lender has the right to “accelerate” or “call” your home loan and insist on getting all back payments at once. If you plot to keep your home you should cut all of you unnecessary expenses such as cable and cell phones so that you can devote what small money you have to pay for your house. There are many methods to prevent foreclosure, and will you need to have cash available to cover expenses. Keep in mind that in order to get the mortgage company’s consent to a forbearance agreement or delayed repayment plot you need to prove to that you made every reasonable attempt to make mortgage payments.

7. Missing Bankruptcy Filing Deadlines

A Chapter 13 bankruptcy filing will stop foreclosure dead in its tracks. But, you should explore all other foreclosure solutions and consider bankruptcy a last resort. If you choose that Chapter 13 is the right answer to your situation, then you should be sure to meet all filing deadlines and make all payments outlined under the plot or may end up losing your home.

8. Not Moving Quickly Enough

Time is of the essence when you are facing foreclosure. Once you start to miss payments the bank can accelerate or call the loan, and you will then have to come up with all of the back payments at once. Or, if you are in states such as Texas, it can be only a matter of three weeks before you are forced out of your home. You should be diligently seeking solutions for your foreclosure

9. Not Being Persistent

If you choose to do a lender workout you will have to place a considerable amount of effort into gathering your financial information, writing letters of hardship, finding the right numbers to dial, and having the patience to sit on hold for HOURS while you await your chance to speak with a representative from the mortgage company. This will be a very trying experience and there is no guarantee that the lender will consent to anything you may suggest. Before contacting your lender you should have everything you need in order, including the numbers to dial, to ease the stress of this entire process and you must be persistent with the representative you are assigned (if you even are assigned one).

10. Not Thinking Creatively

Many homeowners assume that if they cannot make payments on their home their only options are to foreclosure or file bankruptcy. And even still, many individuals are not even sure how to go about those options. Before you jump the gun and quickly go down the incorrect path be sure you have explore all avenues to get yourself out of your situation. Have you considered renting? Selling a fraction of your home for the amount in arrears? Have you spoken with a reputable real estate investor who may be willing to negotiate a deal so you may keep your house?

I posted this article last year in January 2009. Since I receive a ton of mail with the basic question, "How can I get a loan modification?"  I felt compelled to re-post it again at the beginning of 2010.

Consumer Advocate Ralph R. Roberts Reveals the Top Five Dos and Don'ts of Loan Modification

DETROIT--(activerain)2009--Ralph R. Roberts, consumer advocate and spokesperson for Federal Loan Modification Law Center, LLP, today revealed the top five do's and don'ts of loan modification. Since losing one of his own homes to foreclosure in the late 1970s, Roberts has made it his life's mission to prevent unnecessary home foreclosures. The following do's and don'ts are intended to dispel common myths about loan modifications, which typically manifest in the form of a rate reduction/adjustment to an existing mortgage.

#1. DO TELL YOUR SPOUSE OR SIGNIFICANT OTHER: It's tempting to hide bad news from your partner, but this can actually work against you. For example, in most cases, you cannot legally negotiate a loan modification without your spouse. You and your partner are in this together and are stronger as a team. Regardless of the reason, disclose it to your partner, put it behind you, and work together to resolve the crisis.

#2. DON'T ASSUME IT'S TOO LATE TO ACT: As long as you are still residing in your home, you have opportunities to keep your home.

#3. DO REALIZE THAT YOUR LENDER WANTS TO RESOLVE THE ISSUE. The only way the lender makes money is if their loans perform-modifying a loan through loan modification makes it perform for the lender. Banks and other lending institutions make more money and lose less money if you can make your payments. When they foreclose, they not only lose your monthly payments, they also have the expense of foreclosing (attorney fees), rehabbing the home, and then selling it (agent commissions).

#4. DON'T GO INTO HIDING: As hard as it is, failing to pick up the phone, return phone calls, or respond to notices is one of the worst things you can do. Your lender needs to know from you or your legal representative that you are aware of the delinquent payments and are working on a solution.

#5. DO SEEK PROFESSIONAL REPRESENTATION: You may be able to negotiate a loan modification yourself by working directly with your lender, but an experienced attorney or loan modification expert can properly represent your case to your lender that your loan is modified to a level of affordability. Homeowners who represent themselves often overestimate what they can afford to pay and end up in the same situation months after they receive their modification.

Ralph R. Roberts, CRS, GRI

Loan Modification Expert/Author

Sterling Town Center Office

12900 Hall Road, Suite 300

Sterling Heights, Michigan

48313-1150

Office: (586) 751-0000

Fax: (586) 620-6449

Ralph Roberts is the author of many books:

- Flipping Houses For Dummies (Wiley Publishing)

- Foreclosure Self-Defense For Dummies (Wiley Publishing)

- Advanced Selling For Dummies (Wiley Publishing)

- Protect Yourself from Real Estate & Mortgage Fraud (Kaplan Publishing)

- Mortgage Myths: 77 Secrets to Save on Home Financing (Wiley Publishing)

- Foreclosure Investing For Dummies (Wiley Publishing)

Ralph also maintains Websites and Blogs:

- www.RalphRoberts.com  (Ralph's real estate company)

- www.FlippingFrenzy.com  (Ralph's blog about Real Estate & Mortgage Fraud)

- www.AboutRalph.com  (Where anyone can learn more about Ralph)

- www.keepmyhouse.com/  (All about loan modifications)

- www.GetFlipping.com  (A resource for house flippers)

- www.bignail.com   (A public service from RRR to the Detroit Metro Community)

- www.KolleenRoberts.com   (A tribute site to Ralph's daughter)

Remember every job is a self-portrait of the person who did it. Autograph your work with excellence.  --Anonymous

The Securities and Exchange Commission's inspector general on Wednesday released a scathing report finding that the agency failed to follow up on detailed complaints and missed exposing the biggest fraud in the history of the agency, a $50 billion Ponzi scheme perpetrated by Bernard Madoff.

"Despite numerous credible and detailed complaints, the SEC never properly examined or investigated Madoff's trading and never took the necessary, but basic, steps to determine if Madoff was operating a Ponzi scheme," the SEC Inspector General David Kotz said in the report.

Kotz found evidence of a failure to follow up on three examinations and six complaints in a "competent" way.

Specifically, the report explained that the majority of a 2005 investigation was performed by a staff attorney who had recently graduated from law school and only joined the SEC 19 months before she was assigned the Madoff investigation. The attorney had never before been the lead staff attorney on any investigation, the report said.

The report describes an SEC culture where different agency offices failed to communicate effectively and, in one case, a discovery by staffers of Madoff "lies and misrepresentations" were ignored.

The inspector general's report sharply criticized the SEC investigators for general incompetence, saying that "a thorough and competent investigation or examination was never performed."

Madoff is serving a 150-year sentence imposed on June 29 after he pled guilty in March to federal charges based in part on the SEC investigation. He also has been stripped of all his personal property.

SEC Chairwoman Mary Schapiro said the findings in the report "reinforce" her view that changes the agency has undertaken since the Madoff scandal will help the agency better detect fraud.

She added that the agency has streamlined its enforcement procedures and put in more experienced staff members on the frontlines.

Madoff, who was arrested in December and charged with securities fraud, oversaw a fund that managed capital for high net-worth individuals, hedge funds, banks and other institutions. Many high-profile figures, including economist Henry Kaufman and actor Kevin Bacon, are reported to have lost money in the Ponzi scheme.

Kotz was instructed by SEC Chairman Christopher Cox on Dec. 16 to investigate how the SEC's compliance, inspections and examinations division handled criticism of the fund that it has received over the years.

According to the report, the SEC found that SEC Assistant Director Eric Swanson's romantic relationship with Madoff's niece, Shana Madoff, did not influence the conduct of the agency's examination of Madoff and his firm. (Swanson has since left the SEC, and he and Shana Madoff are now married.)

"The Office of the inspector general did not find evidence that any SEC personnel who worked on an SEC examination or investigation of Bernard Madoff Investment Securities had any financial or other inappropriate connection with Bernard Madoff or the Madoff family that influenced the conduct of their examination or investigatory work," the report said.

However, the first complaint against Madoff was brought to the agency in 1992. It related to allegations that an unregistered investment company was offering "100%" safe investments with high and extremely consistent rates of return over significant periods of time, according to the report.

That fatal slide occurred in the first half of the decade at American Business Financial Services Inc., a subprime-mortgage lender in Philadelphia that went bust in 2005 with losses of $700 million for thousands of mostly elderly mom-and-pop investors.

“If forced to choose one phrase to describe the U.S. economy in the 21st century's first decade, ‘Ponzi scheme’ would not be bad,” posed professor Frankel.

The bubble in real estate values that defined the period was not a Ponzi scheme in the traditional sense, but it still depended on taking money from one party to pay another.

As long as house prices rose, borrowers could refinance their mortgages, paying off the old lender with money from a new one. When the new money dried up, the entire country crashed and nearly brought the world economy down with it.

It happened with Philadelphia's own Ponzi schemers: Joseph S. Forte on the Main Line, Ron Schnable in the Mennonite stronghold of Souderton, and allegedly with Tony Young in Chester County horse country, and maybe with Troy Wragg of Manayunk, who has denied civil charges.

Solid data on Ponzi schemes, which are not legally defined, are hard to get, experts said. A spokesman for the Securities and Exchange Commission (SEC) said the agency filed charges in 70 of the schemes in 2007 and 2008. In 2009, there were 55 as of Dec. 4.

Counting Ponzi artists may be hard, but once they are exposed, it is easy to see they have a lot in common.

They tend to be entrepreneurial hustlers, and they gain credibility by winning over a pillar of the community or by exploiting a connection to a group. Like gambling addicts, they are always looking for one last chance, Frankel said. Forte, for example, told his probation officer that the only way he could reimburse his victims was to have another shot at investing.

Some Ponzi artists are crooks from the start, said criminologist Adam Graycar, who recently left Rutgers University in Newark. Others start with good intentions, he said, but resort to what are supposed to be stopgap measures, and then go too far to turn back.

Among the victims are the greedy and the trusting. "When you've got the greed and the crook together, then you've got dynamite," Graycar said.

 Ron Schnable: Predator

Ron Schnable remained relatively obscure while operating a series of schemes from 1995 to 2003 that took advantage of middle-class Montgomery County Mennonites and others around Souderton.

When Schnable appeared for sentencing last January in federal court in Philadelphia, wearing a green prison jumpsuit, his face covered by a bushy beard and his scraggly hair pushed across his balding head, it was hard to imagine him as a man able to persuade his victims to mortgage their homes and give him that money.

 Joseph S. Forte: Classic scheme

Joseph S. Forte, finding his victims on the Main Line, operated in a much different milieu than Schnable, but the two shared a drive to establish themselves as businessmen.

Before starting an investment fund in 1995 that over 13 years defrauded 76 investors of $35 million, Forte owned a gym in Havertown and then a computer-sales business in Upper Darby.

In some ways, Forte, 53, was a textbook Ponzi schemer. He got his start by winning over leaders of the community, including a Main Line accountant he became friendly with at meetings of the Haverford Township Rotary Club.

Tony Young: High-living

The approach of Chester County's Tony Young, who has been accused by the SEC of a $23 million investment fraud, differed markedly from that of Forte.

Like Forte, Young, 38, gained access to investors through connections with well-respected members of a community. In the place of Forte's Main Line businessmen and Schnable's Montgomery County Mennonites, Young found wells of cash on Chester County horse farms. 

Troy Wragg: Odd math

It takes a strong salesman to pull off a Ponzi scheme.

Troy Wragg, who is fighting civil charges by the SEC that he operated a Ponzi scheme with a hook in green technology, has a compelling personal sales pitch down pat.

He spoke of a stable childhood in Allentown - just before mentioning that he had been homeless as a boy. Then Wragg talked of starting a cleaning business at the age of 17, specifying that it happened about four years after his bout with homelessness.

That math might not work out, but some of the 100 investors who gave $54 million to Wragg and his Mantria Corp. of Bala Cynwyd since 2007 remain convinced that the math behind guaranteed annual returns of at least 17 percent was sound.

Tom Petters, a Minnesota businessman, is planning to appeal his convictions in a Ponzi scheme that cost investors more than $3.5 billion.

Petters' defense team announced Thursday it planned to appeal his conviction on 20 counts of wire fraud, mail fraud, conspiracy and money laundering. Efforts to recover money to compensate victims will likely net only pennies on the dollar, and prosecutors have not ruled out new charges against others. The fight over his future and how to compensate victims of the fraud will likely drag on for years.

"This fight is far from over as far as Mr. Petters is concerned," attorney Jon Hopeman said Thursday. "We have not yet begun to fight."

A court-appointed receiver, former federal prosecutor Doug Kelley, is leading the effort to seize assets from Petters and others accused in the scheme. They've recovered about $196 million so far.

Kelley's office said he was ill and unavailable Thursday. But he said before the trial he planned to file "clawback" lawsuits against some investors who profited because they got their money out before the scheme collapsed.

Petters has been jailed as a flight risk for close to 14 months and is expected to get a sentence of anywhere between 30 years to life in prison, but Hopeman said his spirits remain strong.

U.S. District Judge Richard Kyle didn't set a sentencing date after the jury returned its verdict Wednesday but said it likely would be in a "couple months."

Federal prosecutor Joe Dixon declined to say whether anyone else might be prosecuted in the fraud or predict how much victims might get. But he said the compensation probably wouldn't be much compared to what they lost.

Hedge funds suffered the biggest losses when the Petters empire collapsed. Their managers thought they were providing short-term loans to finance deals for merchandise, but the goods didn't exist. Instead, early investors were paid with later investors’ money.

But prosecutors also put two retirees on the stand who told the jury they'd lost their life savings. They included Ray Ross, who said he was taken in by Petters' reputation as a successful businessman. Ross said he thought he had $491,000 in a fund that lent money to Petters Co. Inc. All the money is gone, and Ross and his wife have only their Social Security to live on.

The Zimmerman Reed law firm is representing "several dozen" individual victims, including retired pastors and missionaries along with several faith-based nonprofits, attorney Brian Gudmundson said. The guilty verdict was welcome but doesn't change their situations, he said.

"Most of our clients are in very desperate straits financially because of this disaster," he said.

And they won't want to go public.

"There's still a great deal of embarrassment about being taken for their life savings," he said.