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MORTGAGE FORECLOSURE RESCUE - THE BAD GUYS DON'T WEAR BLACK!

In last week's New York Times an article focuses on how Home Savers Consulting is accused of committing fraud and profited handsomely at the expense of the former homeowner. Worse, the former homeowner thought she still owned the home - she did not.

You can see the article at this link: http://www.nytimes.com/2009/03/08/nyregion/08scam.html?_r=1&ref=realestate

In many states, including Florida, mortgage rescue fraud laws have been enacted. More often than not the new laws do not do anything more than tie the hands of legitimate professionals trying to help distressed homeowners - while those intent on pure profiteering evade the law or flaunt it outright. The states' problem is that there is no money to enforce the new law. The distressed homeowner problem is that they are living in the Wild West when it comes to these firms - and the bad guys seldom wear black.

Another problem is mortgage modification firms that "say" they have an attorney review the file. They typically pay the attorney anywhere from $100 to $600 for this service - but the attorney actually gives no advice and does not legal service - they use the attorney to try to thwart the intent and sometimes the language of the mortgage rescue fraud laws, which often have a carve out provision for attorneys.

Hopefully the state legislatures will quickly address these issues and give the new laws some way to be enforced.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660

RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com. See our easy to find articles at Need Short Sale Information? - These Articles Probably Answer Your Question

Posted by Richard Zaretsky, Florida Real Estate Attorney on 03/10/2009 10:22 AM

Comments (8)

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8 Comments on MORTGAGE FORECLOSURE RESCUE - THE BAD GUYS DON'T WEAR BLACK!

MAR

Everything must be worded correctly and spelled out to utmost understanding. There are many ways to assist distressed property owners without breaking the law.

Richard, if not black, then what color? :-) I have to admit, bad guys often do things seeming much better than good guys. They are more aggressive.

Thanks Richard, great post. Even some legitimate firms are riding the so called loan-modification bandwagon and making money off of people that can least afford it.

We need to let the public know that "most" or at least "many" loan modifications don't work. I have no stats on this but frm what I have experienced and people I have talked to this seems to be the case.

Servicing companies have been making "token" mods to let the government know they are working on behalf of the people. Not so. They are working on behalf of themselves.

Major media as well as the major banks that own the majority of the servicing companies are hyping this allowing the proliferation of loan modification companies. This industry is profiting but helping very few.

The banks don't want to modify. In fact, I believe they want to foreclosure. Reason being, they are taking posession of properties "illegally". They go to the courthouse steps and purchase the property on a credit sale basis. A credit sale is where the OWNER of a mortgage note that has just foreclosed brings no money to the auction. If it were the rightful owner then the court would only have to cut them a check back.

But what no one is telling anyone is that the foreclosuring entity in most foreclosures have no standing, they are not the true owners of the note and do not have a whole interest in the note. Therefore they have no right to bid on the property and use the credit sale option. They NEED to bring cash just as you and I would.

The investors around the world - the true owners of the notes - are being defrauded out of not only their investment but their collateral as well.

Banks are taking properties on which the notes they originally gave were paid in full to them. Now they are taking the properties as REOs, selling them and pocketing all the money.

More fraud from our financial institutions with NO government oversight. Actually no judicial oversight as judges are allowing this to happen as are the Sherrif's that conduct the auction.

The circle of fraud continues.

Richard, This is a timely post. I received a call earlier today form a loan mod company looking to recruit agents to send them possible customers. If they are able to mod the loan they will pay me $2,000!!!

The funny part was that they were wanting to set up an interview to see if I met their requirements to work with them. I told her that I was actually interviewing loan mod companies to see if I wanted to give them my business that I would NOT be interviewed. I asked her to send me their package so I could have my attorneys(you) review it. The next thing I heard was CLICK!!

Do we have to be licensed to do loan mods in Florida?

Richard,

We have seen loan modification "guru's here as on AR. ALl they wanted , was us bringing them the clients, and they will then pay us. When I asked what they do, the guy said that he actually gives it to someone else.

It is the same shameless daisy chain, whihc we see in commercial real estate.

MAR

Great post - the vast majority of the anecdotal 'evidence' is that most of these loan modification firms are way to part people from their money and they are preying on people who can least afford it. Do some of them do good work? Probably, but unfortunately it seems the exception rather than the rule.

MAR

What can we do to help catch these bad guys so they can be brought to justice?

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