This is a revised 3 part series I posted on AR back in '09. I noticed a whold series of AR posts featured on AR this morning and thought I offer them to this very important forum. With as many a 5.5 milion homeowners still in some form of default Nationwide I think it a very timely topic to revisit.
New Industry Models? In today’s deplorable economic climate with literally thousands if not tens of thousands of folks losing their homes and hope of ever owning another home diminish by the day, is it any wonder why American home owners succumb to the antics of unscrupulous loan modification companies and attorneys? The question for real estate licensees is, do we join the growing number of companies offering "loan modification" services?
New Business Opportunity? I came very close to jumping into this hot bed in ’08. But thank God I had the presence of mind to do some very arduous research before I became personally involved. No, I was not in trouble with the loan on my home. But I was extremely concerned about all the folks that were and my Manufactured Home business was off appreciably from the economic downturn so I figured why not do something productive and rewarding for me while trying to help some of those folks that were in trouble.
Recognizing Risks When I See It. I immediately sought the opinion and advice of a friend of mine who just happened to be a Real Estate Broker and practicing Real Estate Attorney specializing in short sales, foreclosures, bankruptcies and loan modifications. He actually offered an extensive training program for licensed RE brokers, agents and lenders specializing specifically in the budding and booming loan modification industry.
The course involved 4 rigorous weeks of 4 to 6 hour sessions learning the lexicon, protocol and myriad nuances relating to this area of specialization. When the course was completed, I received a certificate of completion signed by this attorney stating that I had completed this course and was now able to jump into the arena as a certified loan modification representative. I felt I was ready to embark on an opportunity that would help many suffering homeowners while putting some doe, rey me in my jeans as well.
A 20 hour class does not a LOAN MODIFICATION EXPERT make. Well, even with all this training (16-20 hours ha ha what a joke) and all the hands-on experience I’ve had with 30+ years as a builder, developer, general contractor, Realtor, buyer, seller, land owner and property manager I was still squeamish about throwing my hat into the ring. Something just didn’t feel right about this whole thing. So, being the stickler for detail that I am, I probed a little further and here’s what I discovered.
About the time I was ready to jump into the pearly brine I realized that the words “Loan Modification” ("LM") were about as common as a cube of butter on a dinner table. Everyone knew someone who needed a LM. I even ran across a group of scammers who were actually going to attempt an Multi-Level Marketing (MLM) or “Network Marketing” pyramid scam. This whole thing was spreading like a win-fanned fire and was getting totally out of control.
Then I heard the war drums beating in the distance what with the Attorneys General throughout the country intervening and the Attorney General of the United States threatening to invoke stiff penalties and jail time to those engaged in fraudulent LM activity. Needless to say, this made me even more apprehensive.
Rats jumping a sinking ship? Where did it all end up?
It drove a number of LM scammers into hiding. Hiding where? Hiding behind the skirts of licensed attorneys. These scammers are shrewd. That’s why they get away with ripping people off so effectively. They know how to get around all the loop holes and overcome challenges and obstacles of the law like no others.
New Business Models? So the new deal now is for the scam artists to team up with licensed attorneys. They’re the so called marketing arms that front load these attorneys with leads by implementing and promoting direct mail and telephone boiler room campaigns; The front man so to speak. These boiler rooms, staffed with any smooth talking suede shoe artist they can scrape up licensed or not, qualify the prospect by asking them a lot of very privileged and personal questions about their situation. These questions by the way are very confidential and should only be asked by an attorney behind closed doors in complete privacy.
Danger to the consumer/homeowner. These boiler rooms are not law firms and in most cases are not even located anywhere near the attorney’s office. They are independently run and owned businesses with no legal or ownership alliance with attorneys whatsoever. Now here’s where it really gets sticky and messy. These boiler rooms do not fall under the“attorney/client privilege” umbrella”. You are not talking to an attorney. You are barfing your heart and soul and a great deal of your personal, private and very confidential guts out all over a salesperson with no attorney/client confidentiality or legal experience whatsoever. Anything you say to these salesmen can and will be discovered by counsel should the need ever arise. Your life is an open book. That’s nuts!
Telemarketing "Boiler Rooms" on the rise. Here’s what Jerry Brown, then Attorney General and now Governer, for the State of California says about “telemarketing-boiler rooms”:
“Responding to a just-released report that exposes the inner workings of a loan modification boiler room, California Attorney General Brown warned homeowners to avoid “shadowy and unscrupulous” loan modification consultants who use aggressive telemarketing tactics and charge thousands of dollars in upfront fees for foreclosure relief.
The report, written by a court-appointed receiver, found that H.E. Servicing, Inc., a loan modification company that Brown sued last week, ran a “well-appointed telephone boiler room” focused on making money, rather than helping homeowners stay in their homes.” "Never give more than basic contact information and very scant personal information at most to anybody over the phone. If you are not in an attorney’s office in an eyeball-to-eyeball personal and private interview don’t say a word."
Bottom line? If you're in MORTGAGE trouble speak with an experienced RE Attorney or a SHORT SALE SPECIALIST . The best way to hire an attorney is to go to the bar and get a direct referral from them and be sure to get a licensed Real Estate Attorney who has years of experience and a proven track record (ask for references) working with short sales, foreclosures, bankruptcies and now even loan modifications. Don’t hire an attorney who just happens to be a friend or one who has just graduated from law school and who’s hungry to make a buck. Take your time and do your homework. If not it’s tantamount to asking your dentist to do a heart transplant. Work with a professional who specializes in Loan Modifications.
NEXT: Chapter 2. Resources For Home Owners In Need of Loan Modification Advice.