Once
again California Attorney General Jerry Brown rides to the rescue of
homeowners by issuing a timely warning. This is what we need MORE of - but we'll be
lucky if this info makes the papers at all.
This
is a pretty sophisticated scam involving forged letterhead and people
who apparently know the lingo, even got a business license from the
City of LA. I swear if these people put the same degree of diligence
toward a legitimate career, they would probably prosper as well. This
is no fast street scuffle but was set-up to extract repeated payments
from the victims.
Anyway,
fore-warned is fore-armed, or some such. I've added a little color to
highlight key points.
By
the way, this is a copyrighted
Press Release from the AG. They are only too happy to have
the message go into wider distribution - it leads to (hopefully) fewer
prosecutions in the future and fewer victims if we can get the word out
ahead of the curve.
Brown Warns Homeowners that Scam Artists
are Using Forged Letterhead of Lenders to Con Californians
LOS ANGELES- California Attorney General Edmund G. Brown Jr.
today
warned that scam artists have "sunk to a new low" and have used the
forged letterhead of major lenders to con worried Californians
into
paying thousands of dollars for non-existent loan modification
services.
"Scam artists have sunk to a new low and are using the forged
letterhead of lenders to con worried Californians into handing over
their hard-earned money," Attorney General Brown said. "Californians
should be deeply skeptical of anyone who demands money up front and
makes extravagant promises that they can save their home."
Attorney General Brown also advised consumers about seven steps
they can take to protect themselves from loan modification fraud. (See
below).
Today's warning comes on the heels of the arrest Wednesday of Anna
Santos, 22, of North Hills - a key player in a loan modification scam
using forged letterhead - on charges of money-laundering, conspiracy,
and four-counts of grand theft.
Ms. Santos joined with members of the defunct First Gov loan
modification ring in a separate criminal enterprise with a disturbing
twist. They used forged mail and envelopes that appeared to be from
victims' lenders.
Ms. Santos obtained a fictitious
business permit through the City
of Los Angeles for "Payment Processing Department." She
opened several
bank accounts and two post office boxes under that name. She and other
members of the ring mailed flyers that appeared to be from victims'
lenders or a government entity. The flyer used a large, bold header
that read "Final Notice" and
advised homeowners that they qualified for
a special program to save their home from foreclosure.
After providing their mortgage information, homeowners received
what appeared to be "confirmation" that the lender had been notified
about the loan modification. Many victims also received loan
modification documents that appeared to be from the victim's lender.
The documents were of course forgeries.
The victims were informed they had been placed in a "probationary"
program and their mortgage
payments should be submitted to "Payment
Processing Department" and sent to a given post office box
address.
None of the payments were credited to the victims' home loans.
Payments sent to the post office box were retrieved by Ms. Santos
and deposited into the bank accounts she had opened. The money was then
transferred to bank accounts held by other members of the ring.
Many victims paid over $6,000 to this loan modification scam.
Here's what homeowners can do to avoid becoming a victim:
- DON'T pay money
to people who promise to work with your lender to
modify your loan. It is unlawful
for foreclosure consultants to collect
money before (1) they give you a written contract
describing the
services they promise to provide and (2) they actually perform all the
services described in the contract, such as negotiating new monthly
payments or a new mortgage loan. However, an advance fee may be charged
by an attorney, or by a real estate broker who has submitted the
advance fee agreement to the Department of Real Estate,
new window, for
review.
- DO call
your lender yourself. Your lender wants to hear from you,
and will likely be much more willing to work directly with you than
with a foreclosure consultant.
- DON'T
transfer titled or sell your house to the foreclosure
rescuer. Fraudulent foreclosure consultants often promise
that if the
homeowners transfer title, they may stay in the home as renters and buy
their home back later. The foreclosure consultants claim that transfer
is necessary so that someone with a better credit rating can obtain a
new loan to prevent foreclosure. BEWARE! This is a common scheme
so-called "rescuers" use to evict homeowners and steal all or most of
the home's equity.
- DON'T pay
money upfront to people who promise to work with your
lender to modify your loan. It is unlawful
for foreclosure consultants
to collect before 1) they give you a written contract
describing the
services they promise to proved and 2) they actually perform all the
services described in the contract, such as negotiating new monthly
payments or a new mortgage loan.
- DON'T pay
your mortgage payments to someone other than your
lender or loan servicer, even if he or she promises to
pass the payment
on. Fradulent foreclosure consultants often keep the money for
themselves.
- DON'T sign
any documents without reading them first. Many
homeowners think that they are signing documents for a new loan to pay
off the mortgage they are behind on. Later, they discover that they
actually transferred ownership to the "rescuer."
- DON'T
ignore letters from your lender. Consider contacting your
lender yourself, many lenders are willing to work with homeowners who
are behind on their payments.
- DO contact housing counselor
approved by the U.S. Department of
Housing and Urban Development (HUD), who may be able to
help you for
free. For a referral to a housing counselor near you, contact HUD at
1-800-569-4287 (TTY: 1-800-877-8339) or www.hud.gov.
IF
YOU TRANSFERRED YOUR PROPERTY OR PAID SOMEONE TO "RESCUE" YOU FROM
FORECLOSURE,
YOU MAY BE A VICTIM OF A CRIME.
Please file a complaint with the Attorney General's Office at the
following address: Office of the Attorney General - Public Inquiry
Unit, P.O. Box 944255, Sacramento, CA. 94244, or online at www.ag.ca.gov/consumers.
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