3 arrested in alleged Southern California foreclosure scam

The California attorney general’s office made another move in its crackdown on predatory lending and mortgage fraud schemes, saying it had arrested three people targeting Southern California homeowners facing foreclosure.

The group promised to renegotiate home loans but instead collected more than $700,000 in payments while the properties slipped into foreclosure, said Atty. Gen. Edmund G. Brown Jr.

The 39-count complaint includes charges of grand theft, money laundering and conspiracy charges.

Operating under the names First Gov and Foreclosure Prevention Services, the group mailed fliers to hundreds of homeowners offering to renegotiate mortgages, reduce monthly payments and transfer delinquent loan amounts to the renegotiated principle, according to the complaint dated Oct. 27.

They charged an up-front fee of $1,500 to $5,000 and told their victims to stop making mortgage payments and avoid communicating with lenders, according to Brown. Once victims started complaining that delinquency and foreclosure notices were still coming, First Gov would say that the loans had been renegotiated, according to the complaint. All that was required was a “good faith payment” to accounts with official-sounding names like “Reinstatement Department” or “Resolution Department.”

The companies could not immediately be reached for comment.

--Tiffany Hsu

Comments

[JB]

If you know of anyone who has been a victim or who has received sales pitches from any company like this, please encourage them to file a complaint with the BBB at www.la.bbb.org and the FTC at www.ftc.gov.

[cesar]

MY BANK HOMECOMINGS FINANCIAL MORTGAGE JUST FORECLOSURE MY HOME IN AN AUCTION YESTERDAY! I' M VERY DISSAPOINTED THEY DIDN'T HELP US OUT AFTER I PAID THEM $10,000.00 TO STOP FORECLOSURE THE FIRST TIME, THEY SAID THEY WOULD REVIEW MY ACCOUNT FOR A POSSIBLE MODIFICATION FOR A PERIOD OF 2 MOTNHS,. THEY DIDN'T AFTER I PAID, THE 10K THEY DENY ME RIGHT AWAY. THEY LIARS THEY CHEAT ON PEOPLE. THEN I HIRE SOME ATTORNEY, THEY SAID THEY NEGOTIATE, AND MY BANK WANTS ANOTHER $6000.00 TO STOP FORECLOSURE. I RUN OUT OF MONEY! SHAME ON THEM.
http://www.youtube.com/watch?v=PaX7o2k6Ifc

[TrojanDLA]

And that's why you hire an ATTORNEY because if he screws up, you have a better chance of collecting against him or have him disbarred, which is a lot more accountability than these fly by night snow jobs.

[RichW]

Let me get this straight...

You can't seem to find money for your house payment, but have no problem coughing up $10,000 to keep your house.

You decide not to pay the mortgage you agreed to, yet you call them "cheat" and "liar".

What an idiot....

[dclogang]

Only 3 were arrested?

I think anyone who bought, sold or had anything to do with any real estate transaction over the past 4 or 5 years should be beaten with a Cane and then sent to a prison and only allowed to see sunlight for an hour.

Yea, that's how mad I am..

Let the housing market in southern California tank.. and make it quick so we can start over again..

[Nelcisco]

Well said TrojanDLA, alot of mortgage brokers do not know a thing about loss mitigation and they're pretending they do. I'm not suggesting that these crook are mortgage brokers, but because the gravey train of making 25k a month doing loans is over & alot of brokers are in loan mods and not knowing exactly what it intails.

My advise to loan officers who's pipeline dried up because of the market and want to get into loan mods, understand 1st of all that it's not as simple as just offering a 30yr fixed and then at closing their getting a 2/28 interest only A.R.M
and getting away with it, the feds are REALLY cracking down and holding our feet to the fire. SO GO DO THE RIGHT THING or don't do it at all!!!

[Bob Williams]

First thing a Mortgage is a contract, written by lawyers.
All home owners need to be warned the non profits are over whelmed. Most Real Estate brokers do not have the expertice and non atterneys are not qualified. Work outs with out a lawyer on your own is not a good idea, the lender has a legal team that works on their side.

A qualified Law firm or Legal service center with a Lawyer is you best bet. They carry a CA State bar number and E & O insurance for mistakes . Any up front fees are a legal retainer. If you don't know what your rights are you don't have any rights.

[MyLessThanPrimeBeef]

I don't understand it.

We voted for a president whom we later found out we didn't approve of abover 20%. But did we get a chance to 'modify' the terms and conditions of his employment contract?

No, we had to wait out the previously agreed upon period.

So, if we didn't do it for the presidency, why should we do it for Joe Underwater?

[Chris Schreiber]

It's sick, companies like this established to do nothing but prey on the misfortunes of others and it does not matter how people ended up there.

At the same time it gives alot of honorable, ethical companies a bad name. There definately are mortgage brokers and credit counselors that can help and know what they are doing, but they are probably few and far between!