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Most of the mortgage news this morning is leading with State Attorneys Generals, Federal prosecutors, and the FTC coordinating to shutdown loan businesses preying on desperate homeowners.
Inman News: Officials in California shutdown Anaheim-based Loan Mod Boiler Room Operation.
The company employed a sales force of 31 at the time it was shut down, McNamara found, and less than half as many employees engaged in negotiating loan modifications with lenders or processing related documents.
Employees in sales were typically paid a $450 commission when a client paid the full $2,500 fee up front, regardless of the outcome of the case. By contrast, eight staff negotiators earned $500 a week plus $75 for every loan modification they were able to negotiate.
MortgageInsider: Orange County District Attorney raids three homes looking for alleged foreclosure rescue scam.
Attorney General Jerry Brown last week said he has filed suit against the men for allegedly charging homeowners $4,000 in upfront fees and then failing to get them cheaper payments on their home loans.
Brown also charged the companies sometimes promised to arrange a short sale — when a lender aggrees to accept less than debt owed on a property — but instead attempted to use customers’ personal information for their own benefit.
Washington Post: FTC announces “Operation Loan Lies”
The Federal Trade Commission recently announced that it is leading “Operation Loan Lies,” an effort by 25 federal and state agencies to shut down firms that are deceptively marketing foreclosure rescue and mortgage-modification services. These companies often do little or nothing to help homeowners renegotiate their mortgages or stop foreclosures, officials from the FTC and other agencies say.
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