Sharks and Pirates

by Doug Love

Anyone adrift in a sea of mortgage debt, beware the siren call of “foreclosure consultants” and “loan modification experts.” Some are pirates, luring you toward an island of safety and refuge, but it’s a trick. They are intent on crashing you on the rocks and plundering your ship.

If you are “underwater,” in your house, watch out for circling loan sharks. If they smell blood they will attack, and drag you down.

The sharks and pirates we’re talking about here are crooks and plunderers promising loan modifications and foreclosure relief for struggling homeowners. They take money as “fees” for “service” and leave people broke and homeless.

These no-goods are chumming email inboxes, hard mailboxes, and voicemail boxes with sweet-smelling offerings for people who are stressed with loan debt and foreclosure.

Example: Three California attorneys were busted on 19 felony counts of grand theft, conspiracy, and false advertising. These predators advertised loan modification services, claiming to possess “extra leverage” with banks. They described one of their services as a “mortgage violation audit,” in which they would review a victim’s loan documents and claim to find violations by the bank. They claimed to then have the leverage to force the bank to grant a loan modification. The attorneys took up-front fees for their “service,” never did a thing, and left people to sink further underwater.

Other victims were told to reject the loan modification offered by their bank. The attorneys-gone-bad claimed they could secure a better interest rate, a lower payment, and a principal reduction. In one case, a man was also told his second mortgage would be eliminated. Four months later, the man lost his home to foreclosure.

“Homeowners facing foreclosure are being targeted by predators, including those who use their law licenses to gain credibility and scam innocent Californians,” said California Attorney General Kamala D. Harris.

Harris is out to nail the scammers. “My office’s Mortgage Fraud Strike Force is dedicated full-time to cracking down on these deceptive practices,” she said.

Harris wants everybody to remember one thing: “Taking up-front fees for foreclosure consulting is illegal.”

Beware the sharks and pirates.