Loan modification companies: Wolves in sheeps’ clothing

We knew the loan modification companies were bad.  But this New York Times article (“Subprime Brokers Back as Dubious Loan Fixers“) really lays it all out and shows you what’s been going on behind the scenes.

The gist of it is that the same people who ran the subprime mortgage loan businesses that got us into this big foreclosure crisis in Las Vegas and elsewhere have reincarnated themselves as “loan modification experts.”  And surprise, surprise, they’re running scams that make money off the people who can least afford it:  desperate homeowners facing foreclosure.

How do they do it?  They use high-pressure sales tactics on people who are under a lot of pressure.  They promise to take care of your mortgage if you just make an up-front payment to them of $3,000 or so.  Don’t have that much?  That’s fine, they’ll just take $1,000 now and figure out a payment schedule for the rest.

The problem, of course, is that they can’t actually help these people.  And even if they could, they don’t.  According to the article, the sales agents are getting 30% commission.  And once they’ve received payment, they have no incentive to continue helping.

The article focused on a loan modification company called FedMod.  And one former employee is quoted as saying, “I had people calling me crying, and we were telling them, ‘You can pay me or you can lose your house.’  People were giving me every dime they had, opening credit cards.  But I never saw one client come out of it with a successful loan modification.”

Let me take this opportunity to say:  Never make an up-front payment to a loan modification company or consultant.  And certainly don’t make decisions in the face of high-pressure sales tactics.  There are always other options.  They key is to start with a trustworthy source, such as an established law firm that’s been around for more than a couple years.

Help Stop Foreclosure Las Vegas
If you really want to avoid foreclosure, and you’re considering loan modification, we strongly encourage you to get in touch with Freedom Law Firm for a free loan modification consultation.  Thanks to the Nevada State Legislature, you now even have the option of foreclosure mediation to help stave off foreclosure and negotiate a loan modification for your Las Vegas home.

Working with an experienced and established bankruptcy attorney in Las Vegas will save you money, not to mention a lot of hassle, in the long run.  Good bankruptcy attorneys in Las Vegas will be able to explain to you all of your options.  And whether you need foreclosure, loan modification or Las Vegas bankruptcy help, a good bankruptcy attorney will never pressure you with a sales pitch.

Iit would be helpful to provide a list of some of the names of loan modification companies mentioned in the NY Times article to watch out for as some of the names of the people involved in running them.

Before getting started, though, it’s also worth mentioning that whatever they call themselves–loan modification company, loan modification consultants, loan modification firm–they’re all the same and you should be wary of them.

Without further ado, here is a list of some of the loan modification companies to beware of:

FedMod – the focus of the NY Times article, the company was formed by former subprime mortgage brokers, has laid off most of its workers and is under investigation by the FTC.  Key names associated with the company include Jack Soussana, Nabile Anz (aka Bill Anz), Jeffrey Broughton, Steven Oscherowitz, Boaz Minitzer.  Former sales agent mentioned is Paul Pejman.Debt Barter Inc. – Based in Irvine, CA (epicenter of the subprime mortgage business), Debt Barter was cited by the state in January for collecting upfront fees without a license.  Numerous complaints submitted to the Better Business Bureau.  Owned by Sean R. Roberts, former head of a subprime mortgage broker called Instafi.

USMAC – Formerly was Citywide Mortgage Company, selling subprime loans.  Numerous consumer complaints against it, though no cease and desist order yet.  President is Scott Gimbel.

eModifyMyLoan – Started by Chris Mozilo, who worked for subprime poster child Countrywide Financial for 16 years and is the nephew of Angelo R. Mozilo, the former CEO of Countrywide Financial.

Here are some more loan modification companies to specifically watch out for:

National Foreclosure Relief Inc. – The state of Idaho’s Finance Department has ordered National Foreclosure Relief Inc. to cease and desist from offering and selling loan modification services to Idaho residents.  Enough proof that Las Vegas residents should also steer clear of these guys.Your Credit Angel LLC – Also ordered to cease and desist by the Idaho Finance Department for conducting loan modification activities without being licensed as a credit counselor.

Apply 2 Save –  These guys have filed for Chapter 7 after being pursued by the state authorities in Idaho.  Their former president is Derek Reed Oberholtzer and their former vice president of sales is Steven Curtis Lux.  Names to watch out for if they pop up in connection with another loan modification  or mortgage company.

The following loan modification companies are being charged by the state of Michigan:

Save My Home USA
Payment Doctors

And the following have been sent letters by the state of Michigan (note that many of these companies operate across the country even though they’re located in a specific city):

AFS Loan Modification Corp, Redondo Beach, CA
Apply 2 Save, Inc./Apply2Save, Coeur D’Alene, ID
Elect Group LLC, Deerfield Beach, FL
Equity Recovery Services, Towsen, MD
Federal Home Savers, Comniack, NY
Financial Solution Center, Corona, CA
Fresh Start Home Modification, Woodbury Heights, NJ
Fresh Start Program/Fresh Start Mortgage Assistance, Fresh Start Mortgage Solutions,Mortgage Assistance Solutions, Clearwater, FL
Hope Now Modifications, LLC, Cherry Hill Twp., NJ
IMC Financial, Clearwater, FL
Kirkland Young LLC, Miami Beach, FL
National Home Loan Assistance Program, San Diego, CA
New Hope Loan Modification, Bellmawr, NJ
Oceanview Investments, Oceanview Investment Services Corp., Fort Lauderdale, FL
Peoples First Financial, San Diego, CA
Pope & Associates Mortgage, Ontario, CA, Galthersburg, MD

A long list no doubt.  But there are plenty more where these came from.

For a more complete list, check out a blog called Mortgage Fraud Blog that specifically follows this topic (and is a source for a number of the parties listed above).  If you do ever consider using a loan modification company (which we strongly urge you not to do), at least do yourself a big favor and go to Mortgage Fraud Blog to do a search for the company you’re using.

At the very least, you can call Freedom Law Firm attorneys if you have any concerns about a loan modification company.  And of course you can always contact us for a free loan modification consultation to discuss foreclosure, loan modification, foreclosure mediation and any other Las Vegas bankruptcy information you might need.

One of the most devious tricks that loan modification companies have come up with is to set themselves up as law firms.

They get a lawyer (or two or three) to be part of the company and use them as front men or women.  This gives them a veneer of legitimacy.

In reality, however, they are simply loan modification scams.  FedMod, the focus of the recent New York Times article on how subprime mortgage companies have re-made themselves into loan modification businesses, is a great example.  FedMod had over 700 employees, and only 9 of them were actually attorneys.  But there are lots of other companies out there that refer to themselves as a “Law Group” or a “Law Center” or simply have the attorney’s name followed by “Esq.”

Using an experienced bankruptcy attorney in Las Vegas is definitely the right way to proceed with a loan modification for Las Vegas homeowners.  However, how do you know whether an attorney is legitimate or whether they’re just a front for a loan modification company?

Here are a few red flags to look out for.  If you see any one of these red flags, that is enough to avoid them.

1.  All they do is loan modifications.
2.  They’re not licensed to practice law in Nevada
3.  They want an up-front fee.  Good bankruptcy attorneys in Las Vegas and anywhere else will not ask for an up-front fee.  After a free initial consultation where an actual lawyer answers all of your questions and explains all of your options to you, you may pay a retainer fee to be held in trust after signing a contract that outlines all of the services that the lawyer will provide.  The retainer fee and agreement should cover everything from start to finish, including a discussion of your options, explaining the legal strategy and executing the process.
4.  They do not tell you the name of the attorney who will handle your case or let you meet the attorney in person.
5.  They tell you to stop making payments to your mortgage company, that they’ll take care of everything and not to worry.  (You should definitely worry if they say this.)
6.  They’re being investigated by the Federal Trade Commission or some other federal or state government authority, or there are many complaints against them submitted to the Better Business Bureau.  (If you do a Google search for their name, you can usually find out this kind of information pretty quickly.)
7.  They don’t offer to help you take advantage of Nevada’s new foreclosure mediation program.
8.  They’re using any sort of pressure to try and get you to sign up with them, especially high-pressure sales tactics.  A legitimate attorney answers questions and explains everything in a way where you can make the decision after gaining a full understanding of your circumstances and your options.

In addition to these red flags, of course, also just use common sense.

For a free consultation or if you need any assistance from Las Vegas Bankruptcy Attorneys, or have questions about Las Vegas Chapter 7 Bankruptcy, or Las Vegas Chapter 13 Bankruptcy, or Las Vegas Debt Settlement, please call the offices of Freedom Law Firm at 702-903-1208 today.

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