SUN EDITORIAL:

Mortgage scams

Homeowners looking for help should beware offers are too good to be true

Sunday, Nov. 29, 2009 | 2:06 a.m.

Federal Trade Commission Chairman Jon Leibowitz was in Las Vegas last week to announce a crackdown on companies scamming homeowners. These companies charge hefty upfront fees with the promise to rescue homeowners from foreclosure — but they fail to deliver.

The FTC is working with the Justice Department and state agencies, including the Nevada attorney general. The group has moved against 118 companies and individuals in 23 states that have been preying on homeowners facing foreclosure.

In a meeting with the Las Vegas Sun’s editorial board last week, Leibowitz said he came to Nevada to make the announcement because “it’s a rich environment for scammers.” The state’s rate of foreclosure — one in 23 — is the nation’s highest.

As Richard A. Serrano reported in Thursday’s Las Vegas Sun, an FBI task force has been pursuing criminal mortgage fraud cases in a complementary effort. The FTC has authority to go after companies only in civil court, but it can move quickly to shut a company down and seek restitution.

It is good that federal and state agencies are working together, but there is more work than they can handle. There are too many scammers.

Given that none of the law enforcement agencies says it has enough resources to combat mortgage fraud, Leibowitz says there needs to be more public awareness of the threat.

Leibowitz said the companies his agency targets are typically run through the Internet and often advertise incredible claims — perfect records of modifying home loans and surefire strategies to beat foreclosure. The FTC says warning signs of fraud include high upfront fees and demands that homeowners make their mortgage payments to the company, not lenders.

Congress should provide more resources to the federal agencies combating mortgage fraud. However, people should be careful about companies offering foreclosure relief. The adage is true: If sounds too good to be true, it probably is.

Discussion: 4 comments so far…

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By KillerB

Nov. 29, 2009

1:03 p.m.

Suggest removal

I just can't take any of these poseurs seriously until they announce they're going after the REAL foreclosure scammers -- the institutions. A local federal judge and the supreme courts of two states, among others, have already kicked MERS (Mortgage Electronic Registration Systems, Inc.) out of its claim to be party to deeds of trust and foreclosures. Deutschebank's national trusts are big players, too -- an Ohio federal judge took them apart, one mortgagor in that case found they had traded her note 660 times in less than a year. In just the last two months two New York judges, one federal and one state, expunged/voided entire mortgages because the foreclosers failed to prove they had any legal right to the properties.

Many loan mods are a farce -- if the entity you're begging to allow modify can't first prove it's the note holder it's committing fraud to even be a participant in that process. And many, many attorneys -- sworn officers of the courts -- are willing players in this particular part of the scams.

On and on, People. The silver bullet is NRS 104.3501 -- a private right few bother to exercise, and this state's attorneys fail to use. It changes the rules of the game in the homeowners' favor using centuries-old laws of negotiable instruments.

School's out for now, children.
By rwal2222

Nov. 29, 2009

3:37 p.m.

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I totally agree! The people who need to be investigated are the phony mortgage companies, and big investment firms like Goldman Sachs. These are the rip-off artists that are at the bottom of this mess, and we need to DEMAND that our legislators and judges pursue these thieves before more people lose their homes!
Write to your local leaders, and demand justice!
By dwfora

Dec. 2, 2009

4:20 p.m.

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I'm glad to hear that there are more and more people out there being busted for ripping off those of us who are just trying to keep our homes by abiding by the rules. I hope to hear more stories about companies and individuals being busted for their actions.

I also think that this article was pretty helpful in breaking down how to avoid being ripped off by mortgage companies.

http://www.bankapedia.com/mortgage-encyc...