Why do people want to stop foreclosures at ANY cost?
From the Chicago Times article:
The firm advertised that it “guarantees in writing that we will find a solution to stop your foreclosure and save your home or your money back,” according to the complaint filed in civil court.
If the lenders don’t reduce the PRINCIPAL balances to the current value of the home, let them have the house!
Most loan modifications actually INCREASE the principal balance due to delinquent amounts and modification costs ADDED to the outstanding balance.
Why are people doing that?
I just can’t imagine that someone who can’t make the mortgage payment pays THOUSANDS of dollars for a modification UNLESS they are lied to. And it so happens that MANY people are lied to. From the Chicago Tribune article below:
The flier advertised a federal program and said Balderas had been “selected” and “pre-qualified” to receive help with overdue payments. It had the name of Chicago attorney Dan Papajcik at the bottom, but the phone number routed Balderas to a company in Florida.
The FTC and state AGs KNOW about this false advertising.
You can’t miss the OBVIOUSLY false ads on the web, radio and TV.
I’ve watched one website advertising a completely made up “Credit Relief Act” for MONTHS now. They “prequalify” unsuspecting consumers for a program that don’t exist. EVERYBODY qualifies as long as they have over $10,000 in unsecured debt, but of course most people don’t know that.
They don’t offer any services, but sell the LEADS to debt settlement companies. Often they provide the phone number of the purchasing company with the qualification code, but they never disclose that the sell the info. They can get $50 to $100 or even more or EACH “pre-qualified” lead.
The regulators do absolutely NOTHING about this fraud.
When consumers complain about the false advertising, the companies claim that it wasn’t THEIR advertising and that the consumer must be “confused.” And our regulators couldn’t care less.
I am still very upset that California AG Brown won’t do anything about fully documented fraud and despite many consumer complaints:
Occasionally regulators pick a company to make an example of (AFTER they defrauded many people), but NOBODY ever goes to JAIL!
Defrauding consumers is as American as apple pie – it’s THE way to make money and essentially APPROVED by the government.
Loan modifications are entirely free.
Since I was a mortgage broker, I know that it’s very helpful to have someone put all the paperwork together and to do the pre-qualification. But let’s face it, if you’re broke, why pay thousands of dollars for work worth a few hundred dollars?
Attorneys can charge upfront fees on loan modifications — but some keep the cash, don’t finish the job
Blanca Balderas, of Chicago, paid $2,000 to have a local attorney help her get a loan modification, but she said the work wasn’t done. The lawyer said he handled her case but she just wasn’t approved. The mortgage company who was working with the attorney to get clients is being sued by federal officials. (Terrence Antonio James, Chicago Tribune / September 7, 2010)
By Ellen Gabler, Tribune reporter 7:39 p.m. CDT, September 13, 2010
A loophole in state and federal laws has made it easy for some attorneys to take advantage of Illinois residents struggling to keep their homes.
Attorneys are among the few professionals who can legally charge upfront fees to help homeowners modify their mortgages. But instead of negotiating with a lender, some attorneys or the companies they work for just keep the cash and don’t complete the job. Homeowners are often unaware until it’s too late and their homes are in or near foreclosure.
A year and a half ago, Henry Vega paid $2,495 to Skokie attorney David Mierswa for a loan modification. But neither Mierswa nor a company he worked with did the job, according to the Illinois attorney general’s office.
“I still don’t have a loan modification,” said Vega, who is trying to modify the mortgage for his Berwyn home. Mierswa declined to comment.
Loan modification schemes have flourished throughout the country as the financial and mortgage crisis squeezed consumers. In 2006 Illinois passed legislation that banned charging upfront fees for loan modifications.
But the law doesn’t apply to attorneys. They were exempt because they hadn’t been linked to loan modification schemes and they routinely accept upfront fees to handle bankruptcy cases and foreclosures.
As a result, some mortgage rescue firms are circumventing the law by recruiting attorneys to collect upfront fees from consumers. Attorneys have also set up their own shops. They’re all capitalizing on the huge number of people looking for help as nearly one in 10 Illinois home mortgage loans were delinquent last month.
The article details how lawyers so often are EXEMPT from consumer protections laws.
Few people realize that lawyers are LICENSED to lie — not only to consumers, but also to the courts. I didn’t know that until I filed a Bar complaint against the lying Capital One attorneys.
A neighbor said just this afternoon:
How do you know a lawyer is lying?
His lips are moving!
While there are a few honest lawyers, I met only very few despite my extensive legal experiences.
I wish I had the time to put together a page with the rules and calculations for loan modifications. But I’m not a lawyer, I have to EARN a living and my day has only 24 hours. I’ll try.