June 14th, 2011 at 7:50am
Two men have received prison sentences after they admitted they operated a national business that was little more than a loan modification scam.
Michael Trap has been sentenced to 30 months in federal prison. His business partner Glenn Steven Rosofsky received a sentence of 63 months.
Trap and Rosofsky set up a nationwide telemarketing operation under the names of “Nations Housing Modification Center” and “Federal Housing Modification Department”. Using the claims of having attorneys and forensic accountants (some con-artists call them “forensic loan auditors”) to find errors in the loans of borrowers in default, the two claimed a high success rate in obtaining loan modifications. They are thought to have made $900,000 from their scam.
There are two earlier postings on the California Real Estate Fraud Report about Michael Trap and Glenn Steven Rosofsky. Read about them here and here.
Read the original article in KGTV 10 News.
November 26th, 2010 at 10:14am
A mortgage rescue scam has cost a couple their dream home in Fresno.
Patty and Jody Farmer lived in their dream home in the Central Valley for approximately 11 years along with their grandchildren. When their adjustable rate mortgage was going to be reset in 2008, making the payments unaffordable for the mostly-retired couple, they turned to US Loan Auditors, Inc. which had sent a solicitation letter to them. US Loan Auditors, Inc., which according to the California State Attorney General’s Office, finds its clients through direct mailing, told the Farmers that they could conduct a “forensic loan audit” of their mortgage to find possible “mortgage violations” committed by the lender. This information would then be used to (somehow) convince the lender to offer the Farmers a loan modification. US Loan Auditors, Inc. told the Farmers to stop making their mortgage payments, which triggered a Notice of Default (NOD) from the lender. In the meantime, US Loan Auditors, Inc. charged the Farmers $1,000 a month for seven months and its representative told them the company attorney would take their case to court against the lender for the 10 violations it found.
The California State Attorney General’s Office has filed a $60 million lawsuit against US Loan Auditors, Inc. on October 6 according to the Fresno Bee, seeking restitution for all of its victims, including now, the Farmers, whose home was foreclosed. There is also a Better Business Bureau Report that gives them an F rating (their worst possible rating) but refers to them as US Loan Auditors LLC.
Read the full article in the Fresno Bee.
October 6th, 2010 at 8:14pm
Attorney General Edmund G. Brown Jr. has filed a $60 million lawsuit against two Sacramento-area companies that scammed homeowners by promising to get them loan modifications if they used the firms’ forensic loan audit services.
[Note: "forensic loan audit" is one of those terms that has wormed its way into the English language but is very little than a marketing phrase.]
The two companies are US Loan Auditors and My US Legal Services and are based in Rancho Cordova. They, along with five persons, including two who are (at least for now) attorneys, worked as a team to defraud desperate homeowners by charging upfront fees without delivering anything of measurable value. One of the scams perpetrated by forensic loan audit companies is that their “forensic software” claims to find violations of the law by lenders, which inexplicably translates into the homeowners not having to make their mortgage payments. Additional fees are then tacked on so supposedly sue the lenders for predatory practices.
The natural persons being sued the Attorney General Brown are the owners: attorney and real estate broker James Sandison, Jeffrey Pulvino, and Shane Barker and their California attorneys, Sharon L. Lapin and Jonathan G. Stein. In a separate action, the California State Bar filed disciplinary charges against James Sandison for “the alleged misappropriation of clients’ funds and aiding the unauthorized practice of law.:
Read the Press Release by the California Attorney General’s Office.
August 24th, 2010 at 6:06pm
The U.S. GAO (General Accounting Office) has just released a report on the newest forms of mortgage fraud. Requested by Rep. Doris Matsui of Sacramento, the new frauds are a variation of the foreclosure fraud schemes in which fraudsters demanded upfront fees and performed little or no work on behalf of the consumer. Attorney General Edmund G. Brown has been aggressively prosecuting licensed agents, attorneys and others who broke the law, with the result that some have been sentenced to prison and fined and some have lost their real estate licenses or the right to practice the law.
The GAO has identified the two new scams as:
(1) a “forensic” loan audit, in which the borrower pays an upfront fee to the “auditor” (someone who is usually NOT an auditor) to see if their were regulatory violations in the original mortgage. The auditor tells the borrower s/he can get the loan modified or even canceled.
(2) the “consultant” promises to get the borrower’s mortgage erased based on a far-fetched notion that the government will pick up the loan due to the lender having done something illegal during the loan origination process.
Read the full article in the Sacramento Business Journal.
February 22nd, 2010 at 11:56am
In a press release, California Attorney General Edmund G. Brown sent out an alert to distressed homeowners: do not be duped into paying for a forensic loan audits.
According to AG Brown, forensic loan audits are the latest ploy by foreclosure consultants, mortgage relief firms, foreclosure assistance firms, loan modification firms and the like to extract upfront fees from their victims without providing any actual foreclosure relief. These firms are forbidden by law from charging advance fees, must register with Brown’s office and post a $100,000 bond. In the past year the AG’s office has shut down at least 30 of these parasitic companies and has prosecuted numerous licensed (and unlicensed) real estate professionals and attorneys who have violated the law. And the Department of Real Estate (DRE) is actively carrying out investigations and issuing cease-and-desist orders to companies and individuals who cross the line, according to Real Estate Commissioner Jeff Davi.
Read the press release on the California Attorney General’s website.
