Homeowner Alert: They went from selling you a toxic home and loan and now they want to “rescue” you from foreclosure from those same homes and loans they sold you last year. Should you trust these so-called loan modification and short sale experts that are busting down your door to help you? Hopefully after you read this, you will not answer your door when these crooks come knocking to save you!
Take for example this email I received this morning from a struggling homeowner this morning:
Hi, I’m late in paying my mortgage 30 days due to lose of hours at work and may be losing up to $1,000-$1,200 in pay due to this. I saw a loan modification company and they said it would take $1,000 down to start the process and in 3-5 days to tell me if I could get my mortgage modification and dropped 900-1,200 a month. They said in the first 3-5 days that if I could not get a loan mod, it would only cost me $250 to look at my application is that good or bad? My loan amount is 370,000 and monthly payment w/taxes is 2,791.00 can anything be done? Thanks
My Response:
Yes, this is very bad. DO NOT TRUST THESE GUYS!!!!
This scam is really a $250 robbery and theft case to me and is probably being operated on the kitchen table by and ex- loan officer or Realtor. Those $250 checks a day quickly add up to $10,000 months and $100,000 years for selling what equates to loan modification snake oil.
Maybe these scammers put the fee at $250 because that is a misdemeanor and anything over $500 is a felony? Clever scammers these days!
I thought this scam was pretty clever since it really plays reverse psychology on the homeowner as if this company is truly looking out for their best interests. A homeowner thinks $250 is the most they’ll loose and at least they’ll know if they can get a modification. But in reality it is a $250 a pop scam and the advice is most likely not what the homeowner needs and may in fact lead that borrower into foreclosure.
Welcome to what I call “predatory loan modifications” and folks, business booming!
Back when I first started researching and blogging about loan modifications in early 2007’, there was not one mortgage or real estate professional that was offering loan modifications in the world (or at least that I could find on the internet). Most everyone and their mother were still trying to ride the highly lucrative subprime and housing bubble train where they made $10,000-$40,000 commissions on one loan or one home at a time.
Many of these so called professionals were million dollar a year commission hitters. Living in million dollar homes that they bought from selling and originating hundreds of homes and loans in their subprime glory days.
I know because I have been tracking and researching this trend over at websites where these so called professionals congregate like ActiveRain.com and BrokerOutpost.com. Many of them have blogs advertising their illegal companies like its the wild, wild west of loan modifications and short sales.
Now that the subprime snake oil is gone, it looks like the new oil of choice is loan modifications and its selling like hot cakes or at the very least, like subprime loans is 2005!
Hell, everyone is an expert now and they even have books to prove it, seminars to pawn their wares and small fees to teach you how they do it!
Over the past year, these agents and brokers slowly jumped on the home saving train and now I think there is not a broker in the country that is not offering loan modifications and or short sales. Their advertisements boast that they went from, “I sell a gazillion homes and loans” to “I save a gallion homes and I am your neighborhood loan modification and short sale expert!”
Please get me a bucket, BARF! Is there any truth in advertising and marketing in regards to the real estate and mortgage industry. Can someone please call the FTC, LIKE NOW?!
Literally, over night, the industry exploded with many of the same scammers who duped borrowers and placed homeowners in hopeless and predatory loans.
I spoke with California Attorney Mark N. Zanides who performs loan modifications in Santa Ana (Orange County) and he said this about these rogue loan modification companies:
“What most Californians don’t know is that section 2945 of the California Civil Code requires “foreclosure consultants”, that is, people who do loan modifications, to be registered with the Department of Real Estate before an advance fees can be accepted. Lawyers and people who work on modifications on the lender side are exempt.
Only 15 or so companies are registered in California.
Moreover, Section 2945 also states that even if registered, a loan mod company cannot accept advance fees after a Notice of Default has been served.
So most loan mod companies in California are operating illegally. To date, the DRE has shut down only two companies, and is investigating others. Simply put, you are not going to be protected by the government, so the consumer must protect himself.”
{ 9 comments… read them below or add one }
I called Guardian Advocate Group to modify my loan way back in June. I talked to a guy named Gregg Shwack and was convinced that this was a legitimate loan modification company. I also had small email communication with Mike Luchen (CEO), who also assured me that I was in good hands.
The web site http://www.guardianmods.com/ states that the processing team will keep you informed but this was really not the case. I had to call just to get a status and I would also shoot emails to Gregg and he would respond with few words like, “We are working on it”. That’s the status I got for the past 3 months.
About 3 weeks ago, Gregg Shwack directed me to call their processing department to get updates on my loan. The first time I called, the lady “Gail” told me that their computer systems were down and that she would have to get back to me the following Monday. Monday came and no call so I called and got an answering machine that says their moving and would re-open that wednesday in the evening. So, I waited to Wednesday evening and called but still got the answering machine. I tried calling for the rest of that week and got that same answering machine. At this point I was frustrated so I called Gregg Shwack again and left a message to have him call me back. I didn’t get a call so the next day I called and left another message that I called.
Now, every time I call, he is in a meeting. I’ve sent emails to Gregg Shwack, Mike Luchen and many others trying to get someone to contact me back so I can get a refund on the loan modification that never happened. I was promised by Gregg Shwack that all my money would be returned so I want it to be returned. The last email I got from Gregg Shwack was this: “Your.file is complete !!!!! 98 percent of all files from your lender has been REJECTED!!!!!!! IAM SAD TO SAY.THIS.MAYBE THE.CASE” Well, if that’s the case, I should get a refund as promised! Now he won’t talk to me or neither will no one in his company.
Sorry to give you the news, but you were most likely taken, Mike Luchen is in prison currently. Michael Yeninas changed his name to Mike Luchen in 2004 after a scam he pulled in 2001-2002. Just google Michael Yeninas and you can read the NY post and NY daily news articles were he was charged in a scam to the tune of 1.5 million from innocent elderly people.
In desperation I went to a Foreclosure prevention web-site. Within days I received several phone calls from companies offering their “help” to modify my home loan. I contacted one in Florida that stated they were attorney backed, they wanted $3,000.00. $1,500.00 up front but this was stated as being an attorney retainer fee. Now one month after posting my information I have been contacted by a company called Loan Workout Consultants in Tarzana CA that state they work with HUD and have a guarantee but a $2,900.00 fee must be paid in advance. After looking at the guarantee, it only states that they will get a response from the mortgage company in 3-6 monthts not that they guarantee a favorable outcome. Is this company legitimate ?
Is this legal in Massachusetts ?
In desperation I applied for foreclosure prevention help on line. Within days I received several phone calls from companies willing to help me with a loan modification on my mortgage. One in Florida wanted $3000.00, $1500.00 upfront as an attorney retainer. Now I have one in Tarzana CA claiming to work with HUD http://www.lwcllc.com They want $2900.00 upfront but state they have a guarantee. The guarantee is only that they get a response from my lender, not that it is favorable. Is this company legitimate ?
Are loan modifications legal in Massachusetts ?
Gregg Schwack is no longer working for the company. The old processing team has been fired, and there is a brand new staff on board. If you have any questions regarding a loan mod, or if you currently have one with the company, please contact our offices Monday thru Friday from 10am-6pm at (914) 777-3269
Thank you.
Guardian Adovacte Group
LENDQUEST SCAM? I’m not sure, but they definitely didn’t get me the loan modification as they promised (and what they gave me in writing). To make this somewhat short, LENDQUEST of Sherman Oaks, CA in association with the Law Offices of David Rosenberg is one of these” loan modification” companies. They want $1500 up front and $1500 after an agreement has been met with the bank. They do no work or negotiation what-so-ever. They promised one loan modification, stating they agreed with our bank, which was a lie. They had no backup or paperwork to support this offer from the bank. I called them out on it and then they claimed they re-negotiated a better deal, which was another lie. It was worse than the original deal. All they did was get the loan mod paperwork sent to us from our bank, which gave us a trial period, not the promised loan mod for 5+ years, the lower rate, or the maximum % rate cap. They also tried to process payment on my credit card multiple times without consent. The “lawyer” wasn’t involved at all in any of the negotiations.
MY RECOMMENDATION…DO NOT USE LENDQUEST!
LENDQEST SCAM…..If they don’t do what they promise and get you the loan modification they stated in writing but still take your money…..is that a scam?
Never give sharks money to do a loan modification.
Many crooks and shister bad law firms have fancy websites, ads on the radio and signs even on the corner —- They will not do anything but take your money.
negotitation center of america is a total scam. they tell you upfront that they can get your loan modified and if not they will refund your money. this is not true. they do nothing then when your house is gone they are gone too.