Sunday's issue brought Robert J. Shiller's Economic View column, How About a Stimulus for Financial Advice?, suggesting that the government subsidize personal financial counseling and that if it had done so years ago, the housing bubble would have been less severe. Along the way Shiller cites some recent papers on how many consumers are financially unsophisticated and how lenders take advantage of such consumers. Bob Tedeschi's Mortgages Column the same day, Loan Fraud Seen on the Rise, discussed a report by the Mortgage Asset Research Institute that says mortgage fraud has risen even while mortgage originations have fallen. An excerpt:
The report, released in early December, found that 36 percent of the fraudulent mortgage activity involved loan professionals’ misrepresenting borrowers’ incomes, while another 20 percent involved misrepresentations of borrowers’ employment.
* * *
Jennifer Butts, the Research Institute’s director of operations, said the survey results surprised her. Some industry executives had believed that the more unscrupulous mortgage brokers and loan officers had fled the industry or lost their jobs in the recent downturn, once lending standards tightened and loan volumes dropped.
“But we have people in the industry who didn’t get weeded out,” Ms. Butts said. “And now they have fewer transactions on which to make a profit, so they’re just a little more desperate.”
Last Thursday, January 15, the Times published Swindlers Find Growing Market in Foreclosures, about foreclosure rescue schemes. An excerpt:
Carol McClelland, 46, fell into foreclosure on her Chicago home when she lost her job as a waitress in two restaurants. She received a call from a company called Foreclosure Solutions Experts, promising to stop the foreclosure and lower her mortgage payments to around $550 a month, from $1,056, Miss McClelland said.
“She showed me other clients’ files, and they were paying $650 a month,” she said. The charge for the service was $1,300, which Miss McClelland paid in installments, borrowing the money from friends and relatives.
When the loan servicer notified her that the house was still in foreclosure, Miss McClelland said, the representative from Foreclosure Solutions Experts told her that the matter had been taken care of.
“She told me everything was all settled; I don’t have to worry about anything,” Miss McClelland said. “All I had to worry about was getting the rest of the money to her.”
According to a suit brought by the Illinois attorney general in November, Foreclosure Solutions Experts does little or nothing to help consumers, and when it does take action, the result is often a repayment plan unsuited to the borrower’s ability to pay. The suit alleges that the company never contacted Miss McClelland’s lender, HSBC.
On January 11, The Times ran a column by Andrew Martin, Inspecting Our Food: How Many Cooks?, arguing that it doesn't make sense to divide responsibility for food inspections between the Department of Agriculture and the FDA and discussing other problems in the food inspection system. Here is a report from January 9 about Citibank's willingness to support the stripdown amendment to the bankruptcy law.
California Assembly Bill No. 180 Will Make it Impossible for Loan Modification Scams Like Parsa Law Group to Stay Open for Business
By: Bad Biz Finder: http://badbizfinder.wordpress.com
James Parsa is delusional. We genuinely believe that HE believes that Parsa Law Group is a group of real estate attorneys performing loan modifications within the law. His blogs scare us; have you read them?
If Parsa Law Group and National Loan Modification Center are still in business on July 1, 2009 when this bill takes action, there is something very wrong with this state’s Attorney General’s Office and Department of Real Estate.
And for you other law firms that haven’t as yet been called out by Bad Biz Finder, AB 180 will make it even more difficult for you as well. Its primary goal is to implement even tighter controls over foreclosure consultants.
For example, the new law will extend the homeowner’s right to cancel the loan modification contract from 3 business days to 5 business days and makes the Notice of Cancellation process simpler.
Since Parsa Law Group doesn’t even offer a Notice of Cancellation to its clients, I guess this wouldn’t apply to them, right?
The new law will also prevent foreclosure consultants / pretend law firms from obtaining a Power of Attorney from a homeowner for any reason.
It will also require foreclosure consultants / pretend law firms to register with the Department of Justice and maintain a surety bond of $100,000.00. And the DOJ (who henceforth will be the oversight board) will reserve the right to refuse to issue or to revoke a foreclosure consultant’s registration.
A violation of these provisions will be a crime. But what about the next SIX months before AB 180 goes into effect?
Please help Bad Biz Finder take action NOW by reporting any unlawful activity for which you are aware to badbizfinder@aol.com.
Thank you.
Bad Biz Finder
badbizfinder@aol.com
http://badbizfinder.wordpress.com
Posted by: Bad Biz Finder | Saturday, January 24, 2009 at 07:06 PM