CAMPAIGNS AGAINST MORTGAGE SCAMS ESCALATE
HOME LOANS, INDUSTRY NEWS, SHORT SALES, TIPS FOR SELLERS, TIPS FOR SENIORS
November 11th, 2008
Last week, the California Attorney General Edmund G. Brown Jr. announced busting up a mortgage scam
that preyed on desperate SoCal homeowners. These homeowners were “ripped off for thousands of dollars” while their homes fell into foreclosure. As a result, Attorney General Brown stated “Our campaign against mortgage scams masquerading as foreclosure assistance will continue and even intensify.”
Three individuals in the San Gabriel Valley were arrested by FBI agents busting up the fraud ring. Those arrested face 39 felony counts including grand theft, money laundering, and conspiracy charges. The company’s in question went by First Gov and Foreclosure Prevention Services. Like many other scams, they promise to stop foreclosure, renegotiate their loans, reduce monthly payments, and transfer delinquent loan amounts to the renegotiated principle. They required an upfront fee ranging from $1,500-$5,000 (RED FLAG), told their victims to stop making mortgage payments (RED FLAG) and not to communicate with their lender (RED FLAG).
In one case detailed in the news release, a couple in Redlands responded to a mailing and were visited by a representative of First Gov. They were asked to secure two cashier’s checks each for $2,023.58 which represented the combined total of their first and second mortgage payments. The con artists set up bank accounts at Bank of America under business names such as “Reinstatement Department” or “Resolution Department” and asked the victims to make the checks payable to these names. The checks were in fact deposited to these accounts but were never applied to their mortgages. The couple continued to receive letters from their lenders that their home was being auctioned. Many anxious calls to First Gov went unanswered until finally getting a return call that their loan modification had been approved.
The next day, First Gov called again saying loan documents would be forwarded for signature but they needed another check for $2,023.58 to be deposited to a Washington Mutual account for the lender. Once that deposit was made, they never heard from First Gov again. They lost more than $6,000 and were informed by their lenders their loans had not been renegotiated.
The fraud ring is still in business. Their flyer is printed on goldenrod-colored paper in a yellow envelope. So far they have duped Californians out of more than $700,000. “California homeowners should be aware of the warning signs of foreclosure scams, so they don’t fall victim to these cynical schemes,” Attorney General Brown said.
Legitimate help for those in foreclosure can be obtained by calling 888-995-HOPE, a community-based organization that is available at little or no cost to help save your or a friend’s home!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
