Scams Rampant In Foreclosure Fraud Hotbed

CBS Evening News: Growing Number Of Scams Target Homeowners Struggling To Keep Homes

(CBS)  Amid much economic turmoil for homeowners, there's a new scam involving companies that promise to reduce monthly payments. CBS News chief investigative correspondent Armen Keteyian found that many homeowners who seek their help are winding up in foreclosure, instead.

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Victims plead for help with operators at a government call center in Florida, a hotbed of foreclosure fraud.

"It's probably increased 20 to 30 percent over the last two or three months," said Scott Palmer, who works in the Florida Attorney General's office and oversees the call center.

Palmer says the growing number of scams target homeowners hoping to reduce their payments or avoid losing their homes, Keteyian reports.

"They're successful because people are desperate," Palmer said. "They're looking anywhere for help."

That's because more than one million families nationwide who bought homes with sub-prime or adjustable rate mortgages are now facing increased monthly payments they may not be able to afford.

That opened the door last year to companies like Outreach Housing of Fort Lauderdale, Fla., which made more than $2 million last year promising mortgage relief.

"It's important you get the assistance you need to lower your payment," one ad said.

For homeowners the pitch went like this: They would pay Outreach Housing an upfront fee of about $1,200. They would then stop paying their lender and instead pay Outreach every month an amount equal to two-thirds of their monthly mortgage.

That's money homeowners like Frank Kosa believed they would go toward their mortgage while Outreach worked with his bank to reduce his payment.

"They said 'don't worry about anything. Don't pay anything. We are taking care of everything,'" said Kosa.

But they didn't. Instead, as victim after victim told CBS News, they got taken.

According to a lawsuit filed by Florida Attorney General Bill McCollum, Outreach Housing was engaged in a "systematic pattern" of "fraudulent," "unfair" and "deceptive" practices, leaving behind at least 600 victims.

And it was all orchestrated by the man who started the company, Blair Wright.

"I cannot believe they truly felt they were going to help these people," McCollum said. "I think it was greed."

Wright, who was twice sanctioned by the state's top financial regulator, refused an on-camera interview with CBS News, citing "ongoing litigation."

So Keteyian tracked Mr. Wright down at his office in Fort Lauderdale, asking him what he had to say to the people who feel they've been wronged.

"You need to remember there is a bigger villain in all of this," Wright said.

"And who would that be?" Keteyian asked.

"That would be the banks that are doing the foreclosures," Wright said. "Thanks very much."

Keteyian asked: "So there are bigger villains than you? So everyone else is wrong, Mr. Wright?"

"Read the e-mail," Wright said.

"So you don't want to talk to me?" Keteyian said.

In the e-mail, Wright blames some of his own employees, who he is now suing, including one he claims "mismanaged hundreds of Outreach client cases." He also says he's refunded $640,000 to hundreds of homeowners to date - a figure the Florida Attorney General can't confirm.

Late last week it shut down Outreach Housing, citing what it called "illegal activities." That closed the door on Blair Wright and his business of "helping" homeowners - at least for now.

[4closureFraud]

During the housing boom, "lenders" passed around mortgages as if they were whiskey bottles at a frat party. Appraisals were overinflated, notes were lost, destroyed, shredded, sold into multiple pools. Mortgages were not recorded and exorbitant fees were collected by the big firms on Wall Street.

Now that the bubble has burst, these ?lenders? are trying to collect on loans they do not own, in most cases never lent a dime on the transaction, have no right to, or were paid 30 times over in bailouts, insurance, credit default swaps, etc.

In almost EVERY case these "pretender lenders" do not and did not have any "skin in the game". Almost all loans during the boom were securitized and it was investors that put up the money, not the banks.

Now these "pretender lenders", the "servicers", along with MERS, Mortgage Electronic Registration Systems, are unrightfully taking peoples homes by filing fraudulent mortgage assignments to process foreclosures.

Do the research. See for yourself...

It is all in the public records...

http://4closurefraud.wordpress.com/

4closureFraud

[CraigBerkeley]

Beware Of Fraudulent Foreclosure Notices. Many of these Notices of Default are not real, they are fraudulent and they are just another way to steal houses. Then the fraudster ?sells? the stolen house under a fraudulent Trustee?s Deed. http://reno.broowaha.com/article.php?id=3825

Reno, Nevada?s Countrywide Home Loans manager Sue Barry should also be charged with Mortgage Fraud, along with Prudential Nevada Realty former Regional Manager Valerie Mapes, former Prudential Nevada Realty Realtor Keith W. Gledhill, Mortgage Fraudster Reno landlords John and Kay Sickler, Mortgage Fraudster Reno escrow officer Jenna Kay Clark and her company Reno?s First American Title, Reno Realtor Allan Zane and his Broker Magi Bird, and Reno?s First American Title.
http://reno.broowaha.com/article.php?id=3415
http://reno.broowaha.com/article.php?id=3300
http://reno.broowaha.com/article.php?id=3320
http://reno.broowaha.com/article.php?id=3351
http://reno.broowaha.com/article.php?id=3372
http://reno.broowaha.com/article.php?id=3377
http://reno.broowaha.com/article.php?id=3397
http://reno.broowaha.com/article.php?id=3404
http://reno.broowaha.com/article.php?id=3421
http://reno.broowaha.com/article.php?id=3430
http://reno.broowaha.com/article.php?id=3448

For copies of the supporting documents that have been uploaded, see http://renomortgagefraudexposes.ning.com/

[BarbaraAnnJackson]

re: Fraudulent Foreclosures, Evictions Not Valid, 1099 IRS fraud

AUTHORITIES are ignoring that the most lethal factor of the mortgage crisis is FORECLOSURE FRAUD. It happens when DEBT COLLECTOR ATTORNEYS deliberately file court cases of foreclosures under names of defunct mortgage companies, or companies which do not own the promissory notes. These collectors commit extortion by confiscating properties illegally and charge fees far beyond "Acceleration Clauses," thereby making it impossible for borrowers to recover their properties or bring current the mortgage arrears. SEE: http://chuckgallagher.wordpress.com/2008/01/03/foreclosure-fraud-an-interesting-variation-of-mortgage-fraud-comments-ethics-speaker-chuck-gallagher/.

When property owners sue for "Unfair Debt Collection Practices," etc, collectors make even more $$$$ through protracted litigations. (*An example of protracted foreclosure litigation in lawsuit: ?Super Future Equities v. Wells Fargo Bank, et al.?) Fraudulent foreclosure proceedings mean that people actually HAVE NOT lost ownership of their properties, and evictions are illegal, but those homeowners don?t know it. For predatory and deceptive mortgage lenders, foreclosure frauds are bonanzas because it creates real estate FLIPPING fraud, and misleads Investors concerning housing markets. SEE: http://www.lawgrace.org/2008/09/14/lehman-brothers%E2%80%99-mortgage-troubles-nationally-evidence-of-foreclosure-fraud-deception-and-conspiracy-with-wells-fargo-deceptive-judicial-filings/

Also, foreclosure fraud makes it possible for mortgage companies like Wells Fargo Bank, NA to file with the IRS false 1099-A?s and 1099-C?s for purposes of unlawful tax write offs and tax credits. SEE: http://www.lawgrace.org/2008/08/08/my-august-8-2008-statement-to-the-louisiana-secretary-of-state-office-of-financial-institutions-concerning-wells-fargo-irs-and-mortgage-frauds-sham-foreclosures-and-judicial-collusion-and-national-app/. (Also, far too many distressed homeowners have no idea about tax consequences false 1099's from a mortgage company could cause.)

Additionally, an alarming amount of unscrupulous debt collector attorneys are committing amazing fraud in Bankruptcy Court because of ?lift stay? motions they filed via use of names of an entities which have no ?standing,? or have no ?real party interest.? Put plainly, foreclosed homes are an alarming epidemic, but it does not mean that all foreclosure proceedings are lawfully executed. The BIG picture is that there are thousands of people who being rendered homeless, yet those judicial proceedings to take those homes were dishonest, in violation of law, and in too many cases criminal. In a nutshell, NOT UNTIL a valid foreclosure case is filed in court, can a valid loss of the home occur. Unfortunately, in light of the nationwide MORTGAGE MESS, most likely foreclosure fraud exists on a NATIONAL LEVEL. For irrefutable proof and extensive details of the foregoing statements, visit http://www.lawgrace.org.

Barbara Ann Jackson
Law & Grace, Inc.

[acpisflawed]

Unfortunately, McCollum will fall short of bringing this to fruition, leaving everyone still exposed. He does that. He does it all the time. Sloppy! And where was he when this was all developing? Oh yes, hanging with his guilty friends doing these deeds! Shameful!

[blindersoff]

Never pay money to work out a deal. If you have $1200 that should go directly to the lender, deal with the banks directly. Everyone should know this. I do feel badly for these people and would like to see the company owner spend some time in jail.

[exusmcsgt]

"They''re successful because people are desperate," Palmer said. "They''re looking anywhere for help."
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And why are so many "desperate"?

In many cases, it''s because they wanted the most expensive house they could qualify for instead of buying a more modest property.

Living on the edge...owing every dollar before it''s earned.

I remember when I bought this place the lender said "you qualify for double the house".

I responded that I didn''t need "double the house".

If people measure me by what I own, their opinion matters not to me the first place.

"Keeping up with the Jones''" has put a lot of people in the poor house.....

[ms1-1-11]

IOWEIGN

...in addition he neglected to mention the fraudulent charges these so called "LENDERs" added on without the consent of the borrower in our case the lender Community Lending of Las Vegas Nevada, a/k/a Com Lending et al., charged lenders as "INVESTMENT PROPERTY" NOT residential property and is now in BANKRUPTCY in San Jose California, they got away with fraudulent charges on ALL loans, when law suits emerged against them they fast and furious filed bankruptcy we had well over $37,000 in fraudulent fees tacked onto our loan, when we filed a law suit instead we were given a Bankruptcy notice.

Same gig GM is pulling after they got the bail out funds 2008 plus bonus plus perks. Nice gig if you ask me. They walk away scott free and clear laughing all the way to the banks.

[ms1-1-11]

...FORT LAUDERDALE, Fla.,
Here comes yet another CEO White Boy it was all orchestrated by the man who started the company, Blair Wright that should join the likes of Michael Milken in Lake Tahoe California...what is it with these con artist showing up a dime a dozen ... hot fast and loose ...

Sounds to me like these CEOs, COOs, CFOs, need to be taught a valuable lesson along with their families once they start loosing their lifes and families they might just get a real good message...

[blondchic]

This is a shame because there are good companies out there that are really helping people face their mortgage company in getting a fair re-modification. Fraudulent loans, extremely high interest rates, and over priced appraisals flood the market and it%u2019s the home owners who are paying the price as the CEO%u2019s of these banks use the bailout money to give themselves huge bonuses and extravagant parties. Pre-paid home rescue%u2019s use real lawyers to confront these banks and hold them accountable, it%u2019s worth the money. If a company wants to keep any of the pre-paid funds after failing to negotiate a decent deal, you shouldn%u2019t use them. Companies like Property Trust Group gives a 100% refund if you don%u2019t get a substantial deal savings hundreds of dollars a month. They saved my home!!!!

[wheear]

Where is the moratorium Obama promised on the election trail?

[pforeclosure]

For the homeowners looking to avoid being scammed, here is a good non-profit online resource center to start doing your research: http://preventingforeclosure.org (specifically the article on how to avoid being scammed http://preventingforeclosure.org/2008/10/beware-of-foreclosure-rescue-scams/)

[allzwell]

Madoff and the rest of them should be strung after we strip these predators of their ill gotten gains. Put their families on the street, let them live in their BMW''s.

[ioweign]

Actually he DOES have a point, there are MUCH bigger villains in this piece, including the Congress of the United States and the then President, Bill Clinton, who required that lenders provide loans for people who were in NO WAY qualified to get them.


Posted by CaligulaAVG at 08:48 PM : Feb 12, 2009

Your comment is false - The Community Reinvestment Act (or CRA, Pub.L. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. ' 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. Community activists had lobbied the US Congress to pass the Act in order to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.

"The Act requires the appropriate federal financial supervisory agencies to encourage regulated financial institutions to meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation."

Repeat - to encourage "regulated" financial institutions to meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation.

[caligulaavg]

Some further explanation and clarification on my post below :

Now, the underlying securities could have failed and the PUTS been paid with NO significant problem, EXCEPT, the banks wrote far far more PUTS than they had the assets to cover once the underlying mortgage backed securities tanked, and because they were written naked (without being tied to a specific underlying security) the exposure was MANY times greater than if there''d been just ONE PUT per 100 shares of the security. The banks, however, in their greed, wrote many MANY more. THEY are the biggest villains in this case, and they are the ones getting bailed out.

Now you see why going after people giving clueless people equally clueless advice is stupid when the ones that created the disaster knew full well what they were risking when they were doing it, but did it anyway. They SHOULD NOT be getting bailed out. I end with a quote from my favorite President :

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered"
Thomas Jefferson, 1802

[caligulaavg]

Actually he DOES have a point, there are MUCH bigger villains in this piece, including the Congress of the United States and the then President, Bill Clinton, who required that lenders provide loans for people who were in NO WAY qualified to get them.

After the banks finally created a mortgage they could afford (one with little actual equity being created and alot of nice fees and interest to the banks being paid), then bundled those mortgages as securities, and THEN (this is the most important part) sold those securities on the equities exchanges and then sold naked PUTS on those securities on the options exchanges NEVER EVER expecting those PUTS (essentially insurance on the mortgage backed securities only sold to people who didn''t even necessarily own those securities, a form of short selling via equity derivatives) to actually go seriously into the money and for them to have to satisfy those puts (essentially requiring them to buy back the contracts at HUGELY inflated prices due to the failure of the underlying securities).

[jetranger7]

Ya, a Rope, a pair of handcuffs and a FREEWAY Overpass are in his Future !!! Throw him off the Bridge !!!!