In Second Life, From Predatory Lenders To Scam Artists
By dday Monday Jul 20, 2009 4:00pm(Hi, dday here from Hullabaloo and Calitics and my own site D-Day. Thanks to John for having me over for the week to fill in for Dave Neiwert.)
I don't think I'm being hyperbolic by saying that the average subprime mortgage broker should probably be in prison by now. They took loans that their customers had no possibility of paying back, often by forcing them into exotic arrangements where their payments would shoot up by double after a reset. They got bonuses for putting people into a higher interest rate than what the borrowers could qualify for. Now lots of those loans have gone sour, but the broker's company has already passed on that risk in the form of mortgage-backed securities. Indeed, these same lenders who preyed upon homeowners by getting them into residences they couldn't afford are now ripping them off again by setting up loan modification companies.
Yet the dangers assailing Mr. Soussana’s clients have yielded fresh business for him: Late last year, he and his team — ensconced in the same office where they used to broker mortgages — began working for a loan modification company. For fees reaching $3,495, with most of the money collected upfront, they promised to negotiate with lenders to lower payments on the now-delinquent mortgages they and their counterparts had sprinkled liberally across Southern California.
“We just changed the script and changed the product we were selling,” said Mr. Soussana, who ran the Los Angeles sales office of Federal Loan Modification Law Center. The new script: You got a raw deal, and “Now, we’re able to help you out because we understand your lender.” [...]
FedMod is but one example of how many of the same people who dispensed risky mortgages during the real estate bubble have reconstituted themselves into a new industry focused on selling loan modifications.
Despite making promises of relief to homeowners desperate to keep their homes, FedMod and other profit making loan modification firms often fail to deliver, according to a New York Times investigation based on interviews with scores of former employees and customers, more than 650 complaints filed with the Better Business Bureau, and documents filed by the Federal Trade Commission in a lawsuit against the company. The suit, filed in California federal court, asserts that FedMod frequently exaggerated its rates of success, advised clients to stop making their mortgage payments, did little or nothing to modify loans and failed to promptly refund fees. The suit seeks an end to FedMod’s practices, and compensation for customers.
“Our job was to get the money in and then we’re done,” said Paul Pejman, a former sales agent who worked out of FedMod’s two-story headquarters in Irvine, Calif. He recounted his experience, he said, because “I really feel bad.”
Before state regulators and the Feds figured out this was going on, hundreds of loan modification companies took probably billions from distressed homeowners and provided virtually nothing in return. They saw opportunity in crisis - and they also CREATED much of the crisis by selling the homes to people who couldn't afford them in the first place.
Special place in hell reserved for them...
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There is indeed a special place in hell for these people I think. But sadly, this shows our society is very sick. I just pray it isn't terminal.
what's sick without terminal?
where do I pick up my paycheck and what's my schedule next week?
"Before state regulators and the Feds figured out this was going on"
They knew what was going on don't kid yourself
First thought: "Are these the guys that were responsible for the Ginko scam?"
Ah damn, outed myself... >.<
always expand faster than the ability of the law to prohibit or punish the scum-bags who prosper on those margins, or its desire to actually do so...
Caveat emptor, motherfucker!
What do you people have against free market capitalism?
Commies! Do you want some government bureaucrat coming between you and your mugger?
and some are worried, so concerned, about the insurance industry...
"what will they do when government takes over health care?"
is when those that paid their fee upfront and got no action left angry or desperate voicemails the agents played them on speakerphone and laughed.
Thanks dday, I was so pissed off I actually took the time to write my own little post over at FDL. The good news is that California Assemblyman Pedro Nava (D-Santa Barbara, Ventura) has gotten a bill (AB 764-Homeowner Fraud Prevention Act) through the assembly and it has also passed the banking committee in the senate. It prohibits anyone taking fees upfront for loan modification. DO NOT PAY FOR A LOAN MODIFICATION.
The State Bar is also sanctioning those lawyers who lend their name (and license) as a way for repackaged scammers to collect those fees upfront. They plan to fully prosecute anyone preying on people facing foreclosure.
I agree. These folks get an extra hot place in hell. But a scorpion is a scorpion no matter what you call it.
Unbelievably some are howling about this new bill. One was even recommending one of the scammers! So do be careful people.
to deal with predatory lending for a while, and it hasn't worked out - Schwarzenegger vetoes the bills. When the Chamber of Commerce says jump he says how high.
...the BIGGEST sub prime lender is in effect The Fed. period.
I'm sure there are plenty of scumbag mortgage salesmen out there who should be in jail but...
The Fed was the one that lowered interest rates in the first place which merely enabled these scumbag lenders to operate.
"banks/mortage lenders" that didn't participate in the "freeforall low interest lending that was "offered up" by Greenspan-n-Burnbanke basically got left in the dust.
Greenspan and Burnbanke are ultimately responsible for this shit.
...anyone remember? when Chimpy used to "brag" about how "more Americans now own their own homes than ever before in history" ...or some such shit. I remember him saying it multiple times...
"Before state regulators and the Feds figured out this was going on..."" LOL! Evet is right, (they knew what was going on) ...but bubbles need air. ...and thats what our money supply is based on...
So I get this request to rent my 1BR granny unit on my duplex. It's from a guy in Sacramento who only needs a quick place to stay while working in town.
He supposedly got a great gig in mortgage...
So he rents my place and on the last day of the first month, he calls me at 5:30PM and says he's already moved out. Great 30 day notice. How about 30 minute notice.
Anyway, so I get a call from a telemarketer to redo my mortgage, set an appointment, etc.
Guess who my "agent" is? Yep, the shyster who left without notice.
So I give him the opportunity to convince me to do the refi game. At the end of the hour, it's all about saving thousands per month...but you have to give them $2500 to get the "paperwork" started...
A month later I call my bank, Wells Fargo, and ask them about refinancing my existing loan. In ten minutes I've dropped my payment from $2600 to $1400 per month. Really.
with teeth!
http://isteve.blogspot.com/2009/03/thomas-geo...
The-Very-Few’s “allowed” theft of this nation’s wealth is no longer conjecture. It is fact.
But the worst part of the theft, (which is the largest wealth transfer theft in written history,) is/was the “allowing” of it by the ‘citizens’ of this nation, without real protests, without revolt, without courage.
The insane “allowing” over the past 40 years, particularly during the eight years of the Bush administration, can only be rationally described as insanely self-destructive.
Maybe this link will help? Actually I've kind of concentrated on the theft for some time now, so maybe a scroll through the links that I provide at my blog, may be of some help to those also researching this?
In reality, “Wake up” is now too late... for way too many things.
for apathy in this country lies at the feet of mass media , fast food and all to many people's only thought is SFN *. imo .
* Something for nothing
Have been around a long time. They keep showing up with another scam to pull and lending scams have been going on for ages.
There was a man that was sherriff here at one time.
He had several barely standing shacks he called houses.
He would rent these houses and the people that lived in them did not have anything to start with. He would talk to them and end up finding out that they were going to get some income tax money back, or that someone in the family had died and they were going to get a small insurance check. Then he would start his sales pitch. He would sell this property to them on a land contract, using the money they were about to get as down payment. The rest would be installments of what ever amount they arrived at. The point being, he knew these people could never meet the obligation. The whole purpose of the deal was to take what little they had. I guess there is no way to know how many times he did this. Although I do know that one time he miss judged the person and they paid all the payments.
The point is there are plenty of people out there that don't mind to rob you any way they can. Whenever I see pollitition I think crook.
republicanism is a mental illness!
that we humans must play the blame and shame game...
Almost all of us share responsibility for the 'something for nothing' mindset that has resulted in this macro level hedonism we're witnessing. It is an integral aspect of capitalism, which remains the predominate form of our economic behavior since almost every one of us poor slobs buys into the wealth carrot meme (e.g., you, too, can be a millionaire, if you only work hard enough, eat beans and rice for as long as it takes, etc., etc., etc., ad nauseum).
Well, the sad truth is that less than 500 humans worldwide control better than 45% of the world's resources. Folks, there are over six and a half billion people on this planet!!! Do you not see the glaring disparity here?!?
I remain hopeful that we are going to get our collective heads out of our collective butts and do something about this. And, with global internet access, doing something could be a bloodless coup. (Frankly, I think this is what Bloody Bill Kristol and his ilk fear first and foremost, but they won't touch this topic for fear of an immediate aha moment rippling throughout the world...)
What do you people have against free market capitalism?
Commies! Do you want some government bureaucrat coming between you and your mugger?
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Fraud is not free market capitalism, it is a criminal act of theft.
It is not acceptable for people to steal other people's money. That is what results in bureaucrats coming between you and your mugger.
If you don't want communism, get yourself after the thieves, such as these and Hank Paulson.
What do you people have against free market capitalism?
Commies! Do you want some government bureaucrat coming between you and your mugger?
-------------------------
Fraud is not free market capitalism, it is a criminal act of theft.
It is not acceptable for people to steal other people's money. That is what results in bureaucrats coming between you and your mugger.
If you don't want communism, get yourself after the thieves, such as these and Hank Paulson.
...the BIGGEST sub prime lender is in effect The Fed. period.
I'm sure there are plenty of scumbag mortgage salesmen out there who should be in jail but...
The Fed was the one that lowered interest rates in the first place which merely enabled these scumbag lenders to operate.
----------------------
Alan Greenspan wanted a housing bubble. Therefore there was a housing bubble.
1) In 2000, Greenspan refused to tighten lending standards after being warned within the FED, to do so. Greenspan enabled these scumbafg lenders to operate.
2) At the bottom of the rate cycle, Greenspan told home buyers to get adjustable rate mortgages. ARM's were necessary in order to create a bubble.
3) At the height of the bubke, Greenspan praised reckless lending programs as being the only means by which people who could not afford to buy a house, were able to do so.
Alan Greenspan was at the top of a massive financial fraud.
Quite seriously, he belongs in prison, right along side Bernie Madoff
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