Archive for the ‘Mortgage Scams’ Category

Scam Alert: Fake Squatters Cash in for Keys

February 9, 2012 Leave a comment

According to KABC, two suspects have been arrested for an alleged scam involving fake home rentals. Investigators say the pair broke into foreclosed homes and then claimed they were living there legally.

The two allegedly would enter foreclosed and vacant homes, change the locks, turn on the utilities in their name and call the bank requesting “Cash for Keys.”

The San Bernardino County District Attorney’s Office says the bank, many times believing that they were renters, would simply pay the cash just to get them out.

After making thousands of dollars on the scam, the two were caught at a home in San Bernardino when law enforcement came to arrest them for squatting before they could collect the money.

Vance Welch, San Bernardino County deputy district attorney, says this scam is an example of how the banks need to be more proactive. But also law enforcement needs to not “look the other way” when dealing with squatters.


Debt Relief Window Closing Soon

January 19, 2012 2 comments

A tax relief provision enacted by Congress to help financially strapped homeowners will soon be expiring. The 2007 law allows taxpayers to exclude from income the amount of debt that is forgiven or canceled and will expire Dec. 31 of this year.

The Chicago Tribune explains:

Under the tax code, borrowed money need not be reported as income because you have an obligation to repay. But if the lender subsequently cancels what you owe, the IRS requires that you report that debt as income because the duty to repay it no longer exists.

For example, if you owe $250,000 and your lender forgives $50,000 of that debt in a $200,000 refinancing, that $50,000 is considered income. If your combined federal and state marginal tax rate is 36 percent, you would owe $18,000 in taxes.

However, under the Mortgage Forgiveness Debt Relief Act of 2007, taxpayers are allowed to exclude from income the discharge of debt on their principal residence — at least until 2013.

So when your lender agrees to a short sale, there is no tax on the difference between the selling price and the amount you owe. When your lender forecloses, there is no tax on the canceled debt. Even when you refinance at a lower loan balance, there is no tax on the difference between what you owed on the old loan and what you now owe on the new one.

However, with the upcoming expiration of the Act, all residential mortgage debt relief that takes place on or after Jan. 1, 2013, will once again be considered taxable income.

Since the average time it takes to process a foreclosure – from the first missed payment to the final foreclosure auction – is about 674 days, as reported by PS Applied Analytics, some experts are sayin the tax absolution window may already be closed for foreclosures.

Short sales and refinancing are also long, drawn-out processes that can take anywhere from two to ten months which means that if finding debt relief was on your list of resolutions, this is one to begin working on sooner, rather than later.

Consult an experienced real estate attorney to determine your best and quickest options for debt relief. We also suggest speaking with a tax professional who can help you determine how your debt relief will affect your taxes.

Scam Alert: Group Taking Over Foreclosed Houses and Renting Them Out

January 12, 2012 Leave a comment

Chula Vista realtors are outraged by a new organization called the “Prudent Constituents Association” which allegedly illegally takes over dozens of homes in Chula Vista, renting them out and then profiting from them.

Using quit claim deeds and other processes, PCA takes over a foreclosed home and rents it out, allegedly using the money to pay for taxes and litigation for retribution against lenders.

PCA founders, Dexter and Dianne Brown, insist their actions are helping distressed homeowners and is a public service while area realtors disagree.

Several realtors agree that the practice is not new but it is spreading in Chula Vista. The realtors allege PCA has found a loophole where they fraudulently file a “quit claim” document with the county, which effectively signs the property’s rights over to PCA. The realtors said the county doesn’t have the manpower to make sure PCA is in fact the real owner.

Several realtors said they’ve contacted the Chula Vista Police Department and the San Diego County District Attorney’s Office, but neither could confirm they are actively investigating the PCA.

Check out the full report on

Scam Alert: Feds target HAMP scammers bilking owners

December 28, 2011 Leave a comment

Earlier this month, a multi-agency task force was announced designed specifically to deter scam artists preying on homeowners looking for help under the Home Affordable Modification Program (HAMP).

The task force will operate under the Department of the Treasury, the new Consumer Financial Protection Bureau (CFBP) and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP.)

According to the New York Post, the latest scams tied to the Home Affordable Modification Program, were lead by mortgage servicers, which manage loans day to day. They have collected a total of $666 million from the government for participating in HAMP.

From the New York Post article:

The typical fraud works like this. A scam artist advertises online, pretending to be affiliated with the government. The scammers charge an average of $4,500 upfront, do no work, then skip out with the cash. Some borrowers are even losing their homes as a result of scammers’ advice to ignore foreclosure notices.

We at Avid Law Center think it’s vital for homeowners to know how these scams work and make sure they do their research when hiring assistance with the loan modification process.


Scam Alert: New Arrests in Stockton Foreclosure Scam

December 21, 2011 Leave a comment

Earlier this month, Attorney General Kamala D. Harris announced the arrests of three top officers of a Stockton real estate company who took thousands of dollars in up-front loan modification fees and made false promises to lower the mortgage payments of struggling Central Valley homeowners.

Magdalena Salas, 42, Angelina Mireles, 42, and Julissa Garcia, 36, of Stockton, were arrested on 13 felony and two misdemeanor counts, including conspiracy, grand theft and false advertising.

“These scam artists preyed on innocent homeowners who were simply trying to protect their homes and families from foreclosure,” Attorney General Harris said. “The mortgage crisis has caused tremendous damage to our state and to California families. There is nothing worse than those who seek to capitalize on this devastation by defrauding Californians who have already been victimized in this crisis.”

Attorney General Harris formed a Mortgage Fraud Strike Force in May 2011 to investigate and prosecute mortgage fraud.

Scam Alert: California AG Charges Two with Loan Modification Scam

December 15, 2011 Leave a comment

mortgage scam alertAccording to a press release from California Attorney General Kamala Harris‘ office, two owners of a Southern California-based loan modification company were arrested last Tuesday on charges that they scammed thousands of distressed homeowners across the country out of more than $6 million,

Huffington Post reports that Christopher Fox and Curtis Melone, both 37, were accused of illegally charging struggling homeowners $3,500 each in exchange for assistance in securing loan modifications that the attorney general says were never performed.

Fox and Melone allegedly collected fees from customers before performing services, despite California law prohibiting foreclosure assistance firms from taking money until the related services have been performed. In addition, their company, Green Credit Solutions (also known as Guardian Credit Services and Get My Credit Grade) allegedly stated that loan modification services would be performed by lawyers, when its only staff attorney was a disbarred Tennessee lawyer who claimed to have partners at “Smith Harris PLLC,” an already defunct law firm.

“Homeowners continue to struggle throughout California and across the country to hang onto their homes, and this prosecution is another warning to predators who would seek to profit from their distress: this kind of criminal conduct will meet with swift and certain consequences,” said Harris in a statement.

If you are seeking assistance with a loan modification, we advise you to check the California State Bar website to verify an attorney’s license and ensure you are working with a credentialed attorney.

California and Nevada Form foreclosure fraud alliance

December 13, 2011 1 comment

Two of the hardest hit states in the nation’s foreclosure and mortgage crises have formalized a joint investigation alliance to help homeowners victimized by fraud.

According to, California Attorney General Kamala D. Harris and Nevada Attorney General Catherine Cortez Masto said they are willing to partner with other states and provide support as California and Nevada investigate fraud in foreclosures and mortgages.

As part of the alliance, the two states will share information, subpoenas and witnesses, and will also seek reforms to protect homeowners, the officials said. Harris described the mortgage crisis as nationwide “man-made disaster” that has inflicted its worst toll on California and Nevada.

Ongoing investigations in California and Nevada are looking at a range of alleged misconduct by mortgage institutions and others. So far, the alliance has produced “millions of pages of documents” and the development of mutual targets for investigators, officials said.