You would think people with mortgage problems have enough trouble. But rogues in real estate always find new ways to inflict more.
Last year it was foreclosure rescue schemes that robbed desperate people of their homes. Now, it’s loan-modification firms taking cash advances from struggling borrowers and disappearing.
Home Front has heard countless stories from struggling borrowers of phone calls offering to mediate with banks for $2,000 to $4,000 or more. Many are so desperate and confused they pay for what they can do themselves or get for free from nonprofit loan-counseling firms. Some say they have paid their advance fees, then can’t reach the firm.
The California Department of Real Estate cites an “explosion” of for-profit loan-modification firms as the foreclosure crisis deepens. Former lenders and real estate agents have retooled, and jumped to the newest way to generate income.
“In some instances the licensees entered the business not appreciating or understanding what the rules were,” said department spokesman Tom Pool. “You have another group that’s just not licensed and looking to make a buck.”
Last week, vendors passed out postcards for modification firms at a free Hope Now foreclosure-prevention workshop in Sacramento. State and Consumer Services Secretary Rosario Marin said solicitors always stalk such free events “and we boot them out.”
Now, so many have complained of harassment and rip-offs that…
