Washington State Brings Legal Actions against Two Companies that Allegedly Preyed on Homeowners

by San Antonio Attorney

The Consumer Services Division of Washington State Department of Financial Institutions sued two companies for running illegal mortgage loan modification schemes that tricked homeowners into paying hefty upfront fees, but did not do anything to help them stop foreclosure.

The Federal Trade Commission, Consumer Financial Protection Bureau and 15 states are joining together in a federal-state sweep targeting the illegitimate operators that prey on homeowners.

After these scammers get the payments, these unscrupulous operations usually fail to resolve or provide any services for the homeowners, putting their victims at greater risk of losing their homes.

Typically, customers of these illegal operators found that instead of obtaining mortgage relief, the offenders did not file a loan modification application for them, or the application was rejected. A lot of homeowners found themselves facing foreclosure or seriously delinquent.

Loan Modification scams are growing at a fast pace. According to DFI Director Scott Jarvis, it has become a national problem. They are initiating a national effort to try to fix it.

The companies involved in the case filed by DFI are Serrano Financial LLC, Michael A. Rabel & Associates, LLC, and dba Default Services and dba Default Servicing. According to DFI, the operators were running a loan modification business in the state without a permit and they violated the state and federal laws by taking an upfront fee.

There is actually no technique or expertise involved in applying a loan modification. The borrower simply files the application and the mortgage lender will communicate with homeowner if he or she qualifies for any modification programs. So if a loan modification company says they have successfully obtained home loan modifications for 90% of its customers or promises that it can halt a foreclosure, this is a red flag. A trustworthy housing consultant will not promise that the foreclosure process will be prevented.

 

 

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