Loan Modification Consultants sued for scamming desperate home owners.

A SWAT style sweep on Loan Modification and Mortgage Refinance “consultants” ended with 189 legal actions filed accusing the so-called consultants of bilking homeowners desperate not to lose their home and desperately in need of reducing their monthly expenses.

The legal actions against the loan modification consultants include cease and desist orders by the Federal Trade Commission Chairman Jon Leibowitz and the California Attorney General Edmund G.Brown were part of a nationwide sweep against conmen consultants in 19 states.

This sweep has been set as a nationwide announcement to warning to scam artists in the mortgage industry by the Trade Commission Chairman who asked homeowners to be on guard against from being exploited.

According to the chairman these loan modification consultants are “full of hollow promises designed to fatten the pockets of criminals and con men”.
What do these suits against these loan modification consultants consist of?

The charges make interesting reading, for instance the Lucas Law Center allegedly persuaded borrowers to stop paying their mortgages to pay the company’s fees that mounted up to $4,000. The main charge is to knowingly mislead customers into over paying and paying for services that were not carried out.
These suits aim to set an example of these consultants. Attorney General Brown filed suits that include claims against five firms and their staff. Brown is suing for millions of dollars in civil penalties, restitution to the victims / customers and permanent injunctions to keep the defendants from practicing in the mortgage services industry.

It is easy to say so in hindsight but by looking back at the beginning of the year you could have seen the writing on the wall when loan modification consultants popped up like mushrooms after a rainy night. All offering amazing results for a juicy fee.

What makes this a tragedy is that when the nation requires more the services of honest, hard working mortgage and loan consultants that can help put in order the mortgages of millions of people, scam artist like these put in disrepute the whole industry destroying what was already a very weak trust.

We must hope that up side of this story is that conmen nationwide and worldwide notice that fraudulent behavior will not be accepted, especially against desperate homeowners that will try next to anything in an attempt to save their home.