The Federal Trade Commission has filed a complaint against a Huntington Beach man who it says sent millions of illegal text spam messages advertising a mortgage modification website that claimed to offer government-affiliated services.

The FTC said in the court document that Phillip A. Flora sent out text messages at a “mind boggling” rate of about 85 messages a minute, every minute of every day for a 40-day period that began on Aug 22, 2009.

During that time, Flora allegedly sent out more than 5 million illegal text messages, according to the complaint filed Tuesday in Los Angeles federal court.

The commission, in the complaint, has requested that the court freeze Flora’s assets and order a permanent injunction against him from sending such text messages.

Among the messages sent, some read: “Homeowners, we can lower your mortgage payment by doing a Loan Modification. Late on payments OK. No equity OK. May we please give you a call? Loanmod-gov.net,” the complaint said.

Some others stated: “If you are struggling to keep up with credit card payments and have more than 10k in debt, we can help. May we give you a call regarding this?” the court document said.

Loanmod-gov.net, a website that is no longer up, contained text that said it could offer “Official Home Loan Modification and Audit Assistance Information” with an image of a U.S. flag beneath it, according to the complaint.

Many of the sites and texts were designed to trick consumers into believing they were affiliated with the U.S. government, the court document said.

The commission also alleges that the text spam blasts resulted in many recipients losing money because they ended up having to pay fees to their respective mobile carriers for receiving the unsolicited messages.

The FTC said in its complaint that Flora collected contact information from those who responded to the text spam, even if they were asking him to stop sending the messages, which was then sold to marketers as “debt settlement leads.”

The commission is also accusing Flora of sending a number of e-mail spam messages to commercial e-mail marketers touting his success in sending such text message blasts.

In his e-mails, Flora promoted the texts by writing, “Currently able to send out 200k text messages a day; I designed, own and operate the marketing system. All companies on the internet charge a penny a message, I charge a tiny fraction of that and I do not charge for cell phone data because I maintain a database of 100 million cell phone opt-in uses,” the complaint said.

The e-mails failed to offer recipients a way to opt out of receiving the messages and didn’t list a physical mailing address for the sender, two items required by law for such commercial e-mails, the FTC said.

In the e-mails, Flora offered a rate of $200 for 50,000 messages and $300 for 100,000 messages sent, the complaint said.

The FTC said it was assisted in its investigation into the text message spam by AT&T, Verizon and CTIA – The Wireless Association.

– Nathan Olivarez-Giles

twitter.com/nateog

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If you ever thought the government was on our side – out to help us as homeowners, think again.  Recent information revealed that TARP money requested to be used for homeowner assistance was not allowed to be used to help homeowners.  Basically our treasury barred the use of TARP funds – and we set aside to help only banks out.  If that TARP money had been applied to only helping homeowners, where would we be today?  Probably in a lot better shape. 

It just goes to say we cannot expect the government to help us – we need to help ourselves.  Data shows that you are unlikely to get a loan modification, so your choices are either get out of the house using a short sale, or file a lawsuit against your lender for fraud (almost every loan since 2000 has fraud in it – but that’s another topic).  Many are choosing a class action lawsuit - to sue your lender – rather than an individual lawsuit. 

For assistance with your bad loan, give us a call at (619) 631-4545.

From NakedCapitalism:Thursday, December 9, 2010

Treasury Bars Use of TARP Funds to Help Borrowers Facing Foreclosure

 If you had any doubts about whose side the Administration is on, this story should settle all doubts.

From the Nation:

Consider this: the recent Fed audit revealed over $3.3 trillion in emergency assistance to the banks and other corporate behemoths during the financial crisis–no strings attached…. Then consider the 19 states which are recipients of the Hardest Hit Fund (HHF)–a portion of TARP money set aside to help homeowners in states struggling with the highest unemployment rates and steepest declines in the housing market.

Some of those states, including Ohio, let Treasury Secretary Tim Geithner know as far back as this past spring that they wanted to use some of those funds to assist legal aid groups that help individual homeowners…. Treasury solicited the opinion of an outside law firm, Squire, Sanders & Dempsey. Never mind that the firm’s clients include BB&T Corporation and payday lender CNG Financial Corp. The firm said, in essence–sorry, no can do on the legal aid. Not permitted under the TARP. Huh? Hold on a sec–is this the same TARP that granted the Treasury Secretary all those “extraordinary powers” to protect people’s home values, preserve home ownership, promote economic growth, etc.?

Yves here. The skepticism is well warranted. This isn’t an area in which a law firm would have much (any) liability on an opinion. Ergo, a combination of Treasury body language and selection of the firm would have determined the outcome. Besides, the TARP explicitly put the Treasury secretary above the law. So why is Treasury even getting an opinion? This is clearly an exercise in creating an excuse for an action it wanted to take.

The article also details actions by Rep. Marcy Kaptur and Sen. Sherrod Brown to reverse the Treasury action. Kaptur has introduced a bill (HR 5510) to amend the Emergency Economic Stabilization Act of 2008 to enable nonprofits, both counseling firms and law firms, to receive TARP funds to help single family homeowners to prevent foreclosures. Brown introduced a parallel measure (S 3979) in the Senate. Please contact your Senators and Representative and ask them to cosponsor these measures. And annoy Treasury by calling or e-mailing them (try the Domestic Finance and Economic Policy contacts) to tell them they are on the wrong side of this issue.

Mortgage fraud on the servicers and lenders part is rampant.  A forensic loan audit can uncover this fraud.   Many homeowners are seeking their own damages with a Class Action Lawsuit - by suing your lender.  Class Action Lawsuit Video.

Don’t sit back and let the lenders and servicers take away your rights.  Take action today!

SAN FRANCISCO | Fri Dec 17, 2010 5:32pm EST By Dan Levine

SAN FRANCISCO (Reuters) – The states of Arizona and Nevada sued Bank of America Corp on Friday, accusing the largest U.S. bank of routinely misleading consumers about home loan modifications. The two lawsuits, filed by each state attorney general in Arizona and Nevada state courts, seek potentially massive fines against the bank and compensation for customers. Arizona accuses Bank of America of violating a 2009 consent judgment in which it committed to widespread home loan modifications. The bank failed to follow through, leaving borrowers in limbo, according to the suit. The bank is also accused of violating the state’s consumer fraud act.

Arizona is seeking $25,000 per violation of the consent decree, and up to $10,000 for consumer fraud breaches. Both states also ask that Bank of America pay restitution to customers.

The lawsuits could complicate Bank of America’s efforts to quickly resolve inquiries into its mortgage foreclosure practices. The probes include a 50-state investigation that is also looking at JPMorgan Chase & Co, Ally Financial and other major mortgage servicers. Last month Bank of America Chief Executive Brian Moynihan said a quick settlement of the 50-state probe would be the best solution for all involved.

Arizona Attorney General Terry Goddard, who is on the executive committee of the 50-state investigation, recently lost a run for governor in Arizona. Nevada Attorney General Catherine Cortez Masto won reelection this past November. “This was an opportunity for the two states which have felt the biggest impact of the foreclosure crisis to stand up and say, ‘This has got to stop,’” Goddard said in a phone interview.

Bank of America Home Loans spokesman Dan Frahm said the company is disappointed Goddard filed the suit during his last days as attorney general, and that the bank would continue to work with the multi-state process. “That is the approach that will best broaden programs for homeowners who need assistance,” Frahm said in an email. Iowa Attorney General Tom Miller, who heads the multi-state probe, said the legal activity “neither changes, nor dilutes, the strong and resolute multi-state effort to address serious problems that have been identified with a number of mortgage servicers.”

Mortgage servicers have come under fire in recent months for abuses of the foreclosure process. In another foreclosure probe, the U.S. Securities and Exchange Commission sent out a fresh round of subpoenas last week to big banks including Bank of America. Bank of America temporarily halted home repossessions in October as it reviewed its internal processes.  James Tierney, director of the National State Attorneys General Program at Columbia Law School, said it would be difficult for incoming Arizona AG Tom Horne to simply withdraw the lawsuit when he takes office. But if Bank of America cuts a deal with the multi-state investigation, Horne could decide to endorse it and argue against continued litigation. “That’s perfectly fine,” Tierney said. “That’s what AGs do.”

According to Goddard, Bank of America representatives contacted Horne in a bid to head off a lawsuit. Goddard called the outreach “highly inappropriate,” and said Horne took the same position.  Frahm said he was not aware of those interactions, and Horne did not respond to requests for comment. In 2009 Bank of America agreed to a consent judgment over home loans made by its Countrywide unit. The bank committed to loan modifications which it valued at roughly $8.4 billion nationally, the Arizona lawsuit says. The company violated the judgment by failing to make decisions on loan modifications, according to the suit. Bank of America also misled consumers by telling them that their modifications were declined because investors in mortgage-backed securities had not approved them, even though in some cases no such permission was necessary, the lawsuit says. Bank of America shares closed up 5 cents at $12.57 on the New York Stock Exchange.

The case in Superior Court of the State of Arizona, County of Maricopa is State of Arizona v. Countrywide Financial Corporation et al, 2010-033580. The case in District Court for Clark County, Nevada is State of Nevada v. Bank of America Corp. et al, 10-631557. (Reporting by Dan Levine; Editing by Steve Orlofsky, John Wallace and Richard Chang)

 According to the report below the banks have “exhaused” their options – more likely they have place insurance policies against the delinquent homeowners, which will result in the lender/servicer getting a bigger paycheck if the house goes to sale rather than modifying the loan.  Most lenders/servicers are stringing homeowners out for 8-12 months only to be denied the loan modification right before the foreclosure sale.  By this time it is too late for the homeowner to do much else with the property.  San Diego foreclosures will continue to increase.

The homeowners have several options:

1. Short Sale – sell the home
2. Take legal action – join a Class Action Lawsuit against your lender
3. Get a Forensic Loan Audit - then determine which course of action is best for you

Our team of experts can help guide you through this program.  Call today: (619) 631-4546.

By Dave Clarke WASHINGTON | Wed Dec 29, 2010 4:44pm EST

 WASHINGTON (Reuters) – U.S. home foreclosures jumped in the third quarter and banks’ efforts to keep borrowers in their homes dropped as the housing market continues to struggle, U.S. bank regulators said on Wednesday.

 The regulators said one reason for the increase in foreclosures is that banks have “exhausted” options for keeping many delinquent borrowers in their homes through programs such as loan modifications.  Newly-initiated foreclosures increased to 382,000 in the third quarter, a 31.2 percent jump over the previous quarter and a 3.7 percent rise from the same quarter a year ago, the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) said in a quarterly mortgage report.  The number of foreclosures in process increased to 1.2 million, a 4.5 percent increase from the second quarter and a 10.1 percent increase from a year ago, according to the regulators.   They said during a briefing that the numbers could send “mixed signals” about the health of the U.S. housing market.

 Regulators also said a possible reason for the foreclosure uptick in the quarter was that a large pool of borrowers who were being considered for home retention programs but did not qualify moved through the system.

 ”I think you’ll see more stabilization now,” said Bruce Krueger, a mortgage official at the OCC. Foreclosures have become a hot political topic and mortgage servicers have come under fire in recent months amid accusations they did not properly review documents before attempting to take borrowers’ homes.

 These concerns prompted the country’s 50 state attorneys general to coordinate an investigation of lenders such as Bank of America, JPMorgan Chase & Co and Ally Financial’s GMAC unit.

 Some banks, including BofA, temporarily suspended foreclosure proceedings late in the third quarter to review procedures.  Officials from the OCC and OTS declined to say what type of impact this might have on fourth-quarter foreclosure numbers.

 BANKS LOOK OUTSIDE HAMP

 State attorneys general and regulators have been pushing banks to perform more loan modifications and the report shows these efforts have had mixed results.

 Overall home retention actions taken by banks dropped by 17 percent compared to the second quarter, but most of that was due to decreases in the Home Affordable Modification Program (HAMP), the Obama administration’s leading foreclosure prevention effort.  In the third quarter, HAMP loan modifications slid by almost 46 percent, according to the report.

 Regulators said the drop in HAMP modifications is likely due to a few factors, including that a large pool of borrowers who were being considered for the program turned out not to be eligible once their qualifications were fully reviewed. Treasury launched HAMP to try to find a way to reduce mortgage payments for struggling homeowners who wanted to keep their homes but who were at imminent risk of foreclosure.  But it is widely regarded as a flawed program, and the incoming Republican chairman of the House Oversight and Government Reform Committee, Representative Darrell Issa, has called for it to be ended.   Regulators pointed out that mortgage servicers are pursuing more modifications outside of HAMP and such efforts increased by 10 percent in the third quarter.

 The report, which covers 33 million loans serviced by national banks and federally regulated thrifts, shows that the amount of borrowers making their mortgage payments on time remains steady at 87.4 percent.

 The amount of seriously delinquent loans, those 60 days or more past due, dropped 6.4 percent from the second quarter. The amount of loans that were 30 to 59 days past due, however, increased 4.3 percent.

Mortgage Resets 2011

Option Arm mortgages, including what is commonly called “pick a pay” mortgages default rate are predicted to skyrocket in 2011. According to Credit Suisse,  many Option Arm mortgages are to re-cast in 2011, rendering thousands of homeowners with significantly higher mortgage payments.  In San Diego option arm mortgages were common between 2006 and 2007, many now will be facing unaffordable mortgages.   Since most lenders are not acting to modify mortgages, and generally string homeowners along until the foreclosure happens, we are suggesting to take action now, before it re-sets or before you have to default.

Your options are:

1. Forensic Loan Audit (to gather evidence about your loan)
2. Short Sale in San Diego
3. Private Lawsuit (when the fraud is found, and 90% of all mortgages have major fraud in them)
4. Class Action Lawsuit

Take action before it’s too late.  Call us at (760) 512-0438 or (619) 631-4546 to get started.

According to a CNN report, the FBI is looking into potential mortgage fraud and has opened criminal investigation of 14 different lenders relating to the mortgage meltdown. Complaints of mortgage fraud has been filed, but the FBI would not identify the companies. The chief of the FBI economic crimes unit Neil Power, attributed the increase “… greed.”  “On insider trading, we’re looking in some cases at whether executives were aware that the value of their holdings would be going down and the executives traded on that information,” “On accounting fraud, we’re looking at housing developers who may have reported cash reserve accounts to reflect falsely inflated values,” Powers told CNN.

Power and other senior officials said the number of suspicious activity reports they review for potential investigation skyrocketed from 3,000 in fiscal year 2003 to about 35,000 in 2006, to 48,000 in 2007 and up from there exceeding 60,000 in 2008 and more in 2009.

The FBI said it investigates only cases involving losses of $500,000 or more, and last year 56 percent of all cases had losses of more than $1 million.

In light of the recent JP Morgan Chase, Ally Bank, Bank of America and other lender scandals, lender fraud is becoming more apparent.

What went on behind the scenes, including selling the mortgages as mortgage back securities, splitting the mortgage from the Note, and other activity may result in class action and other litigious activities being filed across the nation by homeowners.

According to a recent report between short sales and foreclosures in California – 43% of those sales fit in either the short sale or foreclosure category.  Short sales rose 34% in August.

The number of distress homeowners is not going away, nor is this market, any time soon.  With the recent fraud uncovered by the lender’s part, foreclosing illegally, forging documents, etc we will see a rise in forensic loan audits, class action lawsuits, and homeowners fighting back against the banks.  When banks are not playing fair, forget the loan modification since you will still be in that same contract.  Either get out of the contract with a short sale or fight back through a class action lawsuit or other remedy.  For more information on fighting back call our Oceanside office today.

Nearly one in four home sales a foreclosure

Foreclosure sales down from the first quarter, new data from RealtyTrac
by Lucy Nicholson / REUTERS

A home for sale is seen in Santa Monica, Calif. Nearly one in every four U.S. homes sold in the second quarter was a deeply discounted foreclosed house, RealtyTrac said Thursday.Reuters

NEW YORK — Nearly one in every four U.S. homes sold in the second quarter was a deeply discounted foreclosed house, putting the market on pace to work through distressed properties in about three years, RealtyTrac said.

Banks stepped up foreclosures through the summer and will take over a record 1.2 million homes this year, up from around 1 million last year and about 100,000 in 2005 before the housing bust, according to a forecast from the real estate data company.

Foreclosed homes accounted for 24 percent of all second-quarter sales, at an average price discount of more than 26 percent compared with homes not in the foreclosure process.

“This is the kind of volume of activity that we need to see for the market to heal,” RealtyTrac senior vice president Rick Sharga said in an interview.

“Our projections have been that we will get through the distressed inventory largely by the end of 2013, and these kinds of numbers are on target to get us there,” he said.

The share of foreclosure sales fell from the first quarter when nearly one in three sales was a foreclosed house sold at an average 27 percent discount, RealtyTrac said in the report released on Thursday.

“In a normal market you’re looking at foreclosure sales accounting for low single-digit percentages, probably less than 5 percent of all sales,” said Sharga. For the next few years, “it’s probably going to be somewhere between one-quarter and one-third of all sales.”

Overall housing sales likely will total 4 to 4.5 million a year during this time, he said.

It will take those years to resell homes lost by owners whose jobs or wages were cut or who took out high-risk, unaffordable mortgages. Banks will also need to sell homes from owners who walked away owing more on their mortgage than the house was worth.

Tax credit expires. Julie blogs at
 www.JulieFontaine.com as well.

Unemployment at 9.6 percent, and average home prices that are about 28 percent below 2006 peaks, are keeping the U.S. housing market from staging much of a recovery.

A burst of spring sales to buyers seeking up to $8,000 in tax credits has been followed by a sales plunge after the incentive ended on April 30.

Distressed homes, or ones in foreclosure or short sales, rose to 34 percent of all existing houses sold in August from 32 percent in July and 31 percent a year ago, the National Association of Realtors said last week.

Sales volume rose overall in the second quarter, still boosted by the tax credit.

A total 248,534 properties in some stage of foreclosure — default, scheduled auction or REO — was sold to third parties, up about 5 percent from the first quarter though down 20 percent from the second quarter 2009, according to RealtyTrac.

“Ironically, the higher the percentage of homes that are sold that are distressed properties, and the bigger the number, the quicker we’ll get through this housing downturn,” said Sharga.

Banks sold more than 151,000 homes they owned, up 3 percent from the first quarter but down 28 percent from a year ago. These REOs were 15 percent of total home sales, down from 19 percent in the first quarter and about 29 percent a year ago.

Nevada, Arizona, California, among the biggest boom-and-bust states, had the highest share of foreclosure sales from April to June. About 56 percent of all Nevada sales, 47 percent in Arizona and 43 percent in California were foreclosed homes.

For that reason we are not encouring EVERYONE to have an in depth loan audit done, including a forensic loan audit and a securitization loan audit.  The sercuritization audit is especially revealing, since it traces how your loan may have been put in a mortgage backed security and sold off out in wall street even after the pool was closed.  All kinds of fraud is coming out of the woodwork.

The homeowner has several choices after completing the forensic loan audit, including in San Diego.  One would be to stay in the fraudulent contract and just negotiate a loan modification.  But if someone ripped you off do you still want to do business with them?  We wouldn’t.  You could also use this do to do a Short Sale, and in San Diego this paperwork can be used to facilitate the terms and conditions of the sale, but you will still lose the house and everything you invested in it.  Lastly you can fight for your rights.  One program that we are aware of includes a Class Action Lawsuit, another would be in assisting you to sue your lender. 

Fraud is fraud.  If you found fraud in your loan it is worth using against the lender.  After all it is shown they will stoop to any level to get your house – including forging documents and forging signatures -sometimes even yours!

J.P. Morgan Chase freezes 56,000 foreclosures
By Ariana Eunjung Cha | September 29, 2010
Washington Post

J.P. Morgan Chase issued a freeze on 56,000 foreclosures on Wednesday, acknowledging that some employees may have signed off on documents submitted in support of them without proper review.

Chase spokesman Tom Kelly said the company has requested that the courts not enter judgments in pending matters until the company has had time to re-examine the filings “to verify that the affidavits and other documents meet the standard of personal knowledge or review where that is required.”

“While Chase does not expect find any factual problems and that customers have been harmed, but if we do find any cases we will take appropriate action,” Kelly said.

In May, a Chase employee named Beth Ann Cottrell said in a sworn deposition that she and her team signed off on up to 18,000 foreclosure affidavits and other documents a month without reviewing them thoroughly.

Another mortgage company, Ally Financial–the nation’s fifth largest lender–on Sept. 20 halted evictions and resale of repossessed homes in 23 states. Jeffrey Stephan, a document processor for the company, admitted that he had signed off on 10,000 pieces of foreclosure paperwork a month without reading them.

State attorneys in at least nine states have announced investigations into the matter.

Under HAMP, eligible borrowers can have their monthly payments lowered to 31% of their pre-tax income as long as its more profitable for the bank to modify the loan than to foreclose. Make note of this – while you may qualify if the bank/investor can make more money now by foreclosing, then it won’t matter if you qualify or not – they will just foreclose. The federal government pays servicers an incentive to participate in the program, but these incentives may not be enough.  Also, proprietary bank modifications are outpacing HAMP adjustments by more than 2-to-1. Many troubled homeowners are falling out of the government program and 44.5% of them are receiving bank modifications. Housing counselors have been wary of direct bank modifications, mainly because there is not a lot of information about them. They caution homeowners to make sure they understand the terms of the adjustment. A Chase spokesman said HAMP is always the first program the bank considers for troubled borrowers “because it lowers the payment more than most other programs.” If they don’t qualify for HAMP, they are reviewed for a proprietary modification.

One small new condition that most banks are adding to the remodified mortgage/contract is that the homeowner will agree to waive all rights to legal remedies after the loan modification is signed.  What does that mean?  It means that if the bank has defrauded you in any way such as charging you illegal fees at closing which will cost you thousands of dollars extra over the life of the loan, you have just given up your legal rights to  to rectify that fraud.  Homeowner beware!!!