Last week over lunch I was having a spirited debate with undefeated foreclosure defense lawyer Thomas Willis, about whether
During my lunch with Thomas Willis I pondered, if the homeowner is current on their loan then they are not in danger of foreclosure so why should the foreclosure rescue statue apply to a loan modification if there is no foreclosure issue. Mr. Willis thought that the statute would apply to loan modification. His thought was that loan modification is essentially a loss mitigation program to prevent bank losses. If an wealthy investor with continuing high current income made a bad decision by over paying for a home or not obtaining a competitive mortgage the lender will not modify a profitable loan out of sympathy. Loans are modified when banks believe that modification will prevent a default by the homeowner or when the government creates programs that financially reward lenders to modify loans for certain types of homeowners. Willis saw all loan modification as foreclosure related and argued that all loan modification companies would be prohibited from charging upfront for loan modification services.
The Florida Attorney General sees things the same was as Thomas Willis and by weeks end had filed suit against one loan modification company and had obtained an injunction against the other. Before the week was up the Attorney General posted the following press release about Lincoln Lending, a loan modification company that extensively marketed in
Temporary Injunction Obtained in Foreclosure Rescue Fraud Lawsuit
TALLAHASSEE, FL – Attorney General Bill McCollum today obtained a temporary injunction against
In addition to freezing the company’s assets, the order requires that the company refund any up-front payments made by consumers for foreclosure-related rescue services subsequent to October 1, 2008, the effective date of the law prohibiting up-front charges. These refunds should be completed within 90 days and will be made without the necessity of consumers filing a claim.
The Attorney General's Economic Crimes Division sued Lincoln Lending and Gomez earlier this week for allegedly charging up-front fees for loan modification services in violation of the Foreclosure Rescue Fraud Prevention Act. The Attorney General’s office has received hundreds of complaints regarding this case since the lawsuit was filed. Both parties agreed to this order.
Our firm has a client that went to Lincoln Lending for loan modification prior to retaining our firm to defend a foreclosure action filed against her by the lender. According to the client, when she went to Lincoln Lending she was current on her mortgage but Lincoln told her to stop making payments on her mortgage in order for Lincoln to obtain a loan modification.
My advice to homeowners is to choose carefully when it comes to loan modification. Review the qualifications of the loan modification company and find out if your loan modification will be handled by an attorney or experienced professional of passed off to staffer with no experience or qualification. Ask for references. If you home is already in foreclosure speak to an attorney who is a member of the Florida Bar who is willing to go to Court to protect your home.