Five Mortgage Brokers In San Diego Submitted False Applications, Bank Statements, And Income Documentation To Defraud Mortgage Lenders

25 11 2008

“…submitting false loan applications, false bank statements, and false income documentation. In total, the victim lenders funded more than $16 million in loans on properties that have been foreclosed or are in the foreclosure process. These fraudulent loans resulted in actual losses to the victim lenders ..”

“…CFS did not fund loans but received commissions from the lenders when the loans closed. The five individuals were loan officers at CFS; in addition to the commissions, they often received kickback payments when loans closed…”

 http://www.imperialvalleynews.com/index.php?option=com_content&task=view&id=3384&Itemid=2

San Diego, California – United States Attorney Karen P. Hewitt announced that Rafael Santiago and Angel Armendariz pled guilty in federal court in San Diego to conspiring to commit wire fraud. On November 13, 2008, co-defendants Abner Betech, Said Betech, and Aviva Betech pled guilty to conspiring to commit wire fraud as well. These five individuals entered their guilty pleas before United States District Judge Thomas J. Whelan.

According to court documents, Rafael Santiago, Abner Betech, Said Betech, Aviva Betech, and Angel Armendariz admitted to devising a plan to defraud and to obtain money and property by false and fraudulent means, related to mortgage fraud. In 2005, Abner Betech, Said Betech and others founded Creative Financial Solutions, Inc. (“CFS”), a mortgage brokering company formerly located at 707 Broadway Avenue, Suite 1720, San Diego. CFS was in the business of sending loan application packages and other documents to lenders for review and funding. CFS did not fund loans but received commissions from the lenders when the loans closed. The five individuals were loan officers at CFS; in addition to the commissions, they often received kickback payments when loans closed.

These five individuals admitted that CFS obtained mortgage loans for unqualified borrowers by, among other things, submitting false loan applications, false bank statements, and false income documentation. In total, the victim lenders funded more than $16 million in loans on properties that have been foreclosed or are in the foreclosure process. These fraudulent loans resulted in actual losses to the victim lenders including the following: unrecovered loan proceeds, unpaid mortgage payments, the costs of recovering the properties through foreclosure, the costs of maintaining the recovered properties, and the costs of selling the properties after they had been foreclosed.

The sentencing for Rafael Santiago, Abner Betech, Said Betech, and Aviva Betech is scheduled for April 13, 2009, and sentencing for Angel Armendariz is scheduled for April 20, 2009. A sixth defendant, Lucette Montane, remains at large.





Claim That Subprime Loans Expanded Homeownership A “Fraud” As They Were Designed to “Fail”

24 11 2008

“…Carr, of the National Community Reinvestment Coalition, said that in hindsight the claim that subprime loans expanded homeownership was “a fraud.” Subprime loans, with their low teaser rates and expensive prepayment penalties, were “designed to fail.”

“…(in) Orange County, where subprime lending giants New Century, Fremont, Option One and Argent all were based. Subprime accounted for less than 10 percent of all home loans made in the county between 2004 and 2007. But in central Santa Ana – today the county’s foreclosure hotspot – the subprime share topped 40 percent…”

http://www.ocregister.com/articles/subprime-percent-home-2233845-lending-loans

For a few delirious years, subprime mortgages brought fat profits to Orange County lenders – plus Mercedes, Beemers and the occasional Lamborghini for their salespeople.

Subprime loans left a more lasting impact elsewhere, in places like Fresno and Moreno Valley, Florida and Michigan – areas now suffering from massive foreclosures.

A Register analysis shows that subprime loans were concentrated in the less prosperous, less stable corners of the nation. The Register studied 43 million prime and 12 million subprime loans made between 2004 and 2007.

The analysis shows how subprime loans evolved from a niche product, largely confined to Texas and the Deep South, into a nationwide phenomenon. But even as subprime went national, it played a much bigger role in some housing markets than in others. (Click here to see maps of both California and U.S. from 2004-2007).

Consider two cities: During the height of the bull market, residents of New York City got just 3 percent of their home loan money from subprime mortgages. In hard-pressed Detroit the figure was 31 percent.

Now look home, to Orange County, where subprime lending giants New Century, Fremont, Option One and Argent all were based. Subprime accounted for less than 10 percent of all home loans made in the county between 2004 and 2007. But in central Santa Ana – today the county’s foreclosure hotspot – the subprime share topped 40 percent.

A series of maps shows subprime lending spreading year by year from the South to California to the Midwest and Northeast.

The maps are “like you’re looking at X-rays of a cancer patient,” said Jim Carr, chief operating officer of the National Community Reinvestment Coalition, a nonprofit that promotes lending to low-income areas. “(2004) and ’05 is when it went viral.”

Subprime lending mushroomed from less than 10 percent of national home loan volume in 2004 to 20 percent in 2005 and 24 percent in 2006. In 2007 as major lenders failed, subprime fell to 15 percent of national home loan volume.

Subprime’s sudden collapse gave counties that depended on subprime loans a bitter foretaste of the credit crunch. While total home loan volume dropped 21 percent nationwide in 2007, it slumped by 43 percent in Riverside and San Bernardino counties. The crunch was even sharper in parts of the San Joaquin Valley: Home lending dropped 50 percent in San Joaquin and 55 percent in Merced.

Easy credit helped the valley prosper in the first half of the decade. Its urban centers grew twice as fast as the state did. Cotton fields and vineyards gave way to new homes from Bakersfield north to Stockton.

“The subprime lending practices definitely lent fuel to the economy,” said John Mahoney, director of the Real Estate & Land Use Institute at Cal State Fresno. “That single element alone is what expanded this market to unsustainable levels.”

Mahoney has studied the new home market in Fresno for years. Between 2004 and 2006, he said, the number of new housing units produced each year doubled. The median price also doubled.

Easy money was “the primary component that fueled the overbuilding, the overpricing,” Mahoney said. It was “a marketing cycle that fed on itself.”

It couldn’t last. In 2007 home lending volume in Fresno County slumped 37 percent, builders stopped building and the first foreclosure signs appeared.

Mark Boud, an Irvine real estate economist, has studied the valley market. Between February and August, he said, there were 4,133 foreclosures in Fresno and neighboring Madera County – four times more than in the same period in 2007 and 30 times the 2006 number.

Subprime is a big factor in foreclosures, Boud said. He blamed “loose lending standards,” particularly in the new-home market, for the surge in foreclosures.

Carr, of the National Community Reinvestment Coalition, said that in hindsight the claim that subprime loans expanded homeownership was “a fraud.” Subprime loans, with their low teaser rates and expensive prepayment penalties, were “designed to fail.”

Carr looks at the maps showing the spread of subprime year by year and sees a lost chance for regulators.

“As late as 2004 we could have prevented this foreclosure crisis,” Carr said. “They had an oportunity to tighten down on financial institutions whose lending behavior was clear as early as 2002-2003. It was a missed opportunity to get this problem under control.”





New York Mortgage Brokers Use “Straw Buyers” And Fraudulent Income To Defraud Lenders And Fund Cocaine Distribution Ring

21 11 2008

“…Three of the defendants charged with mortgage fraud were also indicted for participation in a cocaine distribution ring, says a spokesman for the U.S. Attorney for the Eastern District of New York…”

“…the men would trick homeowners who were in danger of defaulting on their mortgages into signing over their property titles to Home Cash or Property Cash, after promising the victims they could prevent their homes from being foreclosed upon, prosecutors say…”

“…Once the properties were bought by the straw buyers they were often re-sold to another straw buyer who had also taken out fraudulent mortgage loans. The properties were then re-sold at inflated prices. The higher the price of the property, the higher the value of the loan straw buyers would ask lenders for, prosecutors say. ..”

http://www.longislandpress.com/articles/news/570/ 

Sixteen people were charged in a grand jury indictment that was unsealed on Nov. 19 with bilking mortgage lenders out of more than $13 million dollars in loans in connection with approximately 28 Long Island properties, according to federal prosecutors. Three of the defendants charged with mortgage fraud were also indicted for participation in a cocaine distribution ring, says a spokesman for the U.S. Attorney for the Eastern District of New York.

Immigration and Customs Enforcement investigators, along with members of the Organized Crime Drug Enforcement Task Force, uncovered the two separate fraud schemes and the drug ring. The complex scams involved mortgage brokers, real estate appraisers, loan processors, and a bank employee, Gloria Espenas, the former vice president of a JP Morgan Chase branch in Nassau County.

In the first alleged scheme, Robert Guerrero, owner of Property Cash in Greenlawn, and Gary Jacques, owner of Home Cash in Huntington Station, used their companies to purchase Long Island real estate. In some cases, the men would trick homeowners who were in danger of defaulting on their mortgages into signing over their property titles to Home Cash or Property Cash, after promising the victims they could prevent their homes from being foreclosed upon, prosecutors say.
 
In other cases, the men allegedly utilized straw buyers, or stand-in buyers with good credit to secure mortgage loans for properties that Guerrero and Jacques said they could not obtain by themselves. The loans for the properties―located in towns including Huntington, Huntington Station, Greenlawn, Bayshore and Uniondale―that were secured by “fraudulently overstating,” the straw buyers’ financial condition, authorities say.  Sometimes Guerrero or Jacques would deposit checks into the straw buyer’s bank accounts or tell the mortgage lender that the buyer worked for Home Cash or Property Cash and had a high salary, to give the impression that the buyer was financially sound, according to court documents.

Once the properties were bought by the straw buyers they were often re-sold to another straw buyer who had also taken out fraudulent mortgage loans. The properties were then re-sold at inflated prices. The higher the price of the property, the higher the value of the loan straw buyers would ask lenders for, prosecutors say. In this first scheme lenders were defrauded out of nearly $9 million in mortgage loans in connection with approximately nineteen different properties.

Allegedly complicit in the scheme is Michael McEnroe, who served as a
loan processor and mortgage broker for many of the fraudulent mortgage applications. Also involved was real estate appraisers Lawrence Albers and Al Cassiano, Jr., who inflated the value of properties, so as to deceive lenders into thinking they would have a valuable home as collateral if the buyers could not pay back the loan.

Three of the men charged for fraud in the first mortgage loan scheme were also charged with distributing and conspiring to distribute more than five kilograms of cocaine. Gary Jacques is charged with separate offenses involving the importation of more than 500 grams of cocaine into the U.S.

In the second scheme uncovered in the same investigation, Michael McEnroe and Ryan Gosin, who control the Able Group, Able Funding and Able Development, and Walmart Construction located in East Meadow and Baldwin at different times. The men allegedly used the companies to fraudulently acquire mortgage loans for LI property. The men also utilized straw buyers to acquire mortgage loans for property in Merrick, East Islip and Valley Stream.

Sometimes McEnroe and Gosin would pay the straw buyer between $5,000 and $10,000 for their participation. They also told the buyers they would make all mortgage payments on their behalf. Once the straw buyer agreed to buy the property they would provide McEnroe or Gosin with their personal information, such as their social security number and their date of birth to be used on the fraudulent loan application.

Espenas, the former JP Morgan Chase branch vice president, allegedly signed and provided fraudulent verification of deposit forms in which she overstated the value of the straw buyers’ assets on deposit at the bank, so their loan would be approved.

In this second scheme, lenders were defrauded of nearly $5 million in mortgage loans in connection with approximately nine different properties. Several of the properties in both schemes are now in foreclosure.

If convicted, the defendants face a maximum sentence of 30 years in prison on each count of bank fraud or conspiracy to commit bank fraud, 20 years for each count of wire fraud, money laundering, and conspiracy to commit wire fraud or money laundering. They also face 10 years in prison on the count of stealing government funds and up to life in prison on each count of trafficking in more than five kilograms of cocaine. Gary Jacques also faces up to 40 years in prison on each count relating to the importation of cocaine into the United States.
 





Missouri Mortgage Brokers Defraud Lenders Through “Down Payment Kickback” Scheme

21 11 2008

“…Investigators believe Davis, Spencer and Moore were involved in a scheme to defraud home mortgage lenders from January 2006 through February 2007. Davis and Spencer solicited persons to buy homes with the understanding that they would return a significant portion of the purchase price of the home to the purchaser afterward….”

“…prepared loan applications, investigators say, on behalf of the prospective purchasers that contained material false statements, and submitted those applications to lenders outside Missouri. Davis did not disclose to the lenders that a significant portion of the home’s purchase price would be returned to the purchaser…”

http://www.ky3.com/news/local/34838834.html

 Several mortgage brokers are among six area residents indicted by a federal grand jury on Thursday for participating in several related mortgage fraud schemes in Christian and Greene counties.

Charles Davis, 34, of Rogersville; Cheryl Kassebaum, 42, and her husband, Scott Kassebaum, 42, of Ozark; Randall Hall, 59, and Shanda Moore, 44, both of Springfield; and Steven Spencer, 47, of Carl Junction are charged in a 55-count indictment.

Davis, a former mortgage broker, was the owner of Master Marketing Consultants. The Kassebaums, former mortgage brokers, were owners of Metro Consulting Group. Hall is a former mortgage broker.

Investigators believe Davis, Spencer and Moore were involved in a scheme to defraud home mortgage lenders from January 2006 through February 2007. Davis and Spencer solicited persons to buy homes with the understanding that they would return a significant portion of the purchase price of the home to the purchaser afterward.

Davis then prepared loan applications, investigators say, on behalf of the prospective purchasers that contained material false statements, and submitted those applications to lenders outside Missouri. Davis did not disclose to the lenders that a significant portion of the home’s purchase price would be returned to the purchaser.

Moore’s role in the conspiracy was to verify the false income and employment information contained in the fraudulent loan applications.

This scheme involved 13 houses, according to the indictment, with home mortgage loans ranging from approximately $200,000 to $500,000. The amount of loan proceeds returned to the borrowers ranged from less than $30,000 to more than $100,000.

Some of the home purchasers defaulted on the loans, and the homes have been foreclosed or are in the process of being foreclosed.

In addition to the conspiracy, Davis is charged with 13 counts of wire fraud and Spencer with six counts of wire fraud related to the transfer of loan proceeds in this scheme.

Davis is also charged with 13 counts of engaging in monetary transactions in criminally derived property and Spencer with six counts of engaging in monetary transactions in criminally derived property. Those counts relate to the transfers of funds back to the borrowers in this scheme.

The indictment also charges that Davis and the Kassebaums were involved in a similar mortgage fraud conspiracy from March to July 2006. This scheme involved seven houses, according to the indictment, with home mortgage loans ranging from approximately $200,000 to more than $400,000.

The amount of loan proceeds returned to the borrowers ranged from less than $30,000 to nearly $100,000. Some of the home purchasers subsequently defaulted on the loans, and the homes have been foreclosed or are in the process of being foreclosed.

In addition to the conspiracy, Davis and Cheryl Kassebaum are charged with seven counts of wire fraud and Scott Kassebaum with two counts of wire fraud related to the transfer of loan proceeds in this scheme.

Davis and Cheryl Kassebaum are also charged with seven counts of engaging in monetary transactions in criminally derived property and Scott Kassebaum with two counts of engaging in monetary transactions in criminally derived property related to the transfers of funds back to the borrowers in this scheme.

The indictment charges that Hall and Spencer were involved in a similar mortgage fraud conspiracy from November 2005 to October 2006. This scheme involved nine houses, according to the indictment, with home mortgage loans ranging from less than $300,000 to more than $750,000.

The amount of loan proceeds returned to the borrowers ranged from$15,000 to more than $141,000. Some of the home purchasers subsequently defaulted on the loans, and the homes have been foreclosed or are in the process of being foreclosed.

In addition to the conspiracy, Hall and Spencer are charged with nine counts of wire fraud related to the transfer of loan proceeds in this scheme. Hall and Spencer are also charged with three counts of engaging in monetary transactions in criminally derived property related to the transfers of funds back to the borrowers in this scheme





Senator Christopher Dodd (Connecticut) Received “Special Treatment” From Mortgage Industry He Now Aims To Reform

20 11 2008

“…Dodd gallops the gamut from calling the allegations of special treatment “outrageous” to pledging repeatedly and specifically to release documents related to the $800,000 in sweetheart deals he got from Countrywide…”

“…Dodd, however, signed some but not all of his loan documents himself. Agents of Countrywide signed his $275,042 Connecticut mortgage. His previous mortgage with Countrywide was paid off but the new mortgage did not appear on the local land records for an astonishing 16 months. For nearly a year and a half, Countrywide failed (or declined) to secure its interest in Dodd’s home by taking the ordinary and essential step of presenting the documents to the local town clerk and recording them in the land records….”

“…Dodd refuses to say whether his Senate campaign committee’s payments of $60,000 last summer to a Washington law firm, which has a history of representing Democratic senators in trouble, were for his defense in the Senate ethics investigation of his dealings with Countrywide…”

http://www.courant.com/news/opinion/editorials/hc-rennie1109.artnov09,0,7916474,print.column 

As the Democrats moved toward victory at the end of October, a story by NBC’s Lisa Myers set Dodd apart from his triumphant fellow Democrats. Myers reported that federal agents are investigating the notorious “Friends of Angelo” list maintained by subprime mortgage giant Countrywide Financial’s co-founder Angelo Mozilo. Dodd was the most prominent member of that exclusive club.

Since the Dodd story broke in June, the five-term senator has offered contradictory fragments of explanations and intentions. Scheherazade after a six-pack of Red Bull would not have told more desperate tales. Dodd gallops the gamut from calling the allegations of special treatment “outrageous” to pledging repeatedly and specifically to release documents related to the $800,000 in sweetheart deals he got from Countrywide.

Still claiming “there’s nothing there,” Dodd refuses to say whether his Senate campaign committee’s payments of $60,000 last summer to a Washington law firm, which has a history of representing Democratic senators in trouble, were for his defense in the Senate ethics investigation of his dealings with Countrywide. He suggested, before he fled to his third home in Ireland in August, that Countrywide was not cooperating in providing information.

Dodd still claims there was nothing unusual about the $800,000 in mortgages he got from Countrywide in 2003, but records refute that, too. Documents indicate that Dodd was getting a mortgage of $276,150 on his second home in Connecticut on July 3, 2003. The amount was reduced to $275,042 and the mortgage he was refinancing was paid off.

Dodd and his wife also got a home equity loan on their Connecticut property in East Haddam from Countrywide that day. But the course those loans took was very strange. The standard routine is for the homeowner to sign the loan documents, the borrowed money is sent to the lender being paid off and the new mortgage is recorded on local land records within a few days.

Dodd, however, signed some but not all of his loan documents himself. Agents of Countrywide signed his $275,042 Connecticut mortgage. His previous mortgage with Countrywide was paid off but the new mortgage did not appear on the local land records for an astonishing 16 months. For nearly a year and a half, Countrywide failed (or declined) to secure its interest in Dodd’s home by taking the ordinary and essential step of presenting the documents to the local town clerk and recording them in the land records.

This is exceedingly rare in the mortgage business. No wonder Dodd refuses to lift the veil on his deals with the generous lender that went bust this year.

Last month, amid tumbling approval ratings, renewed questions and scorching editorials in The Wall Street Journal and the usually friendly New York Times, Dodd unveiled a new tablet of nonsense. He announced that for the previous five months he’d really meant to say that he wouldn’t release any documents until the Senate Ethics Committee completes its investigation. The senator is terribly disappointed that the investigation has taken this long. He left out that nothing in the committee’s rules precludes him from releasing the documents to the public.

A July statement from the committee, however, may explain why it hasn’t confirmed Dodd’s contention that there’s “nothing there.” It announced: “Absent special circumstances, it has been the long-standing policy of the committee to defer investigation into matters where there is an active and ongoing criminal investigation and proceeding so as not to interfere in that process.” Clever Lisa Myers’ story of federal law enforcement’s investigation of the “Friends of Angelo” may explain the delay.

This is not the sort of story jubilant Democrats want unraveling around one of their prominent senators. It interrupts the narrative of changing the world. Dodd may learn that President-elect Barack Obama’s righteous wind, having dispatched so many Republicans, can cut down a Democrat who is not so nimble in explaining himself.





“Mortgage Fraud”: Husband And Wife Are “Bonnie and Clyde” Of Mortgage Fraud In Las Vegas

19 11 2008

  “…Mazzarella and Grimm were the Bonnie and Clyde of mortgage fraud — among the greediest of a band of swindlers who took advantage of lax lending standards at profit- hungry banks, which stopped verifying income and assets for even questionable borrowers…”

“…They told the straw buyers they would pay the mortgages. Then they skimmed thousands of dollars from each of more than 432 transactions, the indictment says, stashing the cash in 80 bank accounts…”

http://www.bloomberg.com/news/marketsmag/mm_1208_trim2.html

Eve Mazzarella was a Las Vegas success story. The high-school dropout and former housemaid moved to the Nevada city in 2000 from Seattle, got a certificate from the ABC Real Estate School and started selling houses in what would become the hottest market in the country.

In 2006, Mazzarella recorded sales of $13.8 million and made the National Association of Realtors’ “30 Under 30” list, which names the best young agents in the nation. Mazzarella started her own company, Distinctive Real Estate & Investments Inc., in December 2003. She whipped around town in a Mercedes-Benz sport utility vehicle. She planned to build a three-story office building in Vegas’s shabby downtown north of the Strip and preserve a historic house on the site by lifting it onto the roof.

Her competitors were impressed. “She was an up and comer with a brilliant future,” says Forrest Barbee, a broker at Prudential Americana Group, a Las Vegas agency where Mazzarella once worked.

The dream ended at about 5 a.m. on March 13, when federal agents smashed through the door of a stucco home on a quiet, grassy cul-de-sac looking for Mazzarella, 31, and her husband, Steven Grimm, 45, an erstwhile mortgage broker.

The day before, the U.S. Attorney for Nevada had indicted the couple on 6 counts of bank fraud, later revised to 13. Prosecutors say the pair recruited fake — or “straw” — buyers to apply for loans to purchase 227 properties worth $107 million. They told the straw buyers they would pay the mortgages. Then they skimmed thousands of dollars from each of more than 432 transactions, the indictment says, stashing the cash in 80 bank accounts.

Bonnie and Clyde

They allegedly arranged fake sales on some houses five times. Then, according to the indictment, they walked away from the mortgages, leaving lenders in the lurch.

If prosecutors are right, Mazzarella and Grimm were the Bonnie and Clyde of mortgage fraud — among the greediest of a band of swindlers who took advantage of lax lending standards at profit- hungry banks, which stopped verifying income and assets for even questionable borrowers. Buyers who gave false information to mortgage lenders are technically guilty of fraud themselves. Yet authorities are mostly targeting schemes such as the one allegedly perpetrated by Mazzarella and Grimm.

What happened in Vegas didn’t stay in Vegas. Similar schemes across the country helped pump up a housing bubble whose rupture has triggered a global banking crisis, prompted government intervention not seen since the Depression and helped precipitate what economists predict will be a long and painful recession.

Plea: Not Guilty

Mazzarella and Grimm have pleaded not guilty to conspiracy and bank fraud in Nevada federal court in Las Vegas. They couldn’t be reached for comment on this story. Mazzarella’s attorney declined to comment; Grimm’s didn’t return phone calls.

Mazzarella’s father, a real estate lawyer in San Diego, says his daughter is innocent. “She was putting money in Las Vegas real estate like everyone else,” Mark Mazzarella says. “The targets are going to be higher up the food chain.”

Mazzarella and Grimm’s alleged scheme was just one of many in Las Vegas, where, throughout much of this decade, people wagered on houses like they were numbers on a roulette wheel. The advent of no-document “liar loans” fueled the frenzy, as maids, parking attendants and casino workers borrowed big to roll the dice on subdivisions rising amid the mesquite.

Like the city’s replicas of Venice’s canals and New York’s skyline, Las Vegas real estate became a caricature, rising faster and booming bigger than in the rest of the nation.





Beware New Fraud From “Foreclosure Consultants” Who Collect Fees Illegally And Don’t Perform

19 11 2008

“…the seven companies collected upfront fees and then failed to negotiate or perform any services on behalf of the homeowners, leaving them at risk of losing their homes…”

“…the company promised a “money-back guarentee (sic)” on its web site and that it has a 97 percent success rate and a “combined 25 years of real estate, financial and lending experience.” By this evening it had removed the misspelled “guarentee.”

http://www.rrstar.com/news/x1720658976/Attorney-general-sues-Rockford-company-for-mortgage-fraud 

A mortgage-rescue company with a Rockford office was one of seven sued by Illinois Attorney General Lisa Madigan today.

Madigan’s office filed the lawsuit in Winnebago County Circuit Court against StopMyForeclosure.net, which appears to have a location on the 3900 block of Abbotsford Road, for violating the state’s Illinois Mortgage Rescue Fraud Act. The act prohibits companies from requiring payment from consumers before completing all terms of a rescue contract.

Madigan claims the seven companies collected upfront fees and then failed to negotiate or perform any services on behalf of the homeowners, leaving them at risk of losing their homes.

A record wave of foreclosures locally and nationally have pushed the economy to the brink of recession. As foreclosure actions have increased, so have the number of companies promising help to homeowners behind on payments.

Madigan has sued 22 companies, including those sued today, so far this year for violating the state mortgage rescue fraud act.

“There are so many of these companies, and most have no idea that the state has a law that restricts what they do,” said Bob Campbell, executive director of the Rockford Affordable Housing Coalition, a U.S. Housing and Urban Development-certified housing-assistance organization. “Since they don’t know that the law is in place, most of these for-profit companies end up violating the law.”

Early today, the company promised a “money-back guarentee (sic)” on its web site and that it has a 97 percent success rate and a “combined 25 years of real estate, financial and lending experience.” By this evening it had removed the misspelled “guarentee.”

The site also displays two seals of approval by the Better Business Bureau.

Dennis Horton, executive director of the Rockford office of the Better Business Bureau, said he believed both BBB symbols are pirated.

“This company is not registered with the BBB anywhere in the United States,” Horton said.

Rhonda Poshka, who said she is owner of the Queen Oak, Ariz.-based company, said the company is registered with the Arizona Better Business Bureau but not accredited.








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