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Mortgage Scams Exploding Across US as Lawyers Become the Predominant Impetus in Their Creation

orangehousemedia.com | July 21, 2014

There’s an old joke that starts out – what do you have when you have 100 lawyers at the bottom of the sea? Answer: a good start. But not all attorneys are bad or corrupt. In fact, a group called The Lawyers’ Committee for Civil Rights Under Law monitors a hotline called HOPE and according to their analysis, the most costly of these foreclosure rescue scams – and now the most pervasive – involve or are directed by attorneys.

The group found that, disturbingly, nearly 60 percent of all complaint calls to the HOPE hotline involved a lawyer which is up from 40 percent in 2010. Furthermore, the analysis found that the average loss suffered by schemes involving or directed by lawyers was $3,601 – about $800 more than in other types of deceits.

The bottom line is that the exploitation of these schemes are harmed thousands and possibly 10′s of thousands of people attempting to refinance their mortgage under a government-sponsored program like HARP (Home Affordable Refinance Program). A recent fact reported by the California Reinvestment Coalition reported hundreds of banks still making serious foreclosure-related mistakes despite many promises of reform.

Scams Becoming More and More Sophisticated

An ad recently cited in a bulletin by the Federal Trade Commission warning against such offers lawyers plainly said, “We have special relationships with banks that can speed up the approval process.” What this special relationship is and how it speeds things up is never gone into in any detail of course.

Recruiting struggling homeowners to sue banks as a group is another tactic of these phony schemes. The fraudulent attorney claims continue with everything from promising lawsuits will force banks to stop foreclosures and cut loan balances to borrowers being told they could even walk away with the title to their home free and clear. Linda Mullenbach, an attorney at the Lawyers’ Committee advised, “such claims are bogus, run away as fast as you can if approached to participate in such a case.”

FBI Rates Mortgage Fraud Lowest Priority Criminal Threat

It’s often difficult to prove fraud amid the years it takes to wade through untidy and confusing mortgage documentation. “Federal prosecutors recently charged seven people, including one lawyer, with operating a mortgage modification scam outfit on Long Island that cost homeowners $2.3 million.”

According to a Huffington Post article, “such frauds otherwise haven’t attracted much scrutiny from law enforcement officials, who have signaled they have more pressing priorities. The Federal Bureau of Investigation has consistently ranked mortgage fraud as the lowest priority criminal threat, according to a recent report by the Justice Department inspector general.”


Back to July 2014 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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