Loan Modification Scams

March 16, 2010 12:00:00 AM PDT
The housing collapse created a huge new demand for loan modification services. Some were helping homeowners renegotiate their mortgage interest rates, while others were taking advantage of the most vulnerable. Last may, we investigated a company called Green Credit Solutions. It sold loan modification services for $3,495 dollars through local brokers.

The state bar searched its Southern California offices this past December. Investigators say they uncovered thousands of victims of the loan modification company, bringing in more than $20-million dollars combined.

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California State Bar's Green Credit Customer Complaint Line
(213) 765-1756
.

If your Green Credit paperwork has a Tennessee law firm call Tennessee Board of Professional Responsibility (615) 361-7500 or (800) 486-5714.

Department of Real Estate recovery form www.dre.ca.gov/frm_recovery.html

Load modification help http://portal.hud.gov/portal/page/portal/HUD/states/california
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Maria Anaya is lucky to still be living in her Madera home. She paid green credit solutions $3,495 dollars to modify her mortgage.

"They stopped my foreclosure on my home and they said in another 21 days you'll hear from us and we should be almost done and after that I never heard from them no more," said Anaya.

Green Credit Solutions is accused of being paid and doing nothing by hundreds, if not thousands of others like Maria.

The department of real estate gave the company's officers a cease and desist order in June 2009 about a month after the Action News investigation into the company aired. As a result, green credit's officers voluntarily surrendered their real estate licenses in the last month.

In late December, the State Bar searched its offices in Irvine, saying the company did nothing to help clients while also misleading them to believe that services would be performed or supervised by an attorney.

"Green Credit Solutions had a loose affiliation with a few lawyers. Never really had a lawyer on staff handling the loan modifications. And the one lawyer they did hire to work with them was a suspended Tennessee attorney," said state bar investigator John Noonen.

The 6,000 plus Green Credit customers came from sales people, called brokers, all across California; including San Joaquin Real Estate and Financial Services in Clovis.

"You don't take any money?"

"No, we don't do that," said a San Joaquin Real Estate and Financial Services employee.

"You don't take any money at all?"

"We collect money for Green Credit. If you're recording I don't want to do that."

"You don't want to do any of it?"

"I don't."

This is how the Action News interview started last may with an employee at San Joaquin Real Estate. Workers collected the personal information from at least 650 clients and sent it to Green Credit in Southern California. San Joaquin Real Estate was paid between $1,500 to $2,000 dollars per client. That's more than a million dollars since they started in August 2008.

Less than a year later this is what the owner, Irma Machado is dealing with.

"Probably cleaning up after Green Credit is probably going to take me a good year, year and a half. I don't know."

Irma believes about six of her clients lost their homes because of Green Credit. She's also been sued by three of her clients in Fresno County Small Claims Court losing two of the cases in the past month.

Another local broker called AAA Mortgage used to be here, but closed early last year. It had about 162 clients with Green Credit. Only 34 files had been modified by the time this story aired last May.

Maria Anaya said, "I trusted them and I said you know I go I'm going to trust you and they said to trust them and this is what happened. I lost $3,500 dollars that I didn't have. You know that hurt.

The mortgage crisis was costly for many people in the Valley. Some just paid a higher price.

The State Bar is collecting the files from Green Credit and seized its assets.

The State Bar does not have the authority for criminal charges but can forward the results of any investigation to the proper jurisdiction for prosecution. Action News talked with the Fresno County District Attorney's Office. They would not comment on the case specifically but say they are following the State Bar and Department of Real Estate investigations.

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