Prevent Loan Scams
States

California

 



Help for Distressed Homeowners in California

 

The following is a list of legal service providers throughout California that assist homeowners with foreclosure/loan modification needs and/or mortgage scams.

   

Statewide

California Indian Legal Services

Assistance:     Foreclosure to all Native Americans living in California and other Residents of select Counties
Location: Escondido, Bishop, Eureka, and Sacramento
Website: http://www.calindian.org/
Phone: Escondido: (760) 746-8941 or (800) 743-8941
Bishop: (760) 873-3581 or (800) 736-3582
Eureka: (707) 443-8397 or (800) 347-2402
Sacramento: (916) 978-0960 or (800) 829-0284
Services:

The various offices provides free and low-cost legal services to Native Americans and Native American tribes and residents of the Counties of Alpine, Inyo, Kern, Mono, Tuolumne, Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, Ventura, Del Norte, Humboldt, Lassen, Modoc, Shasta, Siskiyou, Trinity , Alameda, Amador, Butte, Calaveras, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Kings, Lake, Madera, Marin, Mariposa, Mendocino, Merced, Monterey, Napa, Nevada, Placer, Plumas, Sacramento, San Benito, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Clara, Santa Cruz, Sierra, Solano, Sonoma, Stanislaus, Sutter, Tehama, Tulare, Yolo, Yuba.


California Rural Legal Assistance (CRLA)

Assistance:     Foreclosure and Loan Modification Scams for California Residents in Rural Areas in English and Spanish
Location: Coachella, Delano, El Centro,  Fresno, Gilroy, Lamont, Madera, Marysville, Modesto, Monterey, Oceanside, Oxnard, Paso Robles, Salinas, San Luis Obispo, Santa Barbara, Santa Cruz, Santa Maria, Santa Rosa, Stockton, Watsonville
Website: http://www.crla.org/
Phone: To find the contact information for the office closest to you, please visit http://www.crla.org/index.php?page=office-locations-amp-staff
Services:

CRLA provides free legal services to low-income residents in various rural counties. The organization assists with foreclosure and loan modification scam issues.  In particular, CRLA operates free foreclosure intervention workshops out of the Marysville office.  Please note that the offices can differ in the services they provide and the service areas in which they practice.  Contact your local CRLA office for more information about services available in your area.


Housing and Economic Rights Advocates (HERA)

Assistance:     Foreclosure and Loan Modification Scams in English, Spanish, and French
Location: Oakland
Website: http://www.heraca.org/
Phone: (510) 271-8443
Email: inquiries@heraca.org
Services:

HERA focuses on the needs of vulnerable populations, including lower-income people, the elderly, immigrants, people of color, and people with disabilities.  Its core practice areas include unfair mortgage lending, foreclosure prevention and fair housing.  Direct legal representation services are available primarily in Northern California, while legal advice and referrals are available statewide.


Legal Services of Northern California - Senior Legal Hotline (SLH)

Assistance:     Foreclosure and Loan Modification Scams to California Residents Age 60 and Older in English, Farsi, Hmong, Hebrew, Punjabi and Spanish. Assistance in additional languages is also offered when possible.
Location: Sacramento
Website: http://www.seniorlegalhotline.org/
Phone: (800) 222-1753 or (916) 551-2140
M-F 9:00 a.m. - 12:00 p.m. and 1:00 p.m. - 4:00 p.m.
Th 9:00 a.m. - 12:00 p.m. and 1:00 p.m. - 7:00 p.m.
Services:

SLH offers free legal advice by phone on any subject to California residents age 60 and over. Written materials and some additional advocacy may be provided, and clients who need more extensive assistance are referred to an appropriate legal services program, or other source.  A mediation program can help resolve some disputes.  Depending on call volume, callers during those hours may receive immediate service or get in queue for a same-day callback. Callback appointments may also be made. Seniors can also submit questions to the website and receive a phone appointment with a SLH advocate.

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Central California

Central California Legal Services, Inc.

Assistance:     Foreclosure and Loan Scams in English, Spanish, Khmer, Laotian, Hmong
Location: Offices in Fresno, Merced, and Visalia
Website: www.centralcallegal.org
Phone: Fresno (559) 570-1200 or (800) 675-8001
Merced (209) 723-5466 or (800) 464-3111
Visalia (559) 733-8770 or (800) 350-3654
Email: fresno@centralcallegal.org
Services:

Central California Legal Services provides free legal assistance to low-income families and individuals in the Counties of Fresno, Kings, Mariposa, Merced, Tulare, and Tuolumne.  The attorneys provide services related to foreclosure prevention and consumer issues.


Council on Aging Silicon Valley

Assistance:     Foreclosure and Loan Scams
Location: Santa Clara County
Website: www.coasiliconvalley.com/site/
Phone: (408) 296-8290
Services:

The Council's Fair Lending Project for Seniors provides legal and social work services to seniors seeking to protect themselves against harmful mortgage lending practices.  The Project also gives outreach presentations covering a wide range of issues, including predatory lending, smart refinancing, reverse mortgage alternatives, foreclosure prevention, and how to spot a loan modification scam.  Seniors wanting more information should call the phone number above.


Greater Bakersfield Legal Assistance, Inc. (GBLA)

Assistance:     Foreclosure and Loan Scams in English and Spanish
Location: Bakersfield
Website: www.gbla.org
Phone: (661) 325-5943 or (888) 292-GBLA
Email: gbla@lightspeed.net
Services:

GBLA is a non-profit legal services program providing free legal assistance in civil matters to low-income and seniors residing in Kern County.  The organization handles foreclosure and consumer issues, including unfair and unjust business practices for low-income consumers.

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Northern California

Asian Law Alliance (ALA)

Assistance:     Foreclosure Prevention in English, Mandarin, Cantonese, Korean, Tagalog, Vietnamese, and Spanish
Location: San Jose
Website: www.asianlawalliance.org
Phone: (408) 287-9710
Services: ALA provides self-help materials, legal counseling, and legal representation focusing on the Asian and Pacific Islander communities of Santa Clara County.   There are no income guidelines for legal consultations, but there are income limits for legal representation cases.  Clients must be 50% or below San Jose Median Income.  Representation cases include housing matters.


Bay Area Legal Aid

Assistance:     Foreclosure
Location: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, and Santa Clara Counties
Website: www.baylegal.org/client-services/housing-preservation/
Services:

Housing attorneys offer assistance to low-income Bay Area residents on housing matters including foreclosures.  Individuals experiencing a housing problem should call the Legal Advice Line that is within their area code. For the Legal Asdvice Hotlines, click here: http://www.baylegal.org/client-services/housing-preservation/legal-advice-hotline.


Community Legal Services of East Palo Alto

Assistance:     Foreclosure and Loan Scams in English and Spanish
Location: East Palo Alto
Website: http://www.clsepa.org
Phone: (650) 326-6440
Email: info@clsepa.org
Services:

CLSEPA provides legal assistance to low-income individuals and families in East Palo Alto and surrounding communities.  The organization’s Anti-Predatory Lending Initiative protects against predatory lending, loan modification scams, unlawful detainers, and other post-foreclosure issues.  To schedule an appointment, homeowners can call or email the office.


Law Foundation of Silicon Valley - Fair Housing Law Project

Assistance:     Foreclosure and Loan Scams in Spanish, Mandarin, Cantonese, Vietnamese, and Spanish
Website: http://www.lawfoundation.org/
Phone: (408) 293-4790
Services:

The Law Foundation provides free legal services to Silicon Valley individuals in need.  There is no income restriction and citizenship is not required.  The Fair Housing Project's four attorneys offer assistance on predatory lending and related loan modification scam matters.


Legal Aid of Marin

Assistance:     Foreclosure Prevention in English and Spanish
Location: San Rafael
Website: www.legalaidmarin.org
Phone: (415) 492-0230
Email: info@legalaidmarin.org
Services: Legal Aid of Marin provides legal representation and advocacy, information, referral, advice, community education, and other assistance to low-income and older adult residents of Marin County. In particular, the organization assists with problems related to housing, contracts, credit and consumer cases, and a variety of other civil legal issues.


Legal Aid of Napa Valley

Assistance:     Foreclosure in English and Spanish
Location: Napa
Website: www.legalaidnapa.org
Phone: (707) 259-0579
Services: Legal Aid of Napa Valley provides free bilingual legal assistance to seniors, immigrants, and low-income residents of Napa County.  The attorneys offer a legal services program for seniors and those at risk of becoming homeless.  In addition, the group holds legal advice clinics regularly at locations throughout Napa County.  People seeking legal advice may attend a clinic to consult with a legal advocate free of charge.  Interested individuals should contact Legal Aid before attending a clinic to confirm the time and place of the clinic and to schedule an appointment.


Legal Assistance to the Elderly (LAE)

Assistance:     Foreclosure to San Francisco residents age 60 and older and younger disabled adults in Spanish and Chinese (Mandarin and Cantonese)
Location: San Francisco
Phone: (415) 538-3333
Email: info@laesf.org
Services: LAE provides free legal services, including advice and representation, to San Francisco residents age 60 and over and to younger disabled adults.


Legal Services of Northern California

Assistance:     Foreclosure and Loan Scams in English and Spanish
Location: Auburn, Chico, Eureka, Redding, Sacramento, Vallejo, Ukiah, Woodland
Website: www.lsnc.net
Phone: Auburn (530) 823-7560, Chico (530) 345-9491, Eureka (707) 445-0866, Redding (530) 241-3565, Sacramento (916) 551-2150, Vallejo (707) 643-0054, Ukiah (707) 462-1471 or (877) 529-7700, Woodland (530) 662-1065
Services: This organization provides a broad range of civil legal services to low-income residents in the Counties of Sacramento, Amador, Calaveras, El Dorado, Nevada, Placer, Sierra, Butte, Colusa, Glenn, Plumas, Tehama, Del Norte, Humboldt,  Lassen, Modoc, Shasta, Siskiyou, Trinity, Solano, Lake, Mendocino, and Yolo.  The office has broad priorities, which includes housing matters such as foreclosure.


Pro Bono Project Silicon Valley

Assistance:     Foreclosure in English, Spanish, and Russian
Location: San Jose
Website: www.probonoproject.org
Phone: (408) 998-5298
Email: info@probonoproject.org
Services: The Pro Bono Project handles civil cases for low-income (125% of the Federal Poverty Level) citizens of Santa Clara County.  The organization also provides self-help materials and a pro se legal clinic.


Project Sentinel

Assistance:     Foreclosure and Housing Counseling in English and Mandarin
Location: Throughout California
Website: www.housing.org
Phone: (408) 720-9888 or (888) 331-3332
Email: info@housing.org
Services: Project Sentinel helps homeowners protect against foreclosure and predatory lending practices.  The agency also provides reverse mortgage counseling for seniors.  It further offers a free mediation program for all community disputes in the cities of Palo Alto, Los Altos, Mountain View, and Sunnyvale.  Project Sentinel does not provide legal representation in court.


Senior Law Project Inc.

Assistance:     Foreclosure
Location: Lakeport
Phone: (707) 263-4703 or 800-260-4703
Email: seniorlaw@pacific.net
Services: The Senior Law Project, Inc. provides free legal services to elderly residents (age 60 and over) of Lake and Mendocino counties.  Counseling and representation are provided in the following areas: elder abuse, public benefits (health, income and supportive services), housing rights, consumer protection and debt.  The Project delivers services through telephone consultations, in-person consultations both at the Senior Law Project office and at clients' homes or placement locations.


Volunteer Legal Services Program of the Bar Association of San Francisco (VLSP)

Assistance:     Foreclosure and Consumer in English, Mandarin, Cantonese, and Spanish
Location: San Francisco
Website: http://www.sfbar.org/volunteer/index.aspx
Phone: (415) 989-1616
Email: vlsp@sfbar.org
Services: VLSP provides a no-fee, pro bono panel system in most areas of civil law. Clients must be at poverty level guidelines or lower. All intakes are done over the phone; clients can call during open intake hours. VLSP matches clients with pro bono private attorneys through the Program, or schedules clients for one of our clinics staffed by pro bono private attorneys.  All clients and cases are handled on an appointment basis.  Individuals can also contact the group by attending a clinic at the San Francisco Public Library, Hastings College of the Law, 198 McAllister Street, 1st Floor (at Hyde Street), Louis B. Mayer Lounge on the 2ND SATURDAY OF EACH MONTH. On the LAST Saturday of each month, go to Providence Baptist Church, 1601 McKinnon Ave. at Mendell St., at 12:00 p.m.  

 

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Southern California

Asian Pacific American Legal Center of Southern California (APALC)

Assistance:     Foreclosure and Loan Scams in English, Cambodian, Chinese, Korean, and Vietnamese
Location: Los Angeles
Website: www.apalc.org
Phone: Main (213) 977-7500 , Cambodian (800) 867-3640, Chinese (Mandarin, Cantonese):  (800) 520-2356, Korean (800) 867-3126, Vietnamese (800) 267-7395
Services: APALC provides free legal assistance to low-income individuals, focusing on Asian and Pacific Islander communities, especially recent immigrants and refugees and limited-English speaking individuals.  APALC provides assistance over the telephone or in-person (appointments are required, no walk-ins).  To make an appointment, please call the hotline.


Bet Tzedek Legal Services

Assistance:     Loan Scams
Location: Three offices located in Los Angeles and North Hollywood
Website: http://www.bettzedek.org/consumerfraud.html
Email: consumer@bettzedek.org
Services:

The Consumer Protection Unit has three full-time attorneys specializing in home equity fraud matters.  Last year, Bet Tzedek's attorneys saved homes and obtained settlements worth more than $2 million from home equity scams.


Elder Law & Advocacy – Senior Citizens Legal Services

Assistance:     Foreclosure and Loan Modification Scams in English and Spanish
Location: Offices in El Centro and San Diego
Website: www.seniorlaw-sd.org
Phone: El Centro (760) 353-0223, San Diego (858) 565-1392
Email: elderlaw@seniorlaw-sd.org
Services: Elder Law & Advocacy is a non-profit organization serving seniors in San Diego and Imperial Counties.  EL&A's Senior Citizens Legal Services (SCLS) provides legal services to anyone 60 years of age and older, regardless of income, through the base office, regional offices and senior centers throughout San Diego.  Services are also provided to clients in rural, back country locations as part of the outreach program.  SCLS provides one-on-one appointments with licensed attorneys to meet their legal needs.  Free services can include consumer credit, housing, and income maintenance issues.  The litigation attorneys handle general civil litigation such as financial elder abuse, real property, business problems and credit collections.


HIV & AIDS Legal Services Alliance (HALSA)

Assistance:     Foreclosure in English and Spanish
Location: Los Angeles
Website: www.halsalegal.org
Phone: (213) 637-1690
Services: HALSA, Inc. provides direct legal services to low-income, HIV-positive residents of Los Angeles County.  Clients must provide proof of income, residency, and HIV+ diagnosis.  Services include public and private benefits, confidentiality, discrimination, healthcare access, immigration, housing, tax assistance, wills, and powers of attorney.


Inland Counties Legal Services

Assistance:     Foreclosure in English and Spanish
Location: Riverside, Indo, Victorville, San Bernardino, and Rancho Cucamonga
Website: www.inlandlegal.org/
Phone: Riverside (951) 368-2555 or (888) 245-4257, Indo (760) 342-1591 or (800) 226-4257, Victorville (760) 241-7073 or (888) 805-6455, San Bernardino (909) 884-8615 or (800) 677-4257, Rancho Cucamonga (909) 980-0982 or (800) 977-4257
Services: The organization provides legal assistance on a wide variety of civil legal matters, including housing and consumer fraud issues.


L.A. Gay and Lesbian Legal Services

Assistance:     Foreclosure in English and Spanish
Location: Los Angeles
Website: www.laglc.org
Phone: (323) 993-7670
Email: legalservices@laglc.org
Services: This organization’s legal clinic offers consultations with attorneys at a no- or low-cost basis for many civil matters, including consumer and housing issues.


Legal Aid Foundation of Los Angeles

Assistance:     Foreclosure and Loan Scams
Location: Six offices located throughout Los Angeles
Website: http://www.lafla.org/service.php?sect=consumer&sub=main
Hotline: (323) 801-7989, ext. 5250
Services:

The Consumer Law attorneys work with low-income homeowners on issues such as foreclosures, predatory lending practices, home equity loan scams, forged deeds and title transfers, and other loan modification scams.  For assistance, call the Consumer Hotline Mondays through Fridays 9:00 a.m. - 1:00 p.m.


Legal Aid Society of San Diego

Assistance:     Housing and Consumer Fraud Issues, Including Loan Scams
Location: Offices in San Diego and Oceanside
Website: www.lassd.org/index.html
Phone: 1-877-534-2524
Services: Legal Aid is available to low-income individuals and disadvantaged communities for a variety of legal problems, including consumer, family disputes, welfare and health benefits.


Legal Aid Society of Orange County

Assistance:     Foreclosure in English, Korean, Vietnamese, and Spanish
Location: Santa Ana
Website: www.legal-aid.com
Phone: (714) 571-5200 or (800) 834-5001
Services: The agency provides free legal services to low-income residents of Orange County and portions of Southeast/South Central Los Angeles County's poor and elderly.


Los Angeles Center for Law and Justice (LACLJ)

Assistance:     Foreclosure and Loan Scams
Location: Los Angeles
Website: http://www.laclj.org/
Phone: (323) 980-3500
Services:

LACLJ offers assistance to low-income homeowners facing foreclosures.  For more information, call the phone number above.


Neighborhood Legal Services of Los Angeles County

Assistance:     Foreclosure
Location: Pacoima, El Monte, and Glendale
Website: www.nls-la.org
Phone: (800) 433-6251
Services: The organization provides free legal services to low-income residents of Los Angeles County.  The group’s housing and consumer protection programs provide legal assistance on foreclosure and loan problems.


Public Counsel Law Center

Assistance:     Foreclosure and Loan Scams
Location: Los Angeles
Website: http://www.publiccounsel.org/overview/clp.html
Phone: (213) 385-2977, ext. 100
Services:

Public Counsel is the largest pro bono public interest law firm in the world that delivers legal and social services to the most vulnerable members of the community.  Its Consumer Law Project has represented countless poor consumers who have fallen prey to a variety of scams, including distressed homeowner scams.


Public Law Center

Assistance:     Housing and Consumer Issues in English, Spanish, and Vietnamese
Location: Santa Ana
Website: www.publiclawcenter.org
Phone: (714) 541-1010
Email: info@publiclawcenter.org
Services:

The Public Law Center (PLC) is Orange County's bar-sponsored, pro bono law firm. The PLC has a number of projects that assist clients, including a consumer project that handles fraudulent sales issues.

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Report A Scam


Attention homeowners:  If you think you have been a victim of a scam, or approached by a scammer, report it to the Loan Modification Scam Prevention Network now!  Your complaint could provide vital information that will help put loan modification scammers out of business.  

Call 1-888-995-HOPE or click here to submit a complaint online.  (With your permission, the complaint will automatically be shared with federal, state and local law enforcement)

How Do I Know if I Am a Victim of a Scam?

The easiest way to determine if you are a victim of a loan modification scam or have been approached by a potential scammer is just to ask yourself two simple questions:

  1. Did anyone offer to help modify your mortgage, either directly, through advertising, or by other means, such as a flyer?
  2. Were you guaranteed a loan modification or asked to do to any of the following: pay a fee, sign a contract, redirect mortgage payments, sign over title to your property, or stop making loan payments?

If the answer to either question is "yes," report the potential scam now by calling 1-888-995-HOPE or by filling out the simple online complaint form.

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List of Alleged Scammers


In California, law enforcement officials have brought civil and criminal lawsuits against numerous individuals and companies for alleged loan modification scams.  In addition, California regulatory agencies have revoked licenses of individuals perpetuating fraud against homeowners in distress.  Please be aware of the below names as scammers have been known to continue operations even after having been caught.  This information is not exhaustive, however.  Generally, homeowners seeking loan modification assistance are encouraged to work with HUD certified housing counselors, which can be found by clicking here.  Homeowners may also call the Homeowners' HOPE Hotline 1-888-995-4673 for free loan modification assistance.

The list of alleged scammers on this website was last updated on February 4, 2010. All information on this page is publically available. 

 

California Department of Real Estate (DRE):

The DRE has filed over 400 desist-and-refrain orders and/or accusations against companies performing loan modifications.  Homeowners can look up the names of these companies by visiting their website.  In addition, they can contact the DRE to inquire about what has happened with the order against a particular company or individual.

California Attorney General has filed suit against these individuals:

Arthur S. Aldridge
Sibpun Ampornpet
Michael Armendariz
Kenneth Buhler
Ruben Curiel
Christopher L. Diener 
George Escalante
Sharon Fasela
Terence Green Sr.
Ricardo Haag
Eli Hassine

 Quentin Hazell 
William Hutchings
Shawna Landis 
Xiaoke Li
Cesar Lopez
Stefano Marrero 
Maya Burrell Marrero
Kathleen Marrero-Davis
Rasha Yehia Melek
Zulmai Nazarzai
John D H N Nielsen		 Paul Noe  
Carol Pencille
Adrian Pomery
Eric Pony  
Paulette Pony  
Wilma Pony
Mitchell Roth
Hakimullah Sarpas
Karla C. Shippey
Ronald C. Specter
Dean Storm

California Attorney General has filed criminal charges against these individuals:

Saul Amador
Rosa Conrado
Marianne Curtis
Jesus Flores		 David Giron
Antonia Gonzalez
Isaura Hernandez
Alejandrina Maldonado		 Juan Perez
Anna Santos
Mary Alice Yraceburu

 
Businesses facing civil penalties:

California Foreclosure Specialists
Diener Law Firm
Direct Credit Solutions, Inc.
E. Pony, Inc.
Federal Land Grant (FLG), LLC
First Gov
Foreclosure Freedom
Foreclosure Prevention Services
Golden State Funding, Inc.
Greenleaf Lending, Inc.
H.E. Service Company		 Home Relief Services, LLC
KBS Resources, LLC
Land Grant Services, LLC
Landis Business Services, Inc.
Lease2OwnHomes
Lifetime Financial
Lighthouse Services
Living Water Lending, Inc.
MW Roth, PLC
Nations Mortgage, Inc. 
Olympic Escrow, Inc.		 Payment Processing Department
Payment Relief Services, Inc.
RMR Group Loss Mitigation, LLC
Shippey & Associates, P.C.
Statewide Financial Group, Inc.
United First, Inc. 
U.S. Foreclosure Relief, Inc.
US Homeowners Assistance 
US Homeowners Preservation Center
Virtual Escrow, Inc.


Additionally, the California State Bar has publically identified numerous attorneys about whom numerous complaints have been lodged regarding their loan modification services. The below attorneys are currently under investigation by the California State Bar for loan modification misconduct.  This information is current as of February 4, 2010.

David Arase (#233705), Costa Mesa, Arase Law Firm and National Housing Assistance
Nabile Anz (#183324), Irvine, Federal Loan Modification Law Center (resigned)
Stephen Burns (#113371), Los Angeles, Legal Group Network
Robert Buscho (#122556), Fullerton, United Law Group
Nicholas Chavarela (#251632), Santa Ana, Rodis Law Group and America’s Law Group
Gary Davidson (#32110), Costa Mesa (resigned)
Christopher Diener (#187890), Irvine, Home Relief Services LLC (involuntarily inactive)
Christian Dillon (#89376), USMAC Law Group (involuntarily inactive)
Cameron Edwards (#222549), Alliance Law Center in San Diego (resigned)
Kurt Elkins (#241562), Los Angeles
Steven Feldman (#103676), Mission Viejo, Feldman Law Center
Eric Douglas Johnson (#224065), Culver City, Avantgarde Group (resigned)
Paul Lucas (#163076), Aliso Viejo, Lucas Law Center (involuntarily inactive)
Tanmay Mistry (#251425), Los Angeles
Brandon Moreno (#233750), Santa Ana, U.S. Foreclosure Relief Corp.
Jeffrey Nemerofsky (#213014) Laguna Niguel, U.S. Advocacy Law Group and U.S. Financial Products (resigned)
Laguna Niguel (#207218), U.S. Advocacy Law Group and U.S. Financial Products
James Parsa (#153389), Southern California (resigned)
Gregory Paiva (#207218)
Adrian Pomery (#249664), Orange, U.S. Foreclosure Relief Corp.
Ronald Rodis (#181873), Newport Beach, Rodis Law Group and America’s Law Group (resigned)
Mitchell Roth (#77962), Sherman Oaks, San Diego, Riverside (resigned)
Sean Rutledge (#255938), Irvine, United Law Group (involuntarily inactive)
Mark Shoemaker (#134828), Long Beach, Advocates for Fair Lending
Timothy Thurman (#216048), Los Angeles, Trinity Law Group (resigned)
Marc Tow (#78429), Newport Beach, Marc Tow and Associates
Michael Yellin (#255050), Los Angeles, A Fresh Start Loan Modification

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Important State Loan Modification Scam Rules and Laws


California has enacted several state laws that directly address loan modification scams.  Homeowners with a basic understanding of these laws are less likely to become victims as they may be able to identify potential scams and illegal activities.

KNOW YOUR RIGHTS!

California Law Prohibits Advance Fees for Loan Modification Services (Senate Bill 94)

Enacted in the fall of 2009, California modified the California Civil Code, Business & Professions Code, and Financial Code to prohibit the upfront payment of fees by homeowners to anyone assisting with loan modifications.  For the most important provisions of the law, click here.

Additional Prohibitions for 3rd Parties Helping Homeowners with Loan Modifications or Foreclosures

California has an additional law, the Mortgage Foreclosure Consultants Act (Cal. Civ. Code § 2945), that places restrictions on 3rd parties assisting homeowners with loan modifications or foreclosures.  These restrictions are also important for homeowners to know. For more information on this law, click here.

Rules Governing Attorneys Providing Loan Modifications

Why are foreclosure consultants and attorneys teaming up to defraud homeowners experiencing mortgage-related distress?  Individuals acting as "foreclosure consultants" are not entitled to receive payment until their loan modification work is completed.  However, attorneys are permitted to accept advance fees for providing typical legal services.  As a consequence, some foreclosure consultants and others offering foreclosure prevention services may partner with attorneys in an effort to get around laws that prohibit them from receiving payments from homeowners before providing the foreclosure prevention services. Homeowners should know that these partnering arrangements may violate the ethics rules governing attorneys' professional conduct in California. For some examples of attorney misconduct relating to foreclosure prevention services that are prohibited by the California Bar, click here.

Secondary State Laws

There are many additional state laws that may not directly address loan modification scams, but can be used for prosecuting or filing private lawsuits against alleged scammers. For more information on some of these additional state laws, click here.

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Important Local Loan Modification Scam Rules and Laws


In addition to investigating local complaints of fraudulent practices and providing residents with information tailored to their communities, City and County governments often enact laws that afford residents foreclosure fraud protections beyond those provided by California State Law.

Los Angeles

In 2009, the City of Los Angeles passed the Mortgage Modification Consultants Ordinance (Los Angeles Municipal Code, Ch. IV, Art. 7.2). For more about this ordinance, click here.

San Francisco

In 2009, San Francisco passed Ordinance 203-09, Regulations for Mortgage Modification Consultants. For more about this ordinance, click here.

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State Law Enforcement


The following is a brief description of state law enforcement efforts underway in your state in the fight against loan modification scammers.  This information is not exhaustive and may change depending upon the resources and priorities of the state and local government officials and agencies.

California Attorney General’s Office

The California Attorney General’s Office has been one of the most active offices in the nation in pursuing mortgage rescue scammers.  The Office offers a hotline and an online complaint form for consumers to report loan modification scams.  The website also provides several resources for homeowners including:

  • lists of the individuals and businesses the Attorney General has sued because of alleged rescue scam activities; 
  • tips to avoid from being scammed; and
  • a lookup to determine if a foreclosure consultant is registered.

The Office further encourages homeowners who believe they have been scammed to consider pursuing a Small Claims Court action, where successful complainants can recover up to $7,500.

Resources:

California Department of Corporations

The Department of Corporations provides protection to consumers, and services to businesses, engaged in financial transactions.  The Department licenses and regulates a variety of businesses, such as securities brokers and dealers, investment advisers and financial planners, and certain fiduciaries and lenders.  In addition, the Department brings enforcement actions against people or companies perpetrating frauds, making misrepresentations, and pursuing predatory practices.  The website provides a look-up for consumers to research licensees.

Resources: 

California Department of Real Estate

The California Department of Real Estate (DRE) protects and serves the interests of the public in real estate transactions and provides related services to the real estate industry.  The DRE has filed over 400 desist-and-refrain orders and/or accusations against companies performing loan modifications.  Homeowners can look up the names of these companies on the DRE’s site and then contact the DRE to inquire about what has happened with the order against a particular company or individual. 

In addition, consumers can search for an individual’s or company’s licensing information from the DRE, Department of Corporations, Department of Financial Institutions, and the Office of the Real Estate Appraisers.

Homeowners can also file complaints about companies on the DRE’s consumer protection website, http://www.dre.ca.gov/cons_protect.html, as well as find many useful links, such as information about foreclosure rescue scams and how consumers can protect themselves from those scams.

Resources: 

California State Bar

The California State Bar has created the California State Bar Loan Modification Task Force, which works with federal, state, and local law enforcement as part of a statewide crackdown on foreclosure fraud.  The State Bar regularly issues ethics alerts on its website warning homeowners of violations committed by attorneys and news releases providing updates on attorney resignations and disbarments because of loan modification fraud investigations.  On the website, individuals can locate a local attorney referral service; address a fee dispute with an attorney; search an attorney’s record; and file complaints against attorneys.

Resources: 

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Local Law Enforcement


The following is a brief description of local law enforcement efforts underway in your state in the fight against loan modification scammers.  This information is not exhaustive and may change depending upon the resources and priorities of the state and local government official and agencies.

California San Joaquin Valley Task Force

In June of 2009, the Task Force was formed to address the growing mortgage fraud problem in the Central Valley.  The group investigates mortgage fraud and foreclosure rescue scams connected to the real estate boom and the bust that followed.  The group includes representatives from: the District Attorneys’ Offices in Fresno, Tulare, and other counties, the U.S. Department of Housing and Urban Development, Federal Bureau of Investigation, Internal Revenue Service, and the Secret Service.

Eastern District of California Mortgage Fraud Task Force

In 2008, the Task Force was established to create a targeted and coordinated approach in prioritizing the massive volume of referrals made to federal and state agencies.  Members of the Task Force include representatives from the U.S. Attorney’s Office, Federal Bureau of Investigation, Internal Revenue Service, the U.S.the Department of Housing and Urban Development, the United States Bankruptcy Trustee’s Office, and the California Department of Real Estate.

Los Angeles County Board of Supervisors
Real Estate Fraud/Predatory Lending Task Force

In January of 2009, the Los Angeles County Board of Supervisors created a new Real Estate Fraud/Predatory Lending Task Force to help homeowners who may have been victimized by predatory lending practices.  The County Board has a resource center on its website.  In addition, homeowners can file a claim for damages to person or property.

Resources:

Los Angeles County Department of Consumer Affairs

The Department serves consumers in Los Angeles County and provides services related to consumer protection, real estate fraud, and homeowner assistance, senior abuse and fraud protection, and Small Claims Court.  Specifically, the Department provides counseling, investigates complaints, and is the central reporting agency for real estate fraud for the County.  Homeowners can find information about how to survive the housing crisis on the Department’s website.

Resources:

Los Angeles County District Attorney’s Consumer Protection Division/Real Estate Fraud Task Force 

The Task Force is comprised of representatives from the Department of Real Estate, County Department of Consumer Affairs, County Registrar Recorder, Los Angeles Police Department, Los Angeles County Sheriff’s Department and County Assessor’s Office.  The group is currently investigating several types of foreclosure rescue fraud cases, including home equity sales contract fraud and mortgage foreclosure consultant fraud.  The Task Force meets monthly and shares information on current trends and cases being investigated.  The Los Angeles District Attorney’s website includes information and tips about how to avoid foreclosure, and further directs homeowners where to find help.

Resources:

Orange County District Attorney

Homeowners can submit an online report about real estate fraud in the Orange County area. In addition, on the website, the Orange County District Attorney’s Consumer Protection Unit offers general tips and resources for economic crimes.

Resources:

Sacramento County District Attorney’s Foreclosure Task Force

The Sacramento Housing and Redevelopment Agency, working in partnership with City and County staff (Code Enforcement, Neighborhood Services, City Attorney and District Attorney) are working to take strategic action aimed at reducing the rate of foreclosures and minimizing neighborhood impacts.  Homeowners can file a complaint with the Real Estate Fraud Unit or Consumer Unit of the Sacramento County District Attorney’s Office. 

Resources:

San Francisco District Attorney’s Mortgage and Investment Fraud Unit

On October 21, 2009, District Attorney Kamala D. Harris announced the formation of the first stand-alone Mortgage and Investment Fraud Unit in the San Francisco District Attorney’s (SFDA) Office to investigate and prosecute financial predators.  The Unit will be part of the SFDA Special Prosecution Division. While there is no website for the Unit as of 2009, the SFDA’s Office has a resource page for crime victims, which includes a helpline and tips on how to avoid mortgage fraud.

Resources:  

Santa Clara County District Attorney's Real Estate Fraud Unit

The Real Estate Fraud Unit of the Office of District Attorney for Santa Clara County consists of three Deputy District Attorneys, four Investigators and a Senior Paralegal.  In its 14½ years, the Unit has become the county's leading investigative agency for real estate fraud complaints and prosecutions. The Unit's objectives are to deter and punish those who commit real estate-related fraud, to help obtain restitution for victims, and to maintain community-based outreach and response.  The greatest increase in real estate fraud in Santa Clara County has been foreclosure related scams, a majority of which are loan modification scams. The Santa Clara County District Attorney's website includes information concerning the ongoing prosecution of suspects involved in loan modification scams, as well as contact information on how to submit a complaint directly to the Real Estate Fraud Unit.

 Resources:

 SCAM Task Force

In June of 2008, nine federal agencies in Los Angeles established a multi-agency task force to address the significant crime problem of mortgage fraud in Southern California.  The SCAM task force investigates mortgage fraud in two distinct areas known as "fraud for profit," and "fraud for housing." Fraud for profit or "industry-insider" fraud involves the skimming of equity, falsely inflating the value of the property, or the issuance of loans based on fictitious properties.

Resources:  

Ventura County District Attorney’s Office 

In September of 2009, the Office received almost $1.7 million in federal stimulus money to fight real estate crimes.  People who believe they have been victims of real estate fraud can find resources and file a complaint on the website.  In addition, homeowners in Ventura County can access service providers offering free assistance for real estate-related concerns by calling the Don’t Borrow Trouble Ventura County Service Provider Hotline, which has Spanish-speaking operators.

Resources: 

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Additional Informational Resources


General Mortgage Fraud Resources (including Loan Modification Scams)


Better Business Bureau (BBB)

Homeowners can go to the Better Business Bureau's (BBB) website to research or file a complaint against a business.  Please note that a new business may not appear on the site.  There are branches of the BBB throughout California.  To find the BBB nearest you, go to: http://www.bbb.org/us/find-a-bbb/.

Resources:      

Mortgage News Daily

The Mortgage Fraud Reporter

The Mortgage Fraud Blog

Other National Resources

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The Loan Modification Scam and Foreclosure Crisis in California


The Loan Modification Scam Crisis in California

Homeowners facing foreclosures are vulnerable to deceptive solicitations from for-profit companies promising solutions to their financial distress. In California, loan modification companies advertise in the mass media and in mailings targeting specific homeowners facing foreclosures.  The advertisements come with promises of successful loan modifications in exchange for upfront fees averaging $3,000 to as high as $9,500.  In the end, many of these companies do nothing for the homeowners except to dig the homeowner into deeper holes.

This problem of for-profit loan modification companies or specialists has been confirmed by the California Reinvestment Coalition, which conducted a survey of housing counseling agencies and legal service offices collectively serving over 11,000 consumers.  Over two-thirds of counselors reporting noted an increase in the number of borrowers coming to them for assistance who had previously paid for loan modification services.  Counselors report that homeowners received little work and poor outcomes from these for-profit providers.   Nearly half of the counselors reported that borrowers were told by the fee-based consultants that they should NOT contact their loan servicer.  In addition, almost half of counselors responding noted that the victimized are often non-English speakers presumably targeted for scams because of their relative lack of access to accurate information and non-profit resources. 

The Foreclosure Crisis in California

According to RealtyTrac, during the third quarter of 2009, California posted the nation's third highest state foreclosure rate, with one in every 53 housing units receiving a foreclosure filing.  In addition, of the metropolitan areas with the highest foreclosure activity in the third quarter, 6 of the top 10 were in California: Merced, Stockton, Modesto, Riverside/San Bernardino/Ontario, Bakersfield, and Vallejo/Fairfield.  Furthermore, the metropolitan areas of Sacramento/Arden/Arcade/Roseville, Fresno, Salinas, Visalia/Porterville, San Diego/Carlsbad/San Marcos were in the top twenty. 

National foreclosure statistics do not break out data by race or ethnicity.  However, there is evidence that Hispanic homeowners in California have been disproportionately impacted by the housing crisis because of the Hispanic populations in areas where the housing bubble was pronounced, such as Central and Southern California.  

For information about California's foreclosure process and timelines, click here for the Housing Economic Rights Advocates' FAQs sheet.

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Disclaimer: This website is designed for informational purposes only.  It is not legal advice and is not intended to create an attorney-client relationship.  The Loan Modification Scam Prevention Network does not warrant any information contained in this guide, nor does the Network suggest that the information in this website should be used as a basis to pursue legal advice or decision making. 

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