Loan Mod Companies Taken Down for Illegal Practices

Allison Tussey —  August 11, 2011 — Leave a comment

Save My Home USA Co. Inc., Jason and Justin McCallum and Chad Buchanan, were ordered to cease and desist from doing business in Minnesota as residential mortgage originators or residential mortgage servicers. Michigan-based Save My Home USA Co. Inc. and its owners were charged with allegedly defrauding 118 Minnesota homeowners by taking upfront fees for loan modification services never provided to the consumers.

According to the investigation, Save My Home USA contacted the residents and convinced them to pay advance fees for loan modification services. The 118 homeowners allegedly paid a collective $289,020 in fees. Of the 23 homeowners contacted by the department, only one claims to have received loan modification services. Instead, residents lost as much as $1,000 to $4,000 per family, and fell farther behind on mortgage payments.

SafeHouse Professional Mortgage Restructuring (Safehouse), Certified Financial Protection Group (CFPG) & Michael Wayman

In February 2011, SafeHouse Professional Mortgage Restructuring and Certified Financial Protection Group, both of Temecula, Calif., and Michael Wayman, Menifee Calif., were ordered to each pay a $10,000 civil penalty, and barred them from residential mortgage origination or modification activity in Minnesota. They were also ordered to cease and desist from holding themselves out as residential mortgage servicers or originators in Minnesota.

According to the investigation, Wyman, CFPG and Safehouse collected more than $12,000 in fees from Minnesota residents for loan modification services before performing services and without providing any “meaningful assistance.”

LMS and Associates

Also in February 2011, Todd Jacobson, and his company LMS and Associates, were ordered to each pay a $100,000 civil penalty for engaging in unlicensed loan modification activity in the state and for engaging in deceptive practices. The investigation revealed that between April 24, 2009 and October 27, 2009, the unlicensed LMS allegedly invoiced 105 files for a total of $250,941 in fees.  The company allegedly told customers it could assist with a number of services, including repayment plans, repayment restructuring, loan modification, refinancing or short sales and that the customer would receive a refund if LMS couldn’t complete one or more of those services. 

According to the investgation, LMS allegedly did not perform the services it said it would, yet failed to issue refunds to customers as promised.  In the case of a customer in Paynesville, Minnesota, LMS allegedly forged a customer’s signature and used White-Out to alter information on forms.

Mortgage Auditors of America

In October 2010, Mortgage Auditors of America (MAA) entered into a consent order with the Minnesota Department of Commerce, agreeing to pay a $40,000 penalty ($20,000 of which was stayed) for deceptive practices and making false or misleading statements regarding loan modifications. The company was also ordered to refund consumers the money they paid for the services not rendered.

According to the investigation, MAA operated a scheme by which they offered mortgage loan modifications to distressed homeowners who paid a fee ranging from $1,500 to $2,995 for a “forensic audit.”  In return, the company allegedly offered to review the homeowner’s mortgage closing documents to determine whether the homeowner had been a victim of mortgage fraud.  In addition, MAA allegedly offered homeowners “free” loan modification services through affiliates County Loan Modification or Take the Land on Profit Services.  The company advertised its services on KTTB-FM (B96) and allegedly claimed “There is no risk to call and no charge” if they could not help.

The investigation revealed that MAA and its affiliates allegedly collected more than $27,000 in fees in at least 30 different cases.  There was no evidence, however, that the companies had successfully modified any of the loans.

Neither Mortgage Auditors of America nor its affiliate, Take The Land Nonprofit Housing Corp., are licensed mortgage originators in Minnesota.  The department has issued a cease-and-desist order, demanding that MAA and its affiliates stop representing themselves as residential mortgage originators in Minnesota.

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Allison Tussey

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