Beware of Mortgage Modification Scams

Many companies in this country offer false promises of mortgage relief.It is important to be aware of the signs of mortgage fraud to prevent these companies from taking your money. A mortgage scheme involving eight companies recently occurred in the US, and the businesses involved are now under fire.

The eight companies were found to be ripping off struggling homeowners by falsely promising help in avoiding foreclosures and lowering mortgage payments. Charging upfront fees, these companies collected millions of dollars. Now, such companies are being sued by federal and state officials.

Mortgage Fraud is No Joke

A joint law enforcement sweep called “Operation Mis-Modification” targeted law firms and counseling services that offered assistance in modifying mortgage payments. Officials explained that the firms were misrepresenting their services and giving promises that were never delivered.

On July 23, lawyers involved announced that these eight companies had violated federal law. Specifically, it is unlawful to collect fees from homeowners until they have actually received a written modification from their lender.

According to the Consumer Financial Protection Bureau, three of the suits filed against the companies involved payment of more than $25 million in illegal upfront fees. The Bureau’s director stated, “These companies pocketed illegal fees, taking millions of hard-earned dollars from distressed consumers, and then left those consumers worse off than they began. These practices are not only illegal, they are reprehensible.”

An advisory was issued by the Bureau to consumers, informing them how to identify mortgage modification scams. Some warning signs include demands for upfront payments and guarantees that a modification will be obtained. A company cannot guarantee that a mortgage will be lowered.

The Case of Stephen Siringoringo

One illegal operation had been going on since December 2010. The defendants involved were Garden Grove lawyer, Stephen Siringoringo, and his associates, Alfred Clausen and Joshua Cobb. Reportedly, this company would collect upfront fees ranging from $1,995 to $3,500 from homeowners. The Bureau’s suit explained that homeowners in “numerous instances received none of the promised services or relief.” When questioned by the media, Siringoringo did not respond.

The State Bar of California filed a disciplinary action against Siringoringo in 2012, accusing him of charging illegal upfront fees as part of a large-scale mortgage fraud scheme. Last December, a judge suggested that his law license be suspended for 18 months. Such suspension is pending appeal.

The Federal Trade Commission also filed six lawsuits against numerous other companies accused of perpetrating the same loan scheme. Lawsuits were filed in 15 states.InFlorida, Illinois and New York,a total of 32 separate suits were filed.

The Illinois Attorney General also recently stated, “These companies are nothing more than fronts for scammers, conning people out of thousands of dollars, while putting them at higher risk for foreclosure.”

If you think you have been the victim of mortgage fraud, a real estate attorney may be able to help you. Simon Law is dedicated to providing you with quality representation. With over 30 years of experience, the Las Vegas lawyer can handle virtually any real estate case. For more information about mortgage fraud, contact 702.451.7077 or