Don’t Be Fooled By Loan Modification Scammers

May 20, 2012

Loan Modification Scam PictureThe Illinois Department of Financial and Professional Regulation issued an ethics alert by the Attorney Registration and Disciplinary Commission (ARDC) concerning loan modification scammers recruiting lawyers throughout the Chicagoland real estate area.

It appears that loan modification scammers have been circumventing state and federal legislation set up to protect homeowners from unfair or deceptive practices by recruiting lawyers who are exempt from the legislation.

With the housing industry still not out of the woods and unemployment still high, loan modifications are often sought out by homeowners trying to make their mortgage payments and not lose their homes. Of course, there is always some shady businesses who will entice you with big promises while stealing your home right out from under you.

Due to a provision in the 2006 Mortgage Rescue Fraud Act, lawyers can accept upfront fees from homeowners for mortgage rescue services in the course of legitimate legal work. Many companies have used this loophole to hire a lawyer as the face of their operation. Once homeowners hand over their money to these loan modification companies, that money is long gone and the promised legal services offered by the attorney are never performed.

Last year Attorney General Lisa Madigan filed four lawsuits against Chicago area mortgage scammers. The companies were ZeTrust Legal Services, of Chicago; Legal Modification Network LLC, based in Woodridge; Loan Litigators International LLC, a now defunct company that operated out of Lombard; and Exelpol Management & Consulting Inc, a dissolved corporation based in Schaumburg.

“By now, we’ve all seen the ads from so-called ‘loan mod consultants’ or ‘mortgage rescuers,’ claiming they’ll save your house from foreclosure,” Attorney General Madigan said in 2011. “Please know these operations are run by con artists who have started to use attorneys as sham fronts. These operators are scamming families out of thousands of dollars and actually making foreclosure more likely.”

Yet the best efforts of the State to stop these scams don’t mean they have gone away, which is why the Illinois Department of Financial and Professional Regulation released tips to avoid being bamboozled. Find them here.

Of course, it is important to remember that if something sounds too good to be true, it often is.

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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