Another Loan Workout Nightmare, plus Resources for Saving Your Home: Arizona
Published On: April 26, 2015
Hundreds of thousands of people try to save their homes are defrauded by “mortgage modification” and other scams.
Desperate people find themselves and their family on the street after trying to save their homes.
Yet another loan workout or modification scam. I am disgusted by the number of calls we receive every week detailing a company or lawyer who takes someone’s hard earned money and fails to deliver on their promise to modify the home mortgage.
This post is prompted by a phone call I just received from a young woman who contacted The American Association of Attorneys and Legal Professionals, www.aaalp.com, to help save her home. She understood she was hiring a lawyer that was part of this company (the small print on their web site states this is “not a law firm”).
Whenever there are desperate people you will find con artists ready to lure them with false promises, all with the goal of taking what little they have left (normally their money).
Foreclosure rescue scam – AAALP
For example meet Mrs. Smith. She was contacted by a company called AAALP (does not exist now, but there are hundreds of companies offering the same “service”) who referred her to someone she though to be a lawyer. She paid this “lawyer” $4,000 to help her. Supposedly the “lawyer” worked with the lender, but was unsuccessful in obtaining a modification. The “lawyer” then e-mailed her a bankruptcy petition to file with the court and told her “she was really not going through with the bankruptcy, but was just using it to postpone the trustee’s sale”. She followed directions from this “lawyer” and did not file any required documents. This resulted in the dismissal of her bankruptcy. A couple of months after the first case was dismissed this “lawyer” e-mailed her a second bankruptcy petition to file. The second case was dismissed for failure to file the required documents.
FAKE lawyer got paid, but did not do the work as promised
Now two months have passed; on Friday, April 24th the “lawyer” called to say the lender would not modify the loan; the trustee’s sale is scheduled for May 5th. This young woman is panicking and looking for help to file a third bankruptcy. Due to filing two prior bankruptcies she is going to have a challenge to file a third one is such a short time. As a result of this illegal advice this young woman is facing a serious up-hill battle to file and stay in a chapter 13 and save her home.
My first point – never hire someone from another state to help you solve a legal problem.
My second point – NEVER FILE A BANKRUPTCY WITHOUT THE INTENT TO FOLLOW THROUGH ON THE BANKRUPTCY.
My third point – The $4,000 she paid to this “lawyer” would have paid an experienced Arizona bankruptcy attorney to file a solid chapter 13 case and save her house.
Please be very careful when anyone offers to help individuals facing foreclosure. They are everywhere – TV, Internet and the mail. Put “mortgage workout fraud” into Google – there are 488,000 results. According to the Lawyers’ Committee for Civil Rights Under Law:
Lawyer-led schemes are particularly difficult to investigate, experts say. Only attorneys are allowed by law to solicit homeowners with offers of help in foreclosure cases, and investigators often cannot determine if legitimate services were provided.
Because of the time it takes to investigate and prosecute these white-collar crimes, federal officials told the Herald-Tribune that the schemes are often overlooked, and that many individuals running them in Florida continue to walk the streets.
Although Florida is home to roughly 10 percent of the nation’s foreclosure rescue complaints, the crime has largely gone unnoticed here.
First, you should be aware that, with very few exceptions, no one except an Arizona attorney can give legal advice to an Arizona citizen as to any workout on their home mortgage. Second, as of July 1, 2010, all companies that offer mortgage loan modification services to homeowners must be licensed by the Arizona Department of Financial Institutions as “mortgage brokers” or “mortgage bankers”.
Options in Bankruptcy, with Notes on Getting Help
Here are some links that might be of interest if you are facing foreclosure:
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
5 / 5
“You folks are the BEST OF THE BEST in Arizona.” M.H.
You and Jay are the best attorneys I have ever had or needed and thank God for the Honorable Robert Gottsfield in recommending you folks – I would have never made it through the entire process without you and Jay and God Bless you both always and stay in touch as well. You folks are the BEST OF THE BEST in Arizona.
5 / 5
“My only regret is that I didn’t find Diane sooner.” K.H.
I can’t say enough good things about Diane. The way she handled my not typical circumstances was amazing. I was very nervous to start the bankruptcy process but Diane just has a very comforting way of explaining the whole process. My only regret is that I didn’t find Diane sooner. If you find yourself in a financial situation that you can’t correct on your own, please Call Diane Drain as soon as possible.
5 / 5
“Filing for bankruptcy can be a stressful life event” R.A.
Filing for bankruptcy can be a stressful life event, and selecting the right attorney can add to this stress. Diane and Jay were a pleasure to work with, and it is obvious that they are passionate about helping people get their life back on track. I would highly recommend them if you need a bankruptcy attorney.
Want to avoid dishonest debt collectors? Watch this video from FTC’s Consumer Advice By Joseph Ferrari,July 22, 2022 (reprint from FTC, Consumer Alerts) During Military Consumer Month 2022, the FTC [...]
WHAT HAPPENS AT THE END OF A COVID-19 FORECLOSURE FORBEARANCE? Can servicers demand a large balance? Generally, the servicers should not be demanding full payment following a COVID forbearance. There [...]
Arizona Residential Eviction Actions Procedures – effective July 15, 2021 IT IS ORDERED that the following procedures are applicable to eviction actions governed by Arizona Revised Statutes, Title 33, filed [...]
There is so much mis-information about a forbearance of home mortgages during COVID-19. Know your options before making a decision not to pay your mortgage. (11/18/21 UPDATE - see summary of foreclosure alternatives) This [...]
My intention is to put you back in control of your life
Start with $0 down*. We provide affordable payment plans.
We are a debt relief agency; we help individuals and small businesses through the bankruptcy process. Attorney Advertising. This website is designed for general information only. Any information you obtain from this website should not be construed as legal advice, nor as grounds for forming an attorney-client relationship. You should consult an attorney for information on obtaining formal legal advice.