The United States has sent a clear message to loan modification scammers and perpetrators of mortgage fraud: we're coming to get you.
This message was delivered as U.S. marshals nabbed a man named Jose Benjamin Rodriguez over Labor Day weekend. Rodriguez, who has been described by the scammed as a "slick, smooth talker" who "quoted the constitution," was convicted of leading a company that bilked 96 elderly and non English-speaking Nevadans out of over 1 million dollars. Rodriguez' arrest followed a 5-month chase which resulted in 7 other arrests in two states.
Rodriguez' company- which was called "Majestic Group" and later "Nevada Sky Premier"- used people's desperate situations against them in the worst way. Homeowners were recruited from distressed homeowner seminars and joined programs named "new start," "foreclosure back," or "principal reduction." They were told that their mortgage problems would be eliminated within 6-9 months, in exchange for expensive fees. Supposedly, a group of secret investors would purchase the homes from the homeowners, then transfer back ownership at a lower rate. Homeowners who were enrolled in one of Rodriguez' programs were told to ignore foreclosure notices from the bank, because it was simply part of the program.
Of course, homeowners were never told that the group of investors didn't exist, and that the foreclosure warnings should not have been ignored. In total, homeowners paid Rodriguez' companies about $1.5 million, and many of the homeowners who were involved lost their homes and were forced to move elsewhere.
There were three red flags within this case that are common to foreclosure rescue scams; have you noticed what they are?
What Should the Homeowners Have Noticed? What Was Wrong: Scammers promised that homes would be saved in a certain number of months.
They Should've Known: A foreclosure defense attorney or law firm may be able to tell you the average amount of time that it takes for most of their cases to be completed, but they can never guarantee any results.
What Was Wrong: Rodriguez' company told homeowners that a secret company would purchase the home for a low price, then transfer the ownership back to the homeowners.
They Should've Known: Steer clear of anyone who promises to save your home through some secret or clandestine means. If someone's foreclosure defense strategies don't involve the courtroom or working directly with your mortgage lender, then steer clear!What Was Wrong: Once they began paying fees, homeowners were not kept privy to what was going on with their mortgage.
They Should've Known: If you're paying for a service, you should at least be updated regularly on the current status of your case. Some law firms offer a system that provides clients with instantaneous updates once the law firm receives any information on the clients' case.
All in all, no amount of money can ever undo the physical, social, and emotional damage that mortgage scammers like Rodriguez cause homeowners. That's why it is advised for homeowners to hire only attorneys to assist with legal matters and research them with the available resources (e.g. State Bar, lawyers.com).
Read our article on how to recognize loan modification scams.
