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How to Spot Mortgage Scams and Avoid Home Loan Fraud

December 20, 2011 By Daily Properties, Real Estate & Mortgage News Editors Leave a Comment

It might not always be easy to spot mortgage scams. However, it can help to know some of the warning signs to look out for. Below are six red flags that might indicate you could be dealing with home loan fraud or mortgage scam:

 

  • A company tries to pressure you to sign over the deed to your home or sign any paperwork that you haven’t had a chance to read, and/or that you don’t fully understand. Never sign any documents without reading them first. Many homeowners think that they are signing documents for a loan modification or for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership of their home to someone who is now trying to evict them. A legitimate housing counselor would never pressure you to sign a document before you had a chance to read and/or understand it.
  • A company/person you don’t know asks you to release personal financial information online or over the phone. You should only give this type of information to companies that you know and trust, like your mortgage lender or an approved HUD counseling agency.
  • A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage. This fee might be called a processing fee or an administrative fee. However, once you pay the fee, you probably will never hear from this person or company again. When you try calling them, you will never get in contact with them and you certainly will not get your phone calls returned. They may pocket your money, keeping the money for themselves, and do little or nothing to help you save your home from foreclosure.
  • A company/person guarantees they can stop a foreclosure or get your loan modified. Nobody can make this guarantee to stop foreclosure or modify your loan. Legitimate, trustworthy HUD-approved counseling agencies will only promise they will try their very best to help you.
  • A company/person advises you to stop paying your mortgage company and pay them instead. Despite what a defrauder will tell you, you should never send a mortgage payment to anyone other than your mortgage lender. The minute you have trouble making your monthly payment, it is in your best interest to contact your mortgage lender.
  • A company claims to offer “government-approved” or “official government” loan modifications. They may be scam artists posing as legitimate organizations approved by, or affiliated with, the government. The scammer’s company name and website may sound like a real government agency, but the website may end with .com or .net instead of .gov. You may also see terms like “federal,” “HAMP,” “MHA,” “HARP” or other words related to official U.S. government programs. Contact your mortgage lender first. Your lender can tell you whether you qualify for any government programs to prevent foreclosure or modify your current loan. And, remember, you do not have to pay any organization or company to benefit from government backed loan modification programs.
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When Will the Mortgage Industy Start Revoking Licences – Second NAMB President Signs Consent Agreement with PA Department of Banking Bureau Compliance Investigation & Licencing for Violating and doing Unethical Loans

November 2, 2011 By Daily Properties, Real Estate & Mortgage News Editors Leave a Comment

Michael D'Alonzo Company was caught doing fraudulent FHA Loans but yet NAMB voted him in president - How corrupt is the system if this man is looked at as a leader? When will ethics be valued more, rather than cronyism

Current National Association of Mortgage Brokers (namb.org) President Michael D’Alonzo and his company, Creative Mortgage signed a consent agreement with the Commonwealth of Pennsylvania for violations of the Real Estate Settlement Procedures Act and the Pennsylvania Mortgage Licensing Act.

The state alleged that on 18 occasions Creative Mortgage, Michael D’Alonzo owned company, a non FHA-approved mortgage broker, submitted FHA insured mortgage loan applications to an FHA-approved broker and received compensation.  Consumers were to have allegedly paid over $84,000 in excessive and/or unearned fees payable to Creative Mortgage.

D’Alonzo is the second President of NAMB to be in trouble with the Commonwealth of PA.  Earlier this year, George Hanzimanolis signed a consent decree with the state.  Details of his agreement can be found HERE.

D’Alonzo in an article in the National Mortgage News had this to say about Hanzimanolis:

The editor asked
“ Has there been anyone in particular you have looked up to as a mentor in the industry?“

Michael D’Alonzo responded with
“Yes, it would be my longtime friend, George Hanzimanolis. Any time I have questions or second guess myself, I call George. He’s always been the voice of reason for me, and he’s probably one of the best presidents that NAMB has ever had. He always keeps me grounded with his advice.“

Both D’Alonzo and Hanzimanolis continue to be licensed for mortgage originations in Pennsylvania among others that have done fraudulent business practices. When will the mortgage industry start revoking licenses? What will it take? How many people need to be scammed?

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NAIHP files formal complaint against Fannie/Freddie Regulator over HVCC Cover-up

October 13, 2011 By Daily Properties, Real Estate & Mortgage News Editors Leave a Comment

NAIHP has filed a formal complaint with the Inspector General’s Office, alleging Fannie/Freddie and their regulator agreed to the terms of the Home Valuation Code of Conduct (HVCC) as part of a plea bargain like agreement to avoid further investigation by the New York Attorney General’s Office.

In December of 2008,Fannie Mae, Freddie Mac and the Federal Housing Finance Agency (FHFA), agreed to the final version of HVCC on the condition then New York Attorney General Andrew Cuomo, drop the GSE’s from his valuation fraud investigation.

“In May of 2008, I met with Fannie Mae General Counsel Beth Wilkinson. During our meeting, I asked the G.C. why Fannie signed on to the HVCC agreement.” Her exact words were, “Cuomo has his foot in our throats.” Amongst other evidence, this supports our allegation that the GSE’s only signed the agreement to escape further investigation by Cuomo,” said NAIHP President Marc Savitt.

NAIHP is vigorously pursuing copies of the tens of thousands of public comment letters received by the GSE’s and the FHFA, with respect to the HVCC. NAIHP has made numerous requests for these letters, all of which have been denied. A formal request through the Freedom of Information Act (FOIA) is being prepared.

In a May 19, 2010 letter to Andrew Cuomo, FHFA Acting Director Edward DeMarco stated, “The Home Valuation Code of Conduct deployed by Fannie Mae and Freddie Mac was implemented after taking extensive market place comments.” “Refusing to release the comment letters after admitting they relied upon them when implementing the HVCC suggests the letters fail to support the code’s implementation and the FHFA is deliberately withholding this information from the public and Congress,” said Savitt.

Since HVCC was implemented on May 1, 2009, valuation fraud has risen by over 50%, appraisal quality has decreased substantially, thousands of appraisal professionals have been forced out of business and home values have continued to decline. Additionally, new appraisal rules have created a sharp increase in settlement costs for consumers.

Although, the HVCC agreement expired late last year, it’s been replaced by similar language in the Dodd-Frank Act and GSE guidelines.

NAIHP will continue to work with Congress and the CFPB on this important issue.

Filed Under: Mortgage News Tagged With: , , , , ,

Can the Mortgage Professionals Tell Me Who Owns NAMB Enterprises, LLC?

July 10, 2011 By Daily Properties, Real Estate & Mortgage News Editors Leave a Comment

Or is NAMB Enterprises, LLC a secret society dedicated to the promotion of unethical practices? Perhaps the facts, as we find them, will speak for themselves.

Mortgage Professionals: please help me put the puzzle together. Post any relevant factual information you have in the comment section. Here is what I have unraveled so far…

NAMB Enterprises, LLC was registered in Delaware in May 2007. Other than the Delaware registered agent, no other names are listed on the filings. Suspicious? Stay with me, it gets even better.

When NAMB Enterprises, LLC was formed Roy Deloach indicated to others in the industry that Directors for NAMB Enterprises, LLC would be a revolving list. Roy also said that its Board would be made up of himself, the President and Immediate Past President. And he said it was a wholly owned subsidiary of NAMB.

The LLC filing doesn’t show NAMB or any organization as a parent, which makes NAMB Enterprises a standalone organization.

My presumption, unless they can prove otherwise, is that Roy and George Hanzimanolis have been continually involved in running the LLC since it was formed.
If Roy has been running NAMB Enterprises, LLC since 2007, doesn’t that discredit his statement that “ Directors for NAMB Enterprises, LLC would be a revolving list?”

These two are factually tied to NAMB Enterprises, LLC. Are there others? I have heard that a man by the name of James Pair may be as well, but have not seen verification of that yet. Last week discovered on a LinkedIn John Councilman is the Treasurer and FHA Chairman at NAMB and was asked by others on LinkedIn for financial information for NAMB Enterprises LLC but he shamefully attacked others rather then compling.

The facts I have come up with include that NAMB 990’s make no reference to NAMB Enterprises, LLC as a profit subsidiary. No other records, financial or otherwise, have been found or produced.

Accusations and attacks against anyone asking for financial information from NAMB Officials about NAMB Enterprises LLC seems to be common. If you are reading this and have NAMB Enterprises, LLC financial documents, please post them publicly for both NAMB members and non-NAMB members to see. I want to see bank statements, tax returns or evidence that there is a checking account and, if so, who is authorized to sign the checks. How much did the LLC earn? Who was paid out of the LLC?

Apparently when NAMB officials discussed Roy’s compensation options a year ago Roy offered to accept a third of NAMB Enterprises, LLC as part of his package. What does that tell us intuitively? NAMB Enterprises, LLC is making money! Why else would anyone offer to accept part of it as compensation?

If I was a board member at NAMB I would be very concerned. If NAMB Enterprises, LLC, or those controlling it have committed any type of fraud, director liability insurance will probably not cover it. Which could lead to innocent people being blamed for others actions.

Why board members should be worried? NAMB itself refuses to release any financials. They say it is because they are involved in a lawsuit and do not want the plaintiffs to know the scope of their assets. This makes for a great excuse to hide financials from members. If the lawsuit argument is not legitimate, every board member may be personally liable for intentional concealment of assets

People outside of NAMB are probably wondering who Roy DeLoach is, if you don’t know of him already. In addition to his NAMB Enterprises, LLC dealings, he has cushy $30K a quarter lobbying job from NAMB, is a married man who dabbles in infidelity (he would likely argue differently but as journalist we have had this statement verified by several within NAMB and outside of NAMB) and is a close friend of George Hanzimanolis.

George doesn’t have the highest morals, has been featured on this blog before. He is best known for getting caught paying illegal referral fees (George called them consulting fees) to unlicensed loan officers, while being the President of the National Association of Mortgage Brokers. George then negotiated a consent order agreeing to restitution, heavy fines and a 6 month suspension of his license. George denied violating the law… 37 TIMES!! And why has NAMB not kicked him out for violating the NAMB Code of Ethics?

Each person can make their own judgment on Roy’s and George’s ethical or unethical judgment based on how they handle themselves, but the facts make it clear to me where they and NAMB stands.

Once again I would be happy for NAMB and non-NAMB members to post any further information below in the comment section.

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National Association of Independent Housing Professionals (NAIHP) asks Obama to “Suspend” Harmful Rules

June 16, 2011 By Daily Properties, Real Estate & Mortgage News Editors Leave a Comment

Washington, DC – the National Association of Independent Housing Professionals (NAIHP) has asked President Obama to suspend several regulatory agency rules that have created harmful consequences for consumers and small business.

In a letter dated June 13, 2011, NAIHP President Marc Savitt, told Mr. Obama, “As you are well aware, this country is experiencing the worst financial crisis since the Great Depression. While your Administration and Congress search to find a solution to our economic troubles, consumers and small business continue to struggle with Main Street consequences created by misguided government regulations.”

The letter went on to say, “Since 2009, almost every housing rule, regulation, guideline and/or law, designed to protect the consumer, has ended up having the opposite effect. In the fragile housing finance market, consumer costs have increased substantially, including for those with excellent credit. At the same time, fraud has risen sharply, instead of declining. Moreover, underwriting guidelines have become so restrictive, even well qualified borrowers are being denied financing.”

According to Savitt, “NAIHP recommended an immediate suspension of certain rules, regulations and guidelines, until the housing industry and economy recover. Once a recovery takes hold, GAO studies should be conducted to determine the necessity for renewed government intervention. Consumer protection would NOT be jeopardized, as the rules in question have already been shown to be harmful.”

NAIHP is the legislative and regulatory voice of small business housing professionals. Designed as a grassroots association, NAIHP has members in all 50 states.

For a copy of NAIHP’s letter, go to www.naihp.org

Filed Under: Mortgage News
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