Financial Instability of Sonoma County Families Breeds New Forms of Fraud

April 23, 2013, by Law Offices of James V. Sansone
By Law Offices of James V. Sansone on April 23, 2013 8:00 AM |

bankownedpic.jpgSonoma County foreclosures may be less common than they were two years ago, but they continue to besiege financially vulnerable homeowners.

According to The Real Estate Report, notices of default in Sonoma County - the first step in the foreclosure process - jumped 52.1% in February. But the good news is that there were still down by 70.1% from the previous year.

Due to the avalanche of foreclosures in recent years, banks continue to own about 685 properties in the county.

Financial Vulnerability Breeds New Forms of Fraud

The Great Recession saw too many people lose their jobs and their homes. Unfortunately, unscrupulous individuals saw a window of opportunity amid this atmosphere of pain and financial uncertainty.

As part of their fraud, companies cropped up, claiming they could prevent foreclosure by negotiating with a consumer's lender or obtaining a loan modification.
These services were offered at a price and naïve and desperate homeowners facing the prospect of foreclosure gladly paid the fee.

Many of the companies pretended to be affiliated with the government or government housing assistance programs. Others falsely claimed to offer legal services or "audits" of consumers' loan paperwork to help them negotiate a resolution with their lenders.
Unfortunately, promised services were never delivered.

FTC Steps In

Their activity did not go unnoticed by the Federal Trade Commission (FTC). In recent years, the FTC has filed more than 35 cases against marketers of mortgage relief services.

In 2010, the FTC issued the Mortgage Assistance Relief Services (or "MARS") Rule - which bans mortgage relief providers from collecting fees until they have obtained a loan modification or other consumer relief. The rule also prohibits providers from misrepresenting material aspects of their services.

California Case

In California, The FTC issued an order against the Los Angeles-based Consumer Advocates Group Experts, LLC, company owner Ryan Zimmerman, and two other related companies. Its ruling bans the defendants from marketing any mortgage assistance relief or other debt relief products or services in the future.

What You Can Do to Prevent Foreclosure

If you fear that you may be forced to lose your home, here are some steps you can take to prevent this from happening.

  • Work with your lender to create a repayment plan that allows you to make up some missed payments.
  • If you can demonstrate that you will no longer encounter any problem making your monthly payments, your lender might forgive the previous debt. Talk to your lender.
  • Consider changing the terms of your loan, especially if you have an adjustable loan.
  • Attempt to add your late payments to the loan balance.
  • Discuss your realistic options with your lawyer
. When you are ready to file for foreclosure and bankruptcy, you should consult with an experienced bankruptcy lawyer to discuss your options, protections and rights.

The Law Offices of James V. Sansone offers a full range of family law and bankruptcy legal services. We are located in Santa Rosa, California and serve clients throughout Sonoma County, Mendocino County, and Lake County, including Santa Rosa, Petaluma, Cotati, Rohnert Park, Sebastopol, Healdsburg, Sonoma, Kenwood, Glen Ellen, Windsor, Bodega Bay, Ukiah, Willits, Clearlake, Lakeport, and Kelseyville.