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Rates of Mortgage Fraud and Predatory Lending in Southern California Are Dropping, Research Says

April 29, 2009

The Los Angeles Times gave us relief from bad news about the mortgage crisis March 17 with an article on research suggesting that mortgage fraud is dropping in California and Nevada. The research said California's rank among states with the highest rate of mortgage fraud has dropped from fourth to eighth in the past year, and Nevada dropped out of the top 10 altogether. The study tied the drop to the establishment of an FBI task force to fight the fraud in Southern California. Released at the Mortgage Bankers Association's annual meeting in Las Vegas, the report was compiled by information broker LexisNexis.

The report's definition of mortgage fraud included lies on loan applications; falsified financial documents; and deceptions in other documentation like appraisals and income statements. In every case, the article said, a real estate professional such as a mortgage broker or a banker was involved in the fraud. As Irvine mortgage loan modification attorneys, we're pleased to hear this detail, because it helps to refute the common myth that bad decisions and irresponsibility by homeowners are chiefly responsible for the mortgage crisis. In reality, we believe people in every part of the mortgage lending industry have some responsibility.

Unfortunately, while the rate of mortgage fraud has gone down in California, there's still plenty left. The report notes that the "credit crunch," which makes loans hard to get, has driven many con artists away from purchase-related scams and into foreclosure prevention scams. Typically, foreclosure prevention scams involve taking a homeowner's money in exchange for a promise to help -- then disappearing, selling the home or draining the homeowner's equity. Banks may be more careful now that the economy is bad, but as Costa Mesa predatory lending attorneys, we know it still happens every day.

Howard Law's Placentia loan modification lawyers help homeowners at risk of foreclosure negotiate with their banks for changes to their mortgages. We have successfully changed the interest rates, loan length or even the principal owed for many homeowners, allowing them to catch up to payments and avoid foreclosure. And our Orange County predatory mortgage lending attorneys help clients sue lenders whose unfair and deceptive practices have locked them into loans they can't afford and never intended to agree to. If you're in this situation and you know you need help, Howard Law offers free, confidential consultations where you can learn more. To set one up, please contact us today.