Arizona investigating mortgage firms for fraud - Phoenix Business Journal:

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Though Goddard would not disclose which companiese areunder investigation, he said the biggest problems in the industrhy right now are third-part advocates that charge up-front fees of sometimes thousandds of dollars and promisse distressed homeowners reworked mortgages that lower paymentws to help forestall foreclosures. The Bettert Business Bureau, Attorney General’s Office and other consumer-protection groups say mortgage - and refinancing-related complaints are way up, and consumers should be on the look out forunscrupulouxs businesses. The U.S.
Federal Trade Commission also isinvestigatingg “mortgage mod and refi firms” and has gone aftef outfits with deceptive Web sites and businesd and advertising practices. Goddard said there are federallyy approved, nonprofit housing advisers that can offe r many of the sameservices free. Bank and mortgage lenders are telling customers to firs try talking to them and then to federallyuand state-approved nonprofit housing assistance group s before looking at private mortgage modificationm firms. They stress the nonprofit, government-approved housingt agencies offer free assistance whiler private mortgage modifications firms charge fortheir services.
“We encouragse borrowers to contact their lenders directlu to discuss the options that may existy toavoid foreclosure. We also understanrd some borrowers prefer to engageea third-party to help them through the said Wells Fargo spokesman Jason “When selecting a counselor or mediation resource, we encouragde borrowers to consider HUD-approved counseling agenciezs or resources available through the Arizona Department of Homeowners should understand that counselinf and mediation services provides by these agencies are done at no cost to Big banks and mortgage firms have been criticizede for not moving fast enough to modifty or refinance distressed mortgages and setting up confusinb systems and protocols for mortgage assistance.
Some new modification and refinancing firms are based in Arizonsa while othersare out-of-state companiews that have accessed delinquent and trouble mortgages in Phoenix, whichg has some of the worst foreclosure rates in the country. Valley homeowners are getting solicitation from all sorts of mortgag e andrefinancing firms. Some of the solicitationse come in the formof letters, e-mails and automatexd telephone calls that can lead homeowners to believe they are from their lenders or from government agencies related to the federal “Makiny Home Affordable” program.
Sometimes mortgage firms will create logos that look like government agenciesz or usethe non-copyrighted federal fair housinvg and other logos. Columbus, Ohio-based Oxfordd Lending Group LLC, for example, has sent letter s to Valley homeowners with a logo and letterhead forthe “Economic Stimulus Act 2009.” The official-looking letter tells consumers they could be eligible for mortgage The letter says Oxford is not a governmentr agency. Johnny Zamora, an Oxforf employee at the company’s Scottsdaled office, said the company does mortgagre refinancing, does not ask for up-frontg fees, perform or promise modifications.
He said Oxford’e fees are built into refinancing andnew loans. Zamora said Oxford solicitws consumers so they know aboutrefinancing options. There is no indication from theAttorneyg General’s office that Oxford was subject to complaints or Zamora said stressed out homeowners often are frustrated with their lenders and confusecd about navigating the process to have theirf mortgages refinanced or modified. “They don’t reallt know where they are going,” Zamorza said.
Oxford does loan refinancings in 32 Chase spokeswoman Mary Jane Rodgers said troubledd mortgage holders should come to her bank first includintga home-ownership-assistance center in Phoenix wheree they will meet with mortgage assistance counselor. “Therd is no fee for our customers to work with us in seekinh modifications totheir loans,” Rodgers said.