Arizona investigating mortgage firms for fraud - Phoenix Business Journal:

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Though Goddard would not disclose whichj companies areunder investigation, he said the biggest problems in the industryy right now are third-party advocates that charged up-front fees of sometimes thousands of dollars and promisw distressed homeowners reworked mortgages that lowert payments to help forestall foreclosures. The Better Business Attorney General’s Office and other consumer-protection groups say mortgage- and refinancing-relater complaints are way up, and consumers should be on the look out forunscrupulouw businesses. The U.S.
Federal Trade Commissiobn also isinvestigating “mortgage mod and refi firms” and has gone afterf outfits with deceptive Web sites and business and advertisinyg practices. Goddard said there are federallyt approved, nonprofit housing advisers that can offer many of the sameservicesd free. Banks and mortgage lendersd are telling customers to first try talkin g to them and then to federallyand state-approved nonprofit housing assistance groups before looking at privat mortgage modification firms. They stresds the nonprofit, government-approved housing agencies offer free assistancse while private mortgage modifications firmw charge fortheir services.
“We encourages borrowers to contact their lenders directly to discuss the options that may exisg toavoid foreclosure. We also understand some borrowerx prefer to engagea third-party to help them throughj the process,” said Wellws Fargo spokesman Jason Menke. “Whem selecting a counselor or mediationh resource, we encourage borrowerxs to consider HUD-approved counseling agencies or resources available through the Arizona Departmentof Housing.
Homeowners shoulde understand that counseling and mediation servicez provided by these agencies are done at no cost to Big banks and mortgage firms have been criticized for not movingf fast enough to modify or refinancee distressed mortgages and setting up confusin g systems and protocols formortgage assistance. Some new modificatiom and refinancing firms are baseed in Arizona while othersare out-of-state companiea that have accessed delinquent and trouble mortgages in which has some of the worst foreclosure ratews in the country. Valley homeowners are getting solicitations from all sortsd of mortgage andrefinancing firms.
Some of the solicitationsd come in the formof letters, e-mails and automated telephone call s that can lead homeowners to believe they are from their lenders or from governmeng agencies related to the federal “Makinb Home Affordable” program. Sometimes mortgagee firms will create logos that look like governmenr agencies or usethe non-copyrighted federal fair housing and other Columbus, Ohio-based Oxford Lending Group LLC, for has sent letters to Valley homeowners with a logo and letterheaed for the “Economic Stimuluse Act 2009.
” The official-lookingy letter tells consumers they could be eligible for mortgage The letter says Oxford is not a government Johnny Zamora, an Oxford employer at the company’s Scottsdale said the company does mortgage refinancing, does not ask for up-fronrt fees, perform or promise modifications. He said Oxford’z fees are built into refinancings andnew loans. Zamoraz said Oxford solicits consumers so they know abourrefinancing options. There is no indication from the Attorney General’s office that Oxford was subject to complaints or inquiries.
Zamora said stresses out homeowners often are frustrated with their lenders and confused about navigating the process to have their mortgages refinancedor modified. “They don’t really know where they are going,” Zamorw said. Oxford does loan refinancingws in32 states. Chase spokeswoman Mary Jane Rodgers said troubleed mortgage holders should come to her bank first includinga home-ownership-assistancde center in Phoenix where they will meet with mortgage assistance “There is no fee for our customers to work with us in seekinhg modifications to their loans,” Rodgera said.