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Re: When Banks Won't Help Homeowners,,,,,U.S.
conclusion......
THE SAVIOR
The federal government is supposed to be helping distressed homeowners modify their mortgages through the Home Affordable Modification Program, or HAMP, which launched early in 2009 with the goal of modifying mortgages for 3 to 4 million homeowners.
But HAMP is falling short, according to its own data. Fewer than 600,000 homeowners are currently in so-called "permanent" five-year modifications, while more than 800,000 have had their modifications canceled. Borrowers who meet eligibility criteria -- including monthly mortgage payments amounting to more than 31 percent of their monthly income -- are supposed to be placed into permanent modifications if they successfully make reduced payments during a three-month "trial" modification. Many trial modifications have inexplicably dragged on for longer, and banks participating in the program have become notorious for losing paperwork. Confronted with banks violating program guidelines, the Treasury Department, which administers HAMP, says it can't punish bad banks because HAMP is voluntary.
The performance of the mortgage servicing industry itself has been so riddled with abuses -- "robo-signed" documents and questionable foreclosures among them -- that a coalition of all 50 state attorneys general, in a partnership with federal agencies, is trying to pry a multibillion-dollar settlement from banks.
Some of the roots of the current battle against modification scams can be traced to a spate of foreclosure ripoffs in Minnesota from several years ago. The state ended up banning deals in which companies took control of homes from distressed owners by promising to prevent a foreclosure. Other states followed suit, also banning foreclosure rescue deals -- and forbidding consultants from charging upfront fees for their services, a hallmark of the current mortgage modification scams.
To be sure, not all mortgage modification companies appear to be engaged in fee gouging and related abuses. According to a 2009 survey by the National Community Reinvestment Coalition, a nonprofit homeowner advocacy group that used "mystery shoppers" to examine 115 for-profit loan modification companies, most of the companies surveyed didn't ask for upfront fees after promising to engineer a modification.
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Still, more than 50 percent of the companies the NCRC surveyed committed the ultimate no-no: They advised the mystery shoppers to stop making mortgage payments and to stop talking to their lenders.
That's the kind of advice that Hassina Ansary of Springfield, Va., has experienced firsthand. She said that she sought help with her mortgage early in 2008 after an interest rate adjustment jacked her monthly payments to $2,800 from $1,900. She moved with her three children to her parents' basement and took on tenants at the house. For help with the mortgage, she turned to a company called the Shmuckler Group, which, lo and behold, charged her $2,000 upfront and told her to stop making mortgage payments, according to a lawsuit Ansary filed against the Shmuckler Group in federal court in Fairfax, Va., in September 2009.
Like Rosenwasser, the Shmuckler firm, based in Virginia and run by Howard Shmuckler, advertised itself online as "having direct insight" on the Obama administration's anti-foreclosure efforts. According to Ansary's lawsuit, the company advised Ansary to ignore late notices on missed payments and told her that foreclosure notices were a normal part of the modification process. By the end of 2008, Ansary's house had been sold to the highest bidder in a foreclosure auction on the steps of the Fairfax County Courthouse.
With the help of a nonprofit legal aid group, Ansary filed her suit against Shmuckler and last May a Virginia jury ordered Shmuckler to fork over $686,600 to Ansary for charging bogus fees and losing her home.
Around the same time Ansary won her judgment, a Washington, D.C. grand jury indicted Shmuckler for bank fraud for allegedly cutting himself $2.4 million worth in phony checks in 2005. Shmuckler is represented by a federal public defender and the case is ongoing.
Last year, the State of Maryland slapped the Shmuckler Group with a cease-and-desist order, accusing it of bilking 372 Maryland homeowners out of $1.2 million through bogus promises of loan mods. Then, last November, a Maryland grand jury indicted Shmuckler for theft, conspiracy to commit theft and operating as a credit business without a license. The case will go to trial within the next six months, said Doyle Nieman, who is an assistant state's attorney and also a member of the Maryland House of Delegates.
"In our efforts to protect the citizens of Maryland, we have spent over two years working to put a halt to loan modification scams and the Shmuckler Group is among the worst that our investigators have uncovered," said Mark Kaufman, Maryland's Commissioner of Financial Regulation, in a public statement last November.
The Shmuckler Group ceased operations in 2009, but Shmuckler himself, who is 67 and lives with his wife in Virginia Beach, is unapologetic about how he ran his former business (he has not commented publicly on the legal actions pending against him). His defunct company's website still maintains that of 1,100 customers served, "approximately 900 are in their homes today making affordable mortgage payments to the satisfaction of the financial institution, their families and the communities in which they reside."
When HuffPost reached Shmuckler over the phone two weeks ago, he said in a quiet, gentle voice that all the information needed to respond to reporters' questions could be found on his website, HowardShmuckler.com. Then he hung up.
The website redirects visitors to TheyKilledTheSavior.com, where visitors are greeted by a cartoon character resembling Shmuckler who revels in how much Shmuckler has done for distressed homeowners.
"No, Howard Shmuckler cannot, does not and never claimed to grant Eternal Salvation or save a Soul from Eternal Damnation," Shmuckler's site says. "Did Howard Shmuckler and The Shmuckler Group, LLC save nearly a thousand (1,000) HONEST families from being out on the street - from being evicted from their homes once they fell behind on their mortgage payments? YOU BET HE DID!"
Shmuckler's site says heartbreaking foreclosure stories inspired him to do modifications. "Shmuckler thought back to the fate of his own family home, in 1958 when at the age of 15 he saw a foreclosure notice on his door. Shmuckler's father had died the year earlier and he realized his mother had been feeding her three children instead of making the mortgage payments just like most families were doing today." Shmuckler said he marched into the offices of his family's lender and explained the situation. "[T]hey renegotiated the existing mortgage payment of $22.00 per month down to $15.00 per month and with a handshake Shmuckler took on the payment responsibility by working full time after school. That was the first mortgage modification of its kind. Shmuckler understood it was the bankers' obligation to make money on loans - not to be in the business of selling foreclosed houses."
The site goes on to identify Ansary as the predator, using an "evil monkey" -- a character from the Family Guy TV series -- to pointing at a picture of Ansary. The header above the picture says: "BEWARE - THE REAL SCAMMERS"
"Hassina Ansary's failure to cooperate with either TSG or the lending institutions to provide proof of ability to make even the lower mortgage payments led to the foreclosure of her investment property," the site says. "To this day she continues HER FRAUD AND SCAM by collecting rental income on this property."
Ansary, who works as an administrative assistant in a doctor's office, has sued Shmuckler for defamation and denies everything he's written -- including the assertion that she continues to collect rental income on her former home.
In July, Ansary filed a civil complaint to get Shmuckler to sell his Virginia Beach house to pay the judgment she'd been awarded last May. Shmuckler is now fighting to save his own home, a spotless two-story brick house in a brand-new Virginia Beach subdivision where the cul-de-sacs are lined with saplings.
 Photo by Laura Bassett.
In the last month a Fairfax County judge awarded damages ranging from $3,000 to $48,000 to 103 of Shmuckler's former clients, all of them Latino residents of Virginia represented pro bono by D.C. law firm Howrey LLP, according to Martin Cuniff, a lead attorney on the case. The lawsuits alleged that Shmuckler and his associates defrauded the homeowners with phony promises of modifications in return for big upfront fees. (Howrey dissolved on March 15.)
"[Shmuckler] is a very bright guy, very skilled, and he uses his skills to just defraud people," said Cuniff. "It's a whole world you and I don't see very often. It's just amazing."
THE ICEBERG
The Lawyers' Committee for Civil Rights Under Law, the group that is suing the "elaborate network" of mortgage modification predators in New York, launched a database last year to track modification scams and try "to get a clear picture of the loan modification scam crisis nationwide." The group is sharing data with the FTC and other organizations.
The group's National Loan Modification Scam Database received more than 11,060 complaints between January of last year and February, totaling $28.2 million, according to Yolanda McGill, a senior attorney with the Lawyers' Committee. McGill said there's no way to know how many scams go unreported.
"What we have is probably just the tip of the iceberg," she said.
END
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