Click Here

REALTORŪ Magazine Online: The real estate professional's business support tool.

OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®

Daily Real Estate News  |  January 4, 2011  |   Subprime Lenders Find Trouble in 'Fixer' Role
Many loan brokers lost their job during the subprime crisis, in which too many bad home loans were issued leading to record high numbers of defaults. But some lenders are back and have decided to focus on the mortgage modification business, trying to help the home owners they once put into bad loans.

"Some of the same people who were involved in luring people into loan origination schemes years ago are now back," Benjamin B. Wagner, a Fresno-based U.S. attorney who co-chairs a nationwide multi-agency mortgage fraud task force, told MSNBC. But some are finding themselves in trouble with the law again.

For example, PacWest Funding once provided loans to home owners but in late 2007--during the height of the subprime crisis--restructured the company. They relaunched as Green Credit Solutions, a loan modification firm that set out to help borrowers who faced rapidly ballooning payments on loans they could not afford.

The company is now being investigated by state and federal officials after customers complained they paid thousands of dollars for loan workouts that never happened. Green Credit Solutions, which had 6,400 loan modification files when state officials raided its offices in late 2009, has since shut down.

In another example, Bernardette Perry of Synergy Financial Management Corp., recast the company as Loss Mitigation Services Inc., a foreclosure relief firm. But regulators say the company did little to help its 1,400 clients who paid $5,500 each. Perry has since been banned from working in the loan modification business.

Source: “Subprime Lenders Remake Themselves as Fixers,” Associated Press (Jan. 2, 2011)

Browse all of today's news
E-mail this page to a friend
Give us feedback


Search news
Launch my search
 
Subscribe to news
Subscribe to News
Daily and weekly real estate news, trends, NAR press releases, convention coverage, plus exclusive features and columns.

RSS Feed
Get the Daily Real Estate News delivered straight to your desktop or news aggregator. (New to RSS? Learn the basics here.)
 
 
SHARE YOUR INSIGHTS
How did you sell it?
Tell us how you overcame hurdles to sell a challenging or very unique listing!