So, did you ever wonder whatever became of the hundreds or thousands of loan officers who helped get us into the sorry state we’re in by encouraging liar’s loans and whatnot so people could live way beyond their means because they saw it on HGTV? I had just assumed they were in Hell, being violated nine different ways by red-hot pokers or something, because my own personal sense of justice demands red-hot poker assault for most any crime against decency up to and including the wearing of Crocs. But I’ve grown quite used to disappointment, which is why I was not altogether surprised to learn that not only are these fine citizens not burning in a fiery lake somewhere, they’re actively trying to re-screw those same people, because.
“We just changed the script and changed the product we were selling,” said Mr. Soussana, who ran the Los Angeles sales office of Federal Loan Modification Law Center. The new script: You got a raw deal, and “Now, we’re able to help you out because we understand your lender.”
Mr. Soussana’s partners at FedMod, as the company is known, were also products of the formerly lucrative world of high-risk lending. The managing partner, Nabile Anz, known as Bill, previously co-owned Mortgage Link, a California subprime lender, now defunct, that once sold $30 million worth of loans a month.
So here’s the business plan: homeowners that you wedged into a mortgage that should not exist in nature find themselves unable to pay said mortgage, as you expected and as they would have known if they knew math and didn’t trust you (a douchebag). Not wanting to be tossed out of the house, because that’s just undignified, they hear an ad for a loan modification company (on the same TV channel they heard about your mortgage company on, one expects) that just happens to employ you or someone like you. They, not having learned their lesson the first time, trust you to contact their lender and get their mortgage tweaked for the low price of $3,500 even though they could have done the same thing themselves and, unlike you, might actually get results. That sounds like a fantastic company!
“Our job was to get the money in and then we’re done,” said Paul Pejman, a former sales agent who worked out of FedMod’s two-story headquarters in Irvine, Calif. He recounted his experience, he said, because “I really feel bad.”
“I had people calling me crying, and we were telling them, ‘You can pay me or you can lose your house,’ ” Mr. Pejman said. “People were giving me every dime they had, opening credit cards. But I never saw one client come out of it with a successful loan modification.”
Coming soon to an internet near you is a company called eModifyMyLoan, which sells software (for $199, but if you act now, only $97) that purports to help homeowners modify their own mortgages. Its CEO is one Chris Mozilo. Yes, Mozilo. Angelo is his uncle, Chris himself a veteran of Countrywide, now profiting off some of the very customers that his father’s company helped into their present predicaments. So that’s clever.
Anyway, many of these guys have been run out of the mortgage modification industry, and the FTC has filed a few lawsuits because every once in a while the system actually works. Look out for a handful of them to start a law firm to defend their old companies from the FTC.
Diana Prince // Jul 20, 2009 at 8:51 pm
sigh…
Jason // Jul 20, 2009 at 9:55 pm
A few weeks ago, Alyx sent me this gem:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aeTzfvEedKpQ
which boasts the following headline:
Morgan Stanley Plans to Turn Downgraded Loan CDO Into AAA Bonds
I wept.
Breakfast Links: Bernanke, Mortgage Brokers & Nine Inch Nails « The Reformed Broker // Jul 21, 2009 at 7:05 am
[...] Filthy mortgage brokers are now calling themselves “Loan Modification Specialists“. Jason kills it with this post. (LOLFed) [...]
toshiro_mifune // Jul 21, 2009 at 11:25 am
What a bunch of scumbags. Is it time yet for frontier justice?
Also, clearly people who Uggz should be red hot pokered as well.
Tony // Jul 23, 2009 at 10:51 am
Urge to kill… rising.
wild // Jul 23, 2009 at 11:00 am
It is a fantastic company, & scheme, & endeavor…these people dont go away, in the face of the fiery pit…rather they reform, regroup, and fall again and again…fantastically! It is sad to watch. And funny too~~I’m here for the laughs.
wild;)
Elmer Mercer // Jul 24, 2009 at 6:09 am
After working at one of these mtg. banks for quite a long time (over a decade and a half) and having lost my job when the whole industry tanked out several years back, I have found myself — like many others in this economic downturn — out there, pounding the pavement, unemployed, underemployed — facing foreclosure, working at temp. jobs, etc., etc., for the past 3+ years and let me first try to say to you that not all of us — that, is to say, that not each and every person in the mortgage banking field from back then was actively involved in committing mortgage fraud. Quite the opposite, in fact – many people that I worked with with were charged with trying to catch and report this type of fraud, rather, and, yet still others (like myself) had even more mundane types of workaday types of positions doing various office work — data-entry, I.T. work, bldg. svs., mail-room, etc., etc.. We had accounting dept’s., loan servicing departments, filing rooms full of files, we had paper-shufflers, document preparation clerks, telephone switchboards and so forth. . we had people who sat on the phone all day getting yelled at by various people, etc., etc., in other words not everyone in the entire Mtg. Banking industry across the board was/were the raging demon/s from hell cum used car salesman types that you are crediting us as being, just F.Y.I..
Anyway – secondly: I too – got a (temp.) job at one of these “loan modification” places (earlier this year) — not at one of the for-profit loan modification chop-shops like you are detailing in this article (those are even worse scams, I grant you) but at one of those 1-800-HOPE types of call-centers where the people who are working there are all HUD-certified “foreclosure prevention counselors.” OK, anyway — we are talking now about those ‘not-for-profit’ centers that are promoted on Obama’s “hope for homeowners” websites like
http://makinghomeaffordable.gov/ and http://www.hud.gov/hopeforhomeowners/ and so forth. . At first when I got the job I was excited thinking hey — this is a chance for me to give back. . to undo some of that bad karma that I got when I was working on the for-profit side of the scales. . but let me tell you — these not-for-profit consumer credit counseling types of facilities are (or can be anyway) scams too – just so you know — if only in a different sense. These scams – while they do not (it’s true) take money directly from the homeowners (those places are out there too, as you say, and are even worse). . anyway — these “NOT FOR PROFIT” companies were available to help and were FREE of cost to anyone that called in. . however — it was still a “scam” in a sense. . the scam worked like this — we did receive money from the federal government (and also from ‘participating’ lenders who subsized our work) and worked (and here was the kicker) on a quota type of system. See – the ‘not-for-profit’ companies receive their money on a _per-call_ basis and as such while you are working there (I found anyway) that your hands are tied to a certain extent. . though we are supposed to be there to “HELP” — and we got an earful in our training course about all of that.. in reality – when you got on the floor and actually started taking calls. . the counselors were/are not really there it turned out to help people as much as they possibly could, but rather to get through as many calls possible in the shortest possible time — we were pushed to be as vague and as non-committal to these people and to “stick to the script” as it were as much as possible and wherever possible to cut people short and keep things short and sweet — to basically push the callers back into speaking with their lenders directly (a pipe dream – as, at the time, many lenders weren’t taking the customers calls w/regard to loan mod’s and only wanted to talk to their borrowers in the capacity of debt collectors). Anyway – that was it that was the scam in a nutshell – we would try to get through as many calls as possible regardless of the fact that most of these people needed in-depth counseling and were facing serious trouble that required more hand-holding than the time we were alotted to speak to them. We were required, you see, to stick to a quota and to to get through a certain amount of client-calls in a day, a certain number of calls per hour were targeted, etc., etc., and if we failed to keep up with this rather rigid and busy pace, we were quickly terminated (I wound up quitting the job myself as it was rather difficult to have to rush or hurry along a client who was in tears talking about how their spouse had cancer or a and their mortgage broker’d lied to them and their house ((which had been in their family for generations, or whatever)) was being foreclosed on and they had lost their jobs, ((or some combination of all of those or what have yo)) etc., etc., etc., anyway it was really hard trying to really listen and genuinely help all of these people on the one hand and on the other hand having your supervisor quite literally standing over you — listening in on your calls and breathing down your neck to hurry up constantly because of this (regardless of what their problem was) person was just a drop in the bucket to them .. and their time was up (as they saw it) and it was always time that I needed to get off the phone with this one and get on to the next caller. . (because they were always trying to meet a certain quota of calls, each day, each month, etc. – so that they could could get MORE money from the federal govt. — the first month I was there working at this place, for instance, we were told that the place had met it’s goal of ((I forget how many thousands of)) calls for the month total and the govt. (and other entities who paid our salaries) were paying our ‘not for profit’ something like I think it was 11-12 million dollars for meeting and exceeding our quota! And so we were being pushed even harder to get through more calls this month if possible. I don’t know if you can see it here this conflict of interest — but this was all from that government bailout money getting doled out supposedly to HELP these people and they were just getting corralled through the system like cattle so that we could get all of their info, “help’ them only slightly if at all and get onto the next head-to-count. . so once again (as I saw it anyway) there was all of this govt. money being flushed down the toilet so that we could (get paid) rush these poor people through from call to call, just barely helping them (if we were able to help them at all) and doing the barest minimum possible so that our bosses and our bosses bosses stroke eachother off in the boardroom about growth and expansion and whatnot – could rake in as much money as they possibly could basically and keep up with their monthly and quarterly quotas. . all at the expense of the people that we were there supposedly to help, who were getting the shortest of short shrift treatment at at time when they were most desperately in need of help.
To give you and idea of how effective we were at helping people – while they were celebrating how we’d made our quota for the previous month and meeting our record level of call numbers . . we were simultaneously also being told that we had just seen our very first approval go through on the lender’s end. . meaning of all those ten or twelve thousand calls that we’d done the previous month and all the months besides that — so far at that point only ONE — `1′ of those people actually went all the way through to the point with their lender where the lender was actually modifying their loan. I don’t know how that works out mathematically and how much in terms of subsidies on the bank end were being paid out (that TARP money was not being accounted for very well once it was handed over to the banksters) but if they were paying us 11 or 12 million for getting through and ‘helping’ however many 10-15 thousand calls or whatever it was the previous month and only ONE of those people actually got a modification that doesn’t seem like a good use of resources (tax dollars) to me – does it to you? Anyway, like I say once I got the gist of what was going on. . I wound up quitting that job.