They’re Baaaaaaaaack! Subprime Mortgage Lenders Morph Into Alleged Mortgage Modification Cheats


Buyer beware: The alleged crooks are back! And, they are after YOUR money; and getting it.

An eye opening account in the New York Times is a must read for anyone who is seeking a mortgage modification.

The article talks about how many of the very same people who seeded the current financial crisis with subprime mortgages are now going into the mortgage modification racket.

That’s right—the same people who often knowingly brokered subprimes to people they knew–or should have known–could never afford them, are now offering, for an upfront fee, of course, to get those subprime mortgages altered to be more affordable.

And, just like the last time, there is a catch…a big one. According to the article, more often than not, these new firms collect the up front fees (thousands of dollars) then fail to deliver the loan modification promised or, at least, strongly implied.

The feds have been going after some of these folks, but even before one law suit is filed, another one of these companies seemingly flings open its doors with their greedy little hands extended all the way into your pockets.

In some states, such as California, some of these new companies, says the Times, are hiring lawyers so they can claim to be a law firm–giving them the right to collect up front fees even if not registered as a real estate broker in the state. Clever, right?

Nice – The Big Boys Were Protected & Rewarded–What About Everyone Else?

In just the past week, we have learned that Goldmans and JPChase have racked up enormous quarterly profits, having had their rear ends saved by taxpayers’ dollars.

The federal government did all it could to keep these “too big to fail” pick-pockets from going under…And, in fact, by failing to rescue some smaller concerns, actually set the stage for the few, remaining big guys to have an even bigger playing field all to themselves.

Did these “too big to fail” crooks come to the rescue of the millions facing foreclosures—many from the subprime mortgages brokered to them by the newly reconstituted loan modification companies?–not a chance!

The feds helped the big guys and the big buys, in turn, have collectively spat on you.

And, now, we learn there is enough saliva left for former subprime mortgage brokers to spit on you all over again by calling themselves mortgage modification officers.

Like I said, buyer beware. Hopeful mortgage modifier, too.

Photo Credit: Matt and Bess

About Author

Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog, as well as on The Huffington Post.


  1. Josh,

    While I do agree with your statements, it is also swimming with the sharks when you call some of these workout departments. Owners are held hostage by Voice Mail and can take weeks for someone to get back. Loan Mods done right with proper negoations and Attorneys (in some states) can get the ball rolling.

    Loan Mods are the new subprime for sure. I see it popping up everywhere.

    And as far as calling HOPE NOW people. Forget it. They can’t even find a paper clip. They are so overwhelmed.

    But great article as usual.

  2. There are legitimate Loan Modification companies out there. You just need to do your research first. Be sure they offer you a money back guarantee, that your funds are deposited with a third-party trust, and that you review your contract completely with them.

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