Four months ago 17 News reported on a local family that fell victim to a foreclosure scam. That family says an attorney promised to save their home so they gave him $10,000. Now the Attorney General's Office stepped in and says the local family is just one of thousands victimized.
After he lost the fight against foreclosure, Eddy Herrera and his family moved into a south Bakersfield apartment.
"It wasn't big enough for everybody so everybody had to go their own way," Herrera said.
Herrera says his family was spilt up and experienced the human toll of foreclosure. The 23 year old, his two brothers, and their parents all lived in their southwest Bakersfield home until their loan readjusted, they couldn't afford their mortgage, and they believed attorney Mitchell Roth could help.
"He was telling us that he would help lower our interest rate, lower our mortgage, but it turned out to be a disaster," Herrera explained.
He says Roth and a company he worked with called United First promised to help. But $10,000 later, the family says they discovered the company never even tried to contact their lender and they lost their home.
Four months later, the house still sits empty and the Attorney General's Office announced the Herrera family is not alone. The state says it is suing Roth and the owner of United First, Paul Noe Jr., for defrauding more than 2,000 homeowners.
"The contracts that borrowers were asked to sign violated California law and then on top of that Roth's firm basically abandoned all of the consumers paying thousands of dollars in monthly fees," Benjamin G. Diehl of the Attorney General's Office said.
The Attorney General's Office says the State Bar closed Roth's law firm and United First was forced to file for bankruptcy. But the state filed a $2 million lawsuit and hopes to get homeowners their money back.
As for Eddy Herrera, he says he'll never get back the hardest he's ever worked for.
"The house... the 10 grand is nothing compared to the house," Herrera said.
17News tried to contact Roth and United First by phone but both numbers have been disconnected.
The state says you should never pay anyone to deal with your lender for you. Below are some more tips from the Attorney General's Office:
DON'T pay money to people who promise to work with your lender to modify your loan. It is unlawful for foreclosure consultants to collect money before (1) they give you a written contract describing the services they promise to provide and (2) they actually perform all the services described in the contract, such as negotiating new monthly payments or a new mortgage loan. However, an advance fee may be charged by an attorney, or by a real estate broker who has submitted the advance fee agreement to the Department of Real Estate, for review.
DO call your lender yourself. Your lender wants to hear from you, and will likely be much more willing to work directly with you than with a foreclosure consultant.
DON'T ignore letters from your lender. Consider contacting your lender yourself, many lenders are willing to work with homeowners who are behind on their payments.
DON'T transfer title or sell your house to a "foreclosure rescuer." Fraudulent foreclosure consultants often promise that if homeowners transfer title, they may stay in the home as renters and buy their home back later. The foreclosure consultants claim that transfer is necessary so that someone with a better credit rating can obtain a new loan to prevent foreclosure. BEWARE! This is a common scheme so-called "rescuers" use to evict homeowners and steal all or most of the home's equity.
DON'T pay your mortgage payments to someone other than your lender or loan servicer, even if he or she promises to pass the payment on. Fraudulent foreclosure consultants often keep the money for themselves.
DON'T sign any documents without reading them first. Many homeowners think that they are signing documents for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership to the "rescuer."
DO contact housing counselors approved by the U.S. Department of Housing and Urban Development (HUD), who may be able to help you for free. For a referral to a housing counselor near you, contact HUD at 1-800-569-4287 (TTY: 1-800-877-8339) or www.hud.gov.
