Florida real estate was hit especially hard by the recent recession. Many residents found themselves with mortgage payments that they were unable to pay or owing more on their homes than they were worth. Some of those facing foreclosure felt that they had no option other than to seek a loan modification as they worked to stay in their houses. Many who sought a loan modification ended up becoming victims of scams and now wish that they had filed for bankruptcy instead. One such scam that began after the economic collapse of 2008 has resulted in jail time for its “ringleader.”
According to reports, the Florida man and his cohorts in the scheme promised homeowners loan modifications that they apparently never intended to provide. They went as far as to collect payments from the struggling homeowners that were to go toward the allegedly approved loan modifications. A Florida court has found that the company’s actions were fraudulent.
As a result of the court’s ruling, the company’s organizer and operations manager has been sentenced a prison term of 11 years to be followed by supervised probation for three years. The man has also been ordered to pay back over $5 million that he reportedly obtained fraudulently. This ruling comes after two other previous rulings that also found him guilty of mortgage fraud.
Struggling Florida homeowners who are considering a loan modification may benefit from seeking the assistance of legal professionals before signing any agreements. An attorney can examine any loan modification offers in order to determine their validity. In addition, a homeowner may find that he or she would benefit more from filing a Chapter 13 bankruptcy, which can provide foreclosure relief and allow for financial restructuring that will enable the homeowner to keep his or her home.
Source: bizjournals.com, “Boca Raton loan fraud ringleader sentenced to more prison“, Nina Lincoff, Dec. 9, 2014