NDS PRESS

Mortgage scammers targeting refinance customers: Portage resident warns against con

Sun, 13 Jun 2010 08:26:43 -0400

By Mike Sever

Record-Courier staff writer

Sally wasn’t behind on her mortgage and wasn’t in danger of foreclosure. She was just looking to refinance her mortgage and save a few dollars.

What the Portage County homeowner got was a $2,600 loss and an education in the latest scam. Sally’s not her real name. She doesn’t want to be identified, but does want to share her story as a warning to others.

“I was trying to be proactive. — either finance this house or get rid of it,” she said.

“It’s the new game for scammers,” said Dave Vaughan, executive director of Neighborhood Development Services in Ravenna.

Foreclosure rates have skyrocketed in Ohio in recent years. The county’s rate grew from 143 foreclosure filings in 1995 to 935 last year. In the first quarter of this year, there were 297 foreclosures filed in Portage County.

Scammers work in different methods, Vaughan said.

“Web sites, television ads, some are setting up shop as legitimate-looking counseling agencies,” he said.

“They are preying on desperate people,” Vaughan said. The most common approach is by mail and Internet.

That’s how Sally got hooked. She is in the process of a divorce and “upside down” on her mortgage — owing more than the house is worth — due to refinancing a few years ago to pay off credit card debt.

One night after a Google search for mortgage modifications she found a link that talked about “Obama’s Plan.”

“I clicked on that. It asked for basic contact information,” she said.

She got an e-mail a few days later, but didn’t reply.

“I actually had another company call. I saw that was a scam right off.”

When she did call the other company, she talked with a woman at Liberty Law Firm in Irving, Calif.

Sally said Shonda “is just the consummate con artist. She said she was a Christian lady, divorced, she was sympathetic to my situation.”

“Their big seller was Shonda. She was very sympathetic,” Sally said.

Conversations over a few weeks resulted in a promise of a big reduction in Sally’s house payment, but for a fee. Sally paid $1,750 up front and was to make two additional payments of $875 each by automatic withdrawals from her account.

Sally got nervous when the second payment was taken three weeks early.

“They had changed that on the paperwork and I didn’t catch it. That gave me the tip off this wasn’t on the level,” she said.

Sally made multiple calls that weren’t returned, phones were out of order and e-mails went unanswered. When she did get through, she said she got reassurances but no answers and no money.

Sally said she wants others to learn from her mistake.

“I got into this with no expectation. If I get (all the money back) or any of it, that’s great. But I’m on a mission now” to inform people, she said.

All of what Sally experienced are classic signs of a scam, Vaughan said.

“The first tip is never, ever pay for foreclosure modification counseling,” he said.

There are other warning signs, such as “guarantees” of loan modifications, pressure to sign paperwork before its read and understood, or the scammer asking for detailed financial information over the phone.

Most would seem to be common sense. But, as NDS spokeswoman Erica Sadaj said, “common sense goes out the window when you’re desperate.”

Sally was one of 30 people who signed up for NDS’ foreclosure prevention and mortgage modification clinic last week in Ravenna.

The clinic was part of a series done by housing nonprofits around Ohio to educate Ohio homeowners on the latest scams. They are part of the NeighborWorks Collaborative of Ohio, the only statewide foreclosure rescue fund and prevention initiative in the nation.

People should check out the HUD.gov website for links to legitimate counseling services, Vaughan said.

Sally said she went to the NDS clinic to try to get real help this time.

“Hopefully, they’ll be able to help me. Either they’ll do what they can or point me in the right direction,” she said.

Warning signs you may be dealing with a loan modification scammer:

1. A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage.

They may pocket your money and do little or nothing to help save your home.

2. A company/person guarantees they can stop a foreclosure or get your loan modified.

Nobody can make this guarantee. Legitimate, trustworthy HUD-approved counseling agencies will only promise they will try their very best to help you.

3. A company/person advises you to stop paying your mortgage company and pay them instead.

You should never send a mortgage payment to anyone other than your mortgage lender. The minute you have trouble making your monthly payment, contact your mortgage lender.

4. A company/person pressures you to sign over the deed to your home or sign any paperwork you haven’t had a chance to read, and you don’t fully understand.

A legitimate housing counselor would never pressure you to sign a document before you had a chance to read and understand it.

5. A company claims to offer “government-approved” or “official government” loan modifications.

Contact your mortgage lender first. Your lender can tell you whether you qualify for any government programs to prevent foreclosure. Remember, you do not have to pay to benefit from government-backed loan modification programs.

6. A company/person you don’t know asks you to release personal financial information online or over the phone.

You should only give this type of information to companies you know and trust, like your mortgage lender or a HUD-approved counseling agency.

Ravenna Businesses Seek Loans for Facade

Fri, 11 Jun 2010 09:01:43 -0400

By Diane Smith

Record-Courier staff writer

Three Ravenna businesses have applied for facade loans to fix up buildings in prominent parts of the city.

The historic Phenix Building at Main and Chestnut streets, City Gardener and Florist on North Chestnut Street and a furniture shop proposed at the corner of West Highland Avenue and Cleveland Road all are seeking loans to improve their buildings.

Jim Shank of Neighborhood Development Services said City Gardener and the furniture store can start work any time. However, John Apaydin, owner of the Phenix Building, is still awaiting clearance from the state on historic issues.

City Engineer Bob Finney said the historic review is necessary because state and federal funds are used for the revolving loan program.

Shank said the money is being loaned at a reduced interest rate of 6.25 percent, which is “pretty cheap money.”

“But they make them work for that cheap money,” he said.

Apaydin has requested a loan of $61,525, less than half of what he paid for the structure itself, for several improvements to the building.

The block includes three buildings, two on North Chestnut Street, and the structures have a combined total of 52 windows. Apaydin plans to replace all the windows, mimicking the historic appearance the windows once had, as well as repairs to the brick and historic signage.

He also plans to put the original mahogany doors back on the building, Shank said.

“He wants to replicate what Home Savings did across the street,” he said, referring to the bank’s renovation of the Riddle Block building it leases from the county.

At City Gardener and Florist, owner Paul Moore plans to invest $27,810 in a roof, gutters and signage. The building, a renovated house, is one of the older structures in the area, and has two layers of shingles on its roof.

A former gas station at the corner of West Highland Avenue and Cleveland Road is slated to be turned into a furniture store by owner Alan Balog, a retired teacher with the Ravenna City Schools. Balog plans to restore antiques and high-quality furniture.

Shank said the parking lot has been damaged by vehicles using the property as a shortcut, so Balog is planning to do landscaping and improvements to the parking area. He also plans to do repairs and improvements to the plaster facade, and to replace six windows. The total loan amount is $14,000.

“It’s on one of the major arteries into town, and it’s in a prominent location, so you notice it,” Shank said. “It’s kind of a neat building.”

Apaydin already has had his plans reviewed by the city’s Design Review Commission. The other two businesses are not required to do so, because neither structure has frontage along Main Street, Finney said.

High Foreclosure Rates Bring Out Those Taking Advantage of Homeowners

Wed, 9 Jun 2010 14:53:21 -0400

Foreclosure rates remain high. Current numbers
show nearly 94,000 foreclosures in Ohio alone.

Homeowners desperately trying to hold on to their
homes may find themselves being taken advantage
of by those seeking to bilk money out of those just
when they need help the most.

Dave Vaughan, Executive Director of Neighborhood
Development Services was a guest on Channel 3
News Wednesday morning.

In this interview he talks about what need to watch
out for to avoid being ripped off.

© 2010 WKYC-TV

Housing advocates warn borrowers

Wed, 9 Jun 2010 08:47:43 -0400

Housing advocates warn borrowers

By Rick Armon
Beacon Journal staff writer

POSTED: 09:26 p.m. EDT, Jun 09, 2010

Housing advocates warned Wednesday that mortgage rescue scams are on the rise in Ohio, particularly against minorities, the elderly and others struggling to pay their monthly bills.

The scams, spurred by the continuing foreclosure crisis, range from phony government programs to demanding money upfront for help and then not delivering it.

Nonprofit housing groups throughout the state held special events during ''Ohio Alert Day'' to warn homeowners to avoid crooked deals.

The East Akron Neighborhood Development Corp. went door to door in the city handing out materials for about an hour Wednesday afternoon. The group also set up a booth all day at Dave's Supermarket in the Middlebury Market Place retail plaza to talk with residents.

In Ravenna, Neighborhood Development Services and the Portage County Prosecutor's Office conducted a four-hour scam and foreclosure prevention clinic.

Similar events, sponsored by NeighborWorks America in Washington, D.C., took place in Cincinnati, Cleveland, Dayton, Springfield and Toledo.

''This is such an important issue now,'' said Fred Vaughn, deputy director of East Akron Neighborhood Development. ''The scams have increased as the number of mortgage lenders are doing more loan modifications.''

He and Tiffany Shelton walked along Davies Avenue in the rain and knocked on doors to chat with homeowners. They carried yellow fliers — one that screamed ''Loan Modification Scam Alert'' and directed people to the Web site http://www.loanscamalert.org.

It also warned people to avoid groups or companies that ask for fees in advance, guarantee that they'll stop a foreclosure or modify a loan, or tell a homeowner to stop paying a mortgage company and pay them instead.

Advice from residents

Davies Avenue resident Pat Marusiak appreciated the face-to-face contact and said it probably will help some people, although she quickly added that she'd never fall for such a scam.

''There are people who buy into anything,'' she said. ''Where's your common sense?''

Akron resident Thad Felding picked up materials at Dave's Supermarket. His advice for people in trouble is to seek out other opinions.

The initial wave of housing problems involved predatory lending and then scammers moved on to employment-related cons, said Dave Vaughan, executive director of Neighborhood Development Services. Now, those scam artists have moved on to loan modifications because of President Obama's Home Affordable Modification Program, which offers financial help for struggling homeowners.

''We had not seen them here for a while,'' Vaughan said. ''They had been reported in other states and now we are seeing them here on a much more regular basis.''

The biggest scam involves companies or counselors asking for an upfront fee for help. Counseling groups approved by the U.S. Department of Housing and Urban Development do not charge a fee for assistance, Vaughan said.

Sometimes, a group will ask for $1,500 to start negotiating with a mortgage lender, then never follow through.

Other scams involve guarantees to stop a foreclosure or to modify a loan, pressure to sign over the deed to the home, claims about ''government-approved'' or ''official government'' loan modifications, and requests to release personal financial information.

Vaughan cited one case in which a homeowner refinanced her home but the mortgage lender never paid off the first loan, leaving her with two payments. That case is headed to the prosecutor's office, he said.

''Never pay for assistance,'' Vaughan said when asked what his top advice is for struggling homeowners. ''And second, make sure whoever you deal with is a HUD-approved counseling agency.''

Help is available

For more details, contact East Akron Neighborhood Development's Center for Homeownership at 330-724-0244 or http://www.eakronndc.org. Neighborhood Development Services can be contacted at 330-297-6400 or http://www.ndsohio.org.

Rick Armon can be reached at 330-996-3569 or rarmon@thebeaconjournal.com.

OUR VIEW: Ravenna site a real deal for NDS and Klaben unit

Sun, 2 May 2010 10:16:08 -0400

**as printed in the record courier

Neighborhood Development Services and the Klaben Property Management, LLC, appear to have made an excellent buy in their acquisition and divvying up of more than six acres on Ravenna's East Main Street that once hosted Roger Chevrolet and was the longtime home of Havre Chevrolet.

Appraised at more than $1.6 million in 2008, the property failed to find a buyer after four sheriff's sales, the minimum bid progressively declining with each sale. NDS then came forward with an offer of $252,000 for the building and surrounding 3.5 acres, with Klaben Property Management LLC putting up another approximately $100,000 for the three acres of adjacent vacant land that went with the property.

In other words, the two parties together paid about 25 percent of the appraised value in the acquisition.

Having opened Ravenna Auto Sales on property that once housed Cusack Ford, the Klaben purchase puts that company into a good position to expand if it wishes. Although the new car business on Ravenna's auto mile has taken a hit in the consolidation of the industry and then the recession, there are indications that used car retailing, which has taken on a more robust life in the last couple of years, can do well on East Main Street, keeping hopes for a rebounding auto strip alive.

NDS apparently has three potential tenants, one of whom is Portage County, whose commissioners are weighing the advantages of combining the county's motor pool and storage of its EMA equipment and building an impound lot for the sheriff's office, all of which probably will not be decided at least until after Tuesday's primary. If that is going to occur, it should certainly be well explained to the public.

If the county opts not to lease, NDS says it has two other possible tenants, so with the low purchase price the agency for now appears to be in a good position.

There is much hand-wringing when purchases like this occur, a wish that traditional private entrepreneurs would step forward to keep the property productive and in the private sector. If the money in the private sector were available that is, indeed, what would happen. Except for the Klaben family, however, no private operator apparently made a credible offer to buy. Hats off to the Klabens for seeing opportunity and stepping up to the plate.