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Home · Property Management · Financing : Man Sentenced for Loan Modification Scam

newspaperA Maryland man was sentenced to one year and a day in prison for defrauding thousands of homeowners in a $4 million nationwide home loan modification scheme.

According to an announcement from the Department of Justice, the 37-year-old pleaded guilty to one count of conspiracy, nine counts of mail fraud and nine counts of wire fraud.

Operating under the name Home Owners Protection Economics Inc., he was accused of making a series of misrepresentations to induce struggling homeowners to pay HOPE $400 to $2,000 in up-front fees in exchange for HOPEs help obtaining federally funded home loan modifications. He was one of HOPEs more successful salespeople, receiving approximately $24,000 after arranging fraudulent home loan modifications totaling approximately $180,000.

Also, according to court documents, he and others misrepresented that, with HOPEs assistance, the homeowner was guaranteed to receive a loan modification under the Home Affordable Modification Program (HAMP), which is part of the Troubled Asset Relief Program (TARP) and is a federally funded mortgage-assistance program. For example, the defendants routinely claimed that the homeowner had already been approved for a loan modification, provided phony approval codes, quoted new (and wholly fictitious) mortgage terms and due dates, touted their 98 percent past success rate and claimed that they were underwriters or were otherwise affiliated with the homeowners mortgage companies. HOPE also claimed that it would offer homeowners refunds in the unlikely event that they did not receive a loan modification.

According to court documents, in exchange for the up-front fees, HOPE sent its customers, including homeowners in Massachusetts, a do-it-yourself application package, which was virtually identical to the application that the government provides free of charge. The HOPE customers had no advantage in the application process, and, in fact, most of their applications were denied. Through these misrepresentations, HOPE was able to persuade thousands of homeowners to pay more than $4 million in fees.

Two other men also were convicted after trial and were each sentenced to serve 84 months in prison. A fourth pleaded guilty and was sentenced in February to serve a year and a day in prison.

The case was investigated by SIGTARP, and prosecuted by Justice Department’s Criminal Divisions Computer Crime and Intellectual Property Section, and the U.S. Attorney’s Office in the District of Massachusettss Computer Crimes Unit.

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