A “huge” number of mortgage fraud-related complaints are being filed against attorneys and law firms, according to the American Bar Association. And some of these questionable attorneys have tried to enlist unsuspecting Notaries into helping defraud victims.
Approximately 24 percent of the mortgage fraud-related complaints received by the Washington, DC-based Lawyers’ Committee for Civil Rights Under the Law involved attorneys or law firms.
Laura Ernde, Acting Communications Director for the California State Bar, said her organization has received more than 11,000 mortgage-related complaints against attorneys in the past three years, with the most common complaints being loan modification scams. In loan modification scams, typically the attorney or a representative offers distressed homeowners help in modifying the terms of a mortgage, but takes money from the victims without delivering real help. “The clients pay fees but don’t get any services and often end up losing their homes,” Ernde said.
The ABA described the proliferation of complaints as a “disturbing trend” because lawyers are sworn to uphold the law and add legitimacy to transactions. A number of states — including Georgia, South Carolina and Massachusetts — require the presence of attorneys instead of Notary Signing Agents at home loan signings.
Notaries have contacted the NNA about attempts by dishonest loan modification companies to hire them under false pretenses in order to make mortgage scams look legitimate. The scammers typically hire Signing Agents to collect advanced fees from customers for loan modifications or to notarize “loan assistance documents” and then take the documents away from a signer without leaving any copies.
Ernde warned all Notaries to avoid any job offers that require collecting an advance fee for loan modification services from a customer — this practice is banned in several states including California.
If you are contacted by an attorney, law firm or other business that offers “loan modification” assignments involving advanced fee collection or any other suspicious or unusual requests, refuse any such offers and contact local law enforcement or your state Attorney General’s office to report it.
David Thun is an Associate Editor at the National Notary Association.