Effort To Reign In Loan Modification Rackets "A Giant Game Of Whack-A-Mole"?

ProPublica reports on the difficulties authorities around the country are having reigning in loan modification rackets, and shines light on one firm that continues peddling its services, despite a flood of homeowner complaints and a number of legal actions brought by various state authorities:

• In a giant game of whack-a-mole, law enforcement agencies at all levels across the country have filed suit against 150 such companies, but they continue to proliferate, and the number of consumer complaints continues to rise. “This is a very big scam,” says California Attorney General Jerry Brown. “They’re all over the place, and as soon as you get one, they migrate to somewhere else.”

• The case of one particularly aggressive firm, 21st Century Legal Services, shows just how ineffective authorities’ moves against the companies often are. Four states have sued 21st Century, and at least three more have open investigations. Over 150 consumers from more than 30 states have filed complaints against 21st Century with the Better Business Bureau. No active firm has more complaints.(1)

• Yet the company forges on. Operating under a new name, Fidelity National Legal Services,(2) it continues to solicit consumers nationwide, even in states where authorities have won court injunctions.

For more, see Why Authorities Haven’t Stopped the Foreclosure ‘Rescue’ Boom.

Go here to read the internal emails and documents related to this story.

(1) An undercover tape (MP3, transcript), made by the North Carolina attorney general’s office shows a 21st Century salesman in action.

(2) Reportedly, Fidelity is registered at the same address as 21st Century. Its pitch letter to consumers (see pages 4 & 5) is identical to 21st Century’s. It even appears to share the same employees.