FBI Probe Forces Shutdown Of Loan Modification Racket?

ProPublica earlier this week published a follow-up to a story (see Why Authorities Haven’t Stopped the Foreclosure ‘Rescue’ Boom) which focused on the antics of one loan modification outfit, Southern California-based 21st Century Legal Services (also known as Fidelity National Legal Services):

• As we reported, four states obtained court injunctions barring the company from operating there, but those actions did little to slow the company down. Since then, however, we’ve learned that the company is under investigation by the FBI.

• Last Wednesday, the FBI executed search warrants at eight locations in the Rancho Cucamonga area, said Laura Eimiller, spokeswoman for the FBI’s Los Angeles office. Both business and residential addresses were searched, she said, but she would provide no other details about the continuing investigation. Kathleen Moreno, the lawyer for 21st Century president Andrea Ramirez, confirmed that Ramirez’s residence was among those searched.

• The FBI searches seem to have finally stopped the company from operating. Its Web site is down, and no one answers the phone. But as for whether its unhappy customers can hope to recoup their money, it’s far too early to tell.

For the story, see The Foreclosure ‘Rescue’ Boom on Marketplace.