California Authorities Apply Heat On Now-Defunct Suspected Loan Mod Racket With "Loose Affiliations" w/ Lawyers; Outfit Took In $20M, Bar Probers Say

In Fresno, California, KFSN-TV Channel 30 reports:

• Last may, we investigated a company called Green Credit Solutions. It sold loan modification services for $3,495 dollars through local brokers. The state bar raided its Southern California offices this past December. Investigators say they uncovered thousands of victims of the loan modification company, bringing in more than $20-million dollars combined.

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• Green Credit Solutions is accused of being paid and doing nothing by hundreds, if not thousands of [homeowners]. The department of real estate gave the company's officers a cease and desist order in June 2009 about a month after the Action News investigation into the company aired. As a result, Green Credit's officers voluntarily surrendered their real estate licenses in the last month.

• In late December, the State Bar searched its offices in Irvine, saying the company did nothing to help clients while also misleading them to believe that services would be performed or supervised by an attorney. "Green Credit Solutions had a loose affiliation with a few lawyers. Never really had a lawyer on staff handling the loan modifications. And the one lawyer they did hire to work with them was a suspended Tennessee attorney," said state bar investigator John Noonen.

• The 6,000 plus Green Credit customers came from sales people, called brokers, all across California; including San Joaquin Real Estate and Financial Services in Clovis. [...] Workers [there] collected the personal information from at least 650 clients and sent it to Green Credit in Southern California. San Joaquin Real Estate was paid between $1,500 to $2,000 dollars per client. That's more than a million dollars since they started in August 2008.

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• The State Bar is collecting the files from Green Credit and seized its assets. The State Bar does not have the authority for criminal charges but can forward the results of any investigation to the proper jurisdiction for prosecution. Action News talked with the Fresno County District Attorney's Office.

For the story, see Loan Modification Scams.