State Regulator Seeks $50K Fine Against Suspected Las Vegas Loan Modification Racket For Allegedly Playing Fast & Loose With Clients' Trust Funds

In Las Vegas, Nevada, the Las Vegas Sun reports:

• The state is seeking to levy a $50,000 fine against a Las Vegas couple in the foreclosure and loan modification business, accusing them of mishandling their clients’ money. The state Division of Mortgage Lending has filed a complaint to revoke the license of Jeff and Gail Strum, operators of US Loan Modification Services, [...].

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• Under a 2009 law, [foreclosure] consultants are allowed to collect their fees up front and install them in a trust account. They were authorized to take the money out as they performed the service. An examination of the business found the money the Strums collected wasn't placed in a trust fund in a licensed bank or credit union as required by law. They also failed to keep records for each homeowner. The couple is accused of co-mingling these funds and using the money for their personal affairs without an explanation of how it was spent.(1)

For the story, see State seeks $50,000 fine against Las Vegas couple in loan business.

(1) If the allegations are true, this duo should consider themselves lucky that criminal prosecutors aren't breathing down their necks, charging them with the crime of misapplication of entrusted funds/theft by misapplication (or some similar-sounding charge), which happens to be a felony in many places. See, e.g., Former Laywer is Sentenced for Forgery, Contempt of Court and Misapplication of Entrusted Funds, where, among other things, two settlement checks ($24,998.17; $7,500.00) belonging to clients of a now-disbarred New Jersey attorney (who practiced law for 30+ years) somehow found their way into the latter's personal bank account, as opposed to his trust account (in violation of New Jersey Supreme Court Rules) which resulted in the exposure of those funds to a substantial risk of loss.