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Apr 27, 2007 2:44 am US/Pacific
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David Goldstein Investigates Foreclosure Trouble
by David Goldstein
(CBS)
"I'm in so much trouble"
It's a call for help.
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"Are you going to get me out of this foreclosure thing?"
A desperate homeowner looking to save her house...
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"They can keep me in my property? Yes?"
But will it work and is it legal?
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"There's no way to help her out. You were going to falsify documents and charge money up front, which is illegal."
We set up hidden cameras in this house in Whittier. The real homeowner is facing foreclosure. That information is made public so she has received hundreds of flyers from people offering to help.
But we hired this actress to pose as the homeowner and watched her from the back room as we invited foreclosure experts in to hear their pitch. ¤
"What do you want to do. Do you want to save your property? Of course, yes I do."
Lupita Hernandez says she could help stop foreclosure.
"Can you promise me this can work? Yes."
Her idea was to pump up our homeowners income in order to get a new loan.
"We can say you have rental income. I know you don't have rental income, right? I see."
Our homeowner says she only makes $900 a month in Social Security but Lupita has an idea.
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"We can say you make $900.00 a month social security and we say $1500 a month rental income, which is not true but we put it that way."
"Because if I say – if I tell the truth – Mrs. Contereas is only making $900 a month – no way you can save your property. Do you have rental income from other people? No I don't."
In the back room I was watching with Hernan Vera, an attorney and expert on foreclosure fraud.
"That is loan fraud and it's a common way for unscrupulous brokers to defraud the bank by inflating the income."
But Lupita proposes to do it for a free.
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"2200.00. Yes. $1100 up front and $1100 within a month"
According to the law, foreclosure consultants aren't allowed to collect any money upfront. ¤
"I'm David Goldstein with CBS 2 News"
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"Do you know it's illegal to charge money up front for foreclosure help?"
"No."
"Its is. You're charging $1100 up front and that's against the law."
"You're ready to falsify – saying rental income to falsify the bank, weren't you?"
"Let me go."
Lupita left, but she wasn't the only foreclosure consultant to bend the rules.
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"What can you do to help me?"
Anna Alkiezar and her associate suggested they could postpone foreclosure.
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"Do I have to pay you a fee for anything?"
"Yes we have a fee."
"What is that?"
"It's a thousand dollars to start and a thousand dollars in a month."
Remember – charging money up front is illegal. But it was right there on their contract.
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"I'm David Goldstein CBS 2 News"
When I questioned them they denied it.
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"You see how many times she asked if we were going to take money and I said no."
"Oh no ma'am. We have three cameras, and I can play it back for you."
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"So you're asking for a thousand dollars up front? "
"OK maybe you're right about that – but the reason we do that is because we do work on those files."
But the law says whether you do the work or not, you can't charge up front and falsifying documents is illegal.
"You were going to fake that she had rental income and try to help her out weren't you?"
(© MMVII, CBS Broadcasting Inc. All Rights Reserved.)