Over the past week I’ve been getting more tips in from consumers that are being approached through fake looking mass joinder H-118 marketing mailers like the one below.
As you can see from the mailer it appears to be a government or official form that appears to proclaim that you may be eligible to stop foreclosure, and seek compensation for damages. Other versions of similar mailers promise to eliminate the mortgage all together or reduce it down to market value. It doesn’t really matter what the claims are, it is important to remember than none of these cases has gone through to completion and that this is an advertising piece.
The goal of this marketing is to sell consumers that might already be in foreclosure, hope that the big bad banks will be made to pay for their sloppy mortgage work. The consumer is hooked with promises they will receive big benefits and made to feel they have a significant chance of winning if they participate.
For the person that received the mailer above, the statements were made in subsequent documents they received they could receive the following benefits:
- Principal loan balance reduced to 80% of current market value.
- Interest rate reduced to 2% fixed for life of loan.
- Counsel has stated they are seeking a complete dismissal of the lien and punitive damages of up to $75,000 per plaintiff. – Source
The person they typically deal with is a salesperson who may claim to work for a law firm or may actually work for one. Over in this article you can hear some calls from one such sales person.
Historically the consumer was told they would have to pay $5,000 to join a “mass joinder” lawsuit against the banks. Lately there has been a new twist. Consumers are not being sold expensive services in advance of ever being admitted to a lawsuit. AVID Law Center is selling “pre-litigation” packages for $4,000 plus $350 per month and now another company calling itself the most generic of names “The Home Retention Division” is selling a pre-admision package for $2,500.
I can find no company registered to do business in California under the name The Home Retention Division and what really struck me was in two different documents I received from consumers just a day apart, the company lists different phone numbers.
In this email I posted yesterday from another sales person to another consumer, the Home Retention Division is listed as an affiliate of Consolidated Litigation Group.
So let’s look at the pitch in The Home Retention Division sales pitch.
From the description offered in the document it appears they are selling a version of the REST report which is supposed to find errors in loan documents.
The Home Retention Division is an Authorized Administrator and Compliance Analyzer and is an industry leading enterprise based solution that provides comprehensive yet cost effective automated mortgage compliance auditing to institutions, service providers and regulators in the residential mortgage industry. A nationwide proliferation of anti-predatory regulations has caused mortgage lenders and banks to shift their regulatory compliance focus from a traditional manual proof to an automated transaction-level approach.
You, the Borrower have completed an application containing various information with the purpose of having a consultation to see if you qualify for a Mortgage Compliance Review (REST report) which is a comprehensive review of your loan to make sure that the guidelines and regulations have been met in accordance with the Real Estate Settlement and Procedures Act, the Truth in Lending Act, and the Home Ownership and Equality Procedures Act.
The purpose of having a consultation is to make sure that you are not a victim of predatory lending, or any number of fraudulent, deceptive, discriminatory or unfavorable lending practices. Many of these practices are illegal, while other are legal but not in the best interest of the borrowers. The Lender in many cases will typically be required to reduce the interest rate on the loan or extend the term of the loan. Typically the new loan is less than the existing outstanding loan amount and the difference is forgiven by the lender. After completing the consultation, a fee for the completion of the Mortgage Compliance Review (REST report) may or may not be assessed. If and only if, we find violations of the law is a fee is assessed to perform the Mortgage Compliance Audit. The Home Retention Division affiliate Compliance Analyzer will provide a complete copy of the actual Mortgage Compliance Review (REST report) which will be used to litigate your loan directly or you may opt to retain an attorney to litigate new terms as part of a mass joinder case. – Source, Source
The company then goes on to provide a written agreement the consumers is asked to sign. The service provided under this agreement is “Client wishes to employ The Home Retention Division to perform a Mortgage Compliance Review (REST report) on Client’s current loan documents” and for this service the consumer will pay:
We offer a 100% money back guarantee. If we find your loan documents have zero failures, irregularities, violations, etc. we will issue 100% of your money back.
The money back guarantee is nearly worthless since the vast majority, if not nearly all, of documents examined will have some small error. Even the slightest error found will eliminate any refund available.
But even then, there is a catch. Apparently not all the money will be refunded.
Client authorizes charges to pay Mortgage Compliance Review (REST report) fee, which is non-refundable except as provided in the Client Agreement. Client will be furnished with a full Mortgage Compliance Review (REST report)and if there are no violations found in any 267 points of Review, then client will be refunded 100% of all fees paid, less a processing fee of $______. Client also understands there is no refund due if any violations are found on any of the 267 points of Review.
Of the two agreements I have, neither has this processing fee amount filled in.
And then there is this matter of HLH. In the final page of the agreement the consumer is given the option to pay the ridiculous fee by an automated draft from their bank account. But the draft will be taken by HLH.
Who the hell is HLH? I don’t know but what I do know is if we go all the way back around to the original mailer we find the only other mention of HLH in this whole sales process.
In my research the most likely explanation of who this is comes back to HLH Group, LLC. HLH Group, LLC has a location in Santa Ana, CA. Active officers include Rudy Artavia and Michael Tapia. HLH Group, LLC filed as a Domestic on Thursday, September 04, 2008 in the state of California and is currently active. Rudy Artavia serves as the registered agent for this organization.The company’s line of business includes Loss Mitigation.
A commenter online had this to say about a recent HLH marketing pitch he received. Sound similar?
I received a mailing that appeared to be a official court document regarding my mortgage. After calling a few times in a few days I finally got a person. He introduced himself and told me a story about my mortgage company committing fraud and how it got picked up by a larger bank and how now that larger bank is now committing fraud with monies received by the Obama administration fro mortgage modifications and that if I go with them they will get my mortgage down to some unheard of amount and interest rate and the bank will be sued in court by their powerful lawyers. He pre-qualified me by asking me if I have ever submitted application for loan modification before with my current loan institution. I have not. He said this was good. BUT!! in-order to get this all in to motion I needed to send them $2300 as soon as I can. Oh and it was refundable if for some reason his lawyers failed I guess. He wasn’t too clear on the refund part (of course.) So I am already aware of CA state law that it is illegal to ask for upfront moneys to modify a home loan. On the letter it was so deceiving that it read “seeking $75k in damages per individual! Seek compensation for damages!” what a lure uh? BEWARE! – Source
My advice is to stay as far away from this as you can. If you get approached with a sales pitch like I’ve covered above, RUN AWAY!
If you are approached with this sales pitch the California Bar wants to hear from you.