THEY ONCE WERE LENDERS… Why the government still can't stop ex-subprime bankers or scammers from destroying homeowners
By martin andelman
I
n the fall of 2008, news stories about “scammers” taking advantage of homeowners at risk of foreclosure started appearing frequently in the media. I remember watching a prime-time news magazine program, I think it was 20/20, that was airing a story about a shady looking middle-age man in Denver, hurriedly walking from a small, strip mall store front to his car, his hand covering his face, as a reporter tried to ask him questions that he obviously did not plan to answer. The story involved a company that had charged a handful of homeowners several thousand dollars to help them get their mortgages modified. The core message being delivered by the show’s host was that the homeowners had been victims of a scam because, as a couple of homeowners interviewed were saying, their loans had not yet been modified. I remember wondering how in the world such a story had become the subject of a national television program. I mean, “Three homeowners get ripped off by small business in Denver,” is not usually the sort of event that makes national headlines. The clear implication was that this case was emblematic of a widespread problem, but nothing further was offered in the way of proof… no statistics, no additional facts… just statements about how homeowners should NEVER pay anyone up front to help them get a loan modification