State accuses broker of failing to complete loan modification work
| Tuesday, Sep 08 2009 07:13 PM
Last Updated Tuesday, Sep 08 2009 07:15 PM
For information on the what loan modification marketers can and cannot do under the law, check out the California Department of Real Estate's consumer information page:
www.dre.ca.gov/cons_protect.html
or call the DRE's Fresno district office at (559) 445-5009.
The California Department of Real Estate has filed a complaint against a local real estate broker, accusing him of accepting money to provide loan modification assistance and then failing to perform the work.
The state also accused Joseph D. Speakman of Castle Home Loans of accepting fees for loan modification services up front in violation of state law.
Speakman admits that a state audit uncovered six cases in which there was insufficient documentation of services performed, but vehemently denied taking clients' money and doing nothing to earn it.
"I'm outraged," he said. "You can't say, 'You didn't do all the paperwork, and therefore you're a thief.'"
The state reviewed more than 100 cases, Speakman said, and only found a few that weren't fully documented as having been completed even though all of the clients got an offer from their banks.
Speakman showed a reporter case logs that he contends are proof that his staff spent hours lobbying banks on clients' behalf.
Some of those clients chose not to accept their bank's offer because they objected to the terms, such as reducing the monthly payment but not the principle, Speakman said.
The state contends none of the six clients named in its complaint, filed June 29, obtained "a successful and sustainable loan modification" or any other benefit from Speakman in return for their fees.
Only one of the clients named in the complaint could be reached for comment.
Out-of-work oil field worker Daniel Socorro, 45, said he's not certain whether Castle ever contacted his bank, but it may have. The real estate company offered him a deal at one point at an interest rate that Socorro considered too high, so he passed on it.
Today, he's as bad off as he was before he paid $495 for help modifying his mortgage, and he expects to lose his home.
"As far as I'm concerned, they didn't do anything for me," Socorro said.
But even if Speakman did what he said he would do, "It doesn't matter either way because he's still out of compliance for collecting advance fees," said department spokesman Tom Pool.
Under state law, only those brokers who have been granted special permission to do so may collect fees for loan modification services before completing their work.
To protect consumers, clients usually put fees in an escrow account to be collected only after the deal is done.
Speakman did get permission to charge up front in a so-called advance fee contract effective in April of this year, but the six cases at issue in the complaint were initiated last year, Pool said.
Speakman said at the time, he thought he was in compliance because he was collecting from clients after having performed the same amount of work required under the advance fee contract.
After Speakman learned the state considered him in violation, he immediately obtained the required permission and has operated with it ever since, he said.
The state says Speakman's violations are cause for suspending or revoking his license, and the complaint orders him to cease and desist from the alleged conduct until a hearing before an administrative law judge.
The hearing is tentatively scheduled for Dec. 17 in Fresno.
