New Type of Mortage Fraud: Loan 'Modifiers' Hijack Payments

mortgage fraudIt looks legitimate: You get a letter from your bank saying that it's sold your mortgage to another company. So you begin making payments to the new address in the letter.

But, it turns out, it's yet another mortgage fraud. Two Nevada men have been arrested operating businesses designed to steal mortgage payments from consumers. Joseph Yorkus and James Bartczak were booked on charges in connection with this attempted scam, Nevada Attorney General Catherine Cortez Masto said in a statement.In February, Yorkus and Bartczak were arrested and charged with setting up the business "Great Western Business Services," alleged to have been used to embezzle homeowners' mortgage payments.

Letters sent to homeowners instructed them to make mortgage payments to Great Western rather than Bank of America, which actually owned the loans. The scam caused victims to miss their actual mortgage payments, an action that could lead to foreclosure.

Last week's arrests are based on new allegations that in addition to fraudulently operating Great Western Business Services, Yorkus and Bartczak also ran three other fraudulent companies, "BAC Collections," "Fresh Start Consultants" and "Learn Your Rights," to convince homeowners to pay their mortgages through those businesses.
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Yorkus and Bartczak falsely represented that these companies would assist homeowners in obtaining credit repair and loan modifications, as well as principal reductions, said Masto. Instead the homeowner's payments were diverted by Yorkus and Bartczak for their own personal use, she said. One of the alleged victims, a senior citizen, lost more than $10,000.

"This case is another example of the type of organized, systematic fraud that is rampant in the mortgage and foreclosure rescue businesses," said Masto.

She urges Nevada residents to contact her office if they think they have been involved in a mortgage fraud scam.

The charges against Yorkus and Bartczak are allegations, the attorney general's statement said. The defendants are presumed innocent until or unless proven otherwise in a court of law.

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