Scottsdale Mortgage-Relief Firm Hit with $29 Million Judgment in Loan-Modification Scam
A Maricopa County Superior Court judge entered the default judgment this week, ordering Prehoda and Belevan to reimburse fees and a civil award to 2,495 people who went to the men's company -- Guardian Group -- to reduce the principal amount of their mortgage loan.
Guardian Group claimed it would negotiate with lenders to buy a homeowner's mortgage note way below face value, and then turn around and sell it to a third-party investor.
For the price of $1,595, Guardian Group would reduce the loan principal to 90 percent of a home's current market value -- we say "would" because those third-party investors never really existed.
Out of the 2,500 people paid the up-front fee of $1,595, only five managed to receive a new mortgage note at 90 percent of their old loans.
After collecting nearly $4 million from hopeful homeowners, Guardian Group was shut down by the Arizona Department of Financial Institutions in May when it was discovered that the firm was never actually a licensed mortgage broker.
Then hundreds of complaints from homeowners swindled by Guardian Group began to roll in, and the Arizona Attorney General's Office filed suit.
Now Prehoda and Belevan are ordered to repay the $1,595 fee to each of the 2,495 customers, in addition to the maximum civil penalty of $10,000 per client, bringing their total payment to just under $29 million.
In a statement from the AG's office, Robert Charlton, assistant superintendent of the Financial Institutions department, says loan modification scams "have plagued our communities in recent months," and Arizona consumers "can least afford this type of predatory activity."
The AG's office asks anyone who's been charged an up-front fee for mortgage-relief services or thinks they've been a victim of a foreclosure rescue scam to contact it.