Loan mod bandits

House Keys

"DONT LET YOUR LENDER TAKE YOUR MONEY! MODIFY YOUR HOME LOAN TODAY!"

That was the slogan — in large capital letters and sans the necessary apostrophe in the first word — that loomed on a billboard over Century City, a tony neighborhood near my home in Los Angeles.

The billboard showed a masked bandit dressed in black-and-white prison stripes and a knit cap. On his back was a banker-style moneybag, complete with a big dollar sign on it. The bandit was caught in a spotlight and, just in case anyone missed the point, a big arrow with the words "YOUR MORTGAGE LENDER" pointed to the bandit’s head.

Century City is a small, decidedly high-rent district snuggled between Beverly Hills and West Los Angeles. The area’s most prominent feature is an open-air shopping mall with a Bloomingdale’s department store, a multiplex movie theater and an upscale food court that hands out stainless steel cutlery instead of the usual plastic utensils.

The billboard was positioned along the eastbound approach to the shopping mall on a major boulevard that was once part of the famed Route 66. It occupies on one of the rare vacant weed-infested lots in the area next to a half-built parking structure.

Caught in the act of thievery, the bandit on the billboard was clearly meant to appear sneaky and menacing. But the sign was incomprehensible. Sure, lenders made a lot of lousy loans, and yes, a lot of homeowners were hurt by those loans whether through their own greedy behavior or because they’d been victims of financial predators.

But how did that result in a sign that said, "Don’t let your lender take your money?" Huh? How could that possibly make any sense? And what was the connection (if any) to loan modifications?

The second billboard was located 5.4 miles away on a major boulevard in a tiny pocket of Los Angeles, just north of Culver City. There is no Bloomingdale’s in this part of town. Instead, the billboard loomed over a corner strip mall that contained a nail salon, dentist’s office, donut shop, children’s resale clothing store and ethnic restaurant.

This billboard didn’t feature the bandit/lender character, but it had the same telephone number, the same "Available 24/7" verbiage, and the same big capital letters, which read: "DON’T DELAY. MODIFY YOUR HOME LOAN TODAY!" It also had a new feature: a Better Business Bureau shield.

As a homeowner, I was dismayed to discover these billboards within a few miles of my home. House prices have declined here as they have elsewhere, and there are no doubt some short sales and foreclosures in the area, but the pain has been mild compared with the experience of communities in harder-hit parts of California. …CONTINUED

I wondered what these alarming signs portended: Had our housing market deteriorated so much that large numbers of my neighbors were in urgent need of loan modification services? Or had someone simply decided to advertise such services in places where many homeowners still had money, jobs and equity, but might be persuaded to believe that they, too, deserved a loan modification? Moreover, was the company behind the billboards legitimate or a scam?

The U.S. Federal Trade Commission and 23 state attorneys general have prosecuted 178 companies nationally for deceptive marketing practices related to loan modification and foreclosure rescue services. One company in Southern California allegedly spent $70,000 a week on radio and television ads, but helped only about 300 of 3,000 homeowners, who paid as much as $1,000 or more in upfront fees for assistance, according to a report by a court-appointed receiver that has taken over the company.

Being curious, I called the telephone number on the billboards. I expected to hear a recorded message from a bankruptcy law firm, an aggressive mortgage company, or maybe even a misguided housing counseling outfit. Instead, my call was connected to a prerecorded message that said the number was no longer in service and no further information was available.

A search for the number in online search engines and telephone directories turned up no relevant results, so the company behind the billboards remains a mystery. But still I wonder: Did any of my neighbors take the bait? And the question remains: Who are the real bandits?

Marcie Geffner is a veteran real estate reporter and former managing editor of Inman News. Her news stories, feature articles and columns about home buying, home selling, homeownership and mortgage financing have been published by a long list of real estate websites and newspapers. "House Keys," a weekly column about homeownership, is syndicated in print and on the web by Inman News. Readers are cordially invited to "friend" the author on Facebook.

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