The number of U.S. homes that receiving an initial default notice rose 33 percent in August from July. That increase represents the biggest monthly gain in four years, according to RealtyTrac.

“This is really the first time we’ve seen a significant increase in the number of new foreclosure actions,” says Rick Sharga, a senior vice president at RealtyTrac. “It’s still possible this is a blip, but I think it’s much more likely we’re seeing the beginning of a trend here.”

The uptick in foreclosure activity follows after months of a slowdown in foreclosures, which started last fall, with banks reviewing foreclosure policies and paperwork after facing lawsuits and criticism over how they processed foreclosures. Some banks even temporarily halted their foreclosures as they more carefully reviewed pending cases. The slowdown was also blamed on court delays in some states.

Often termed “shadow inventory,” the Csira Group believes that having the lenders take action on these non-performing loans is the only way the market will reach a bottom and allow prices to begin coming back up. As always, we are here to answer questions regarding the foreclosure process and to serve all of your real estate needs.

By simply changing their sales pitch to: “You got a raw deal. Now we can help you out because we understand your lender,” these firms are obtaining up-front fees as high as $3,500, but rarely producing any results. Despite making promises of relief to homeowners desperate to keep their homes, for-profit loan modification firms often fail to deliver, according to a recent New York Times investigation. There are currently more than 650 complaints filed with California’s Better Business Bureau against just one company in Los Angeles, FedMod.

A New Mission
FedMod is among dozens of similar companies that have been accused by state and federal authorities of fraudulent business practices. The FTC is currently in litigation with FedMod and has brought action against 74 other companies as of this writing.

Most of these companies previously operated as mortgage brokers. Since October, the California Department of Real Estate has ordered 210 busiensses and individuals to stop offering loan modifications or foreclosure prevention services, because they lacked a real estate license, as required by the State.

Testimony from employees of FedMod suggests that the single goal of these companies is to get the money in upfront and not worry about actually performing the service. One employee stated: “I had people calling me crying, and we’re telling them “You can pay me or lose your house.” People were giving me their last dime, and opening credit cards to make the payment. But I never saw one client come out of it with a successful loan modification.”

There are plenty of non-profit organizations set up to assist distressed homeowners. Please call the Csira Group for information on how to contact a trustworthy source.

For a list of companies in California who have been targeted by the California Association of Realtors, click this link: http://www.dre.ca.gov/cons_drs.asp

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