Business Blog

Washington state files charges against two mortgage loan companies

Here's a news release from DFI about a couple of companies possibly operating loan modification schemes. Neither are based in Washington, but may have done business in the state:

OLYMPIA – The Washington State Department of Financial Institutions Consumer Services Division today filed actions against two companies for operating unlawful mortgage rescue or loan modification schemes that scammed consumers into paying large upfront fees but did nothing to help them stay in their homes and avoid foreclosure.

The actions are part of a joint federal-state sweep by the Consumer Financial Protection Bureau, the Federal Trade Commission and 15 states targeting scam operations that prey on delinquent homeowners or those facing foreclosure.

Mortgage rescue scams target struggling homeowners and, for an upfront fee, promise to save their homes by negotiating lower mortgage payments with the homeowners’ lenders. But after collecting upfront fees, these scam operations often fail to negotiate or perform any services on behalf of the homeowners, placing their victims at even greater risk of foreclosure.

“Loan Modification scams are a national problem,” DFI Director Scott Jarvis said. “We are proud to be part of this national effort to stamp the problem out.” 

DFI filed action today against Serrano Financial LLC, dba Default Services and dba Default Servicing, and Michael A. Rabel & Associates, LLC for conducting loan modification business in Washington State without a license and for accepting an upfront fee in violation of state and federal laws.

Rabel -

Serrano Financial -

Along with the FTC, CFPB, and Washington’s DFI, attorneys general from Washington and the following states participated in today’s sweep: Arizona, Delaware, Florida, Indiana, Illinois, Kansas, Louisiana, Maryland, Michigan, New Mexico, New York, North Carolina, Ohio, and Wisconsin. Also participating is the Maryland Commissioner of Financial Regulation.