I vividly recall a TV commercial from my youth, in which a Native American gentleman is standing alongside a freeway. Cars are zooming by and the occupants of one throw a bag of litter out of the window.  The mess lands within a few feet of said gentleman.  The camera zooms in and we see tears well up in his eyes which eventually trickle down his face.

The message?  A simple one, really- don’t litter, it’s bad for mother earth.  Even as a child I understood the thrust of this ad.  This commercial should become a constantly running public service announcement especially, unfortunately, in my hometown of Oxnard.

You see, Oxnard has a litter problem.  The problem seems most prevalent in neighborhoods situated in the southern and eastern portions of the city.  Those communities are predominantly made up of hard working, working class people. Fine people- the majority, indeed.   Yet some, like “Poppy” in Seinfeld, are “a little sloppy.”

I’ll try to be sensitive here, but for some reason, it seems to me as though my Latino brethren (yes, I’m Mexican American) in particular are litter bugs.  And it drives me caterpillar and often causes me to shake my head in disappointment.  Here’s an example:

I live on a relatively busy street in one of the above-mentioned neighborhoods.  The families immediately to my north and south are honest, hard working folk. I enjoy them as neighbors. Yet both households are filled with litter bugs and I’ve tried to get my message across to them subtly and directly. Neither tactic seems to work.

I’ve seem them step out of their cars, drop a soda pop can, an empty bag from McDonald’s, cigarettes buds.  I’ve literally walked to the area where the litter was thrown and picked it up myself, ensuring they see me do so. I’ve gone up and down the street seven houses deep with my broom and big dustpan with the elongated handle on a bright Saturday morning, ensuring my neighbors outside cutting lawns and socializing notice me.  I’ve left notes on car windshields. I’ve sent anonymous, I think, well-written lists on why litter is bad for the neighborhood, affects property values, goes into storm drains and ends up in the grand Pacific Ocean, yet the littering continues. I’ve asked neighbors why on said Saturdays they so meticulously wash their cars, inside and out, yet so willingly take the trash collected in the car and simply toss it in the gutter.

Now, not all of the litter on our street is caused by my beloved neighbors. Cars drive by and toss things out the window (unlike the Native American, I am yet to shed a tear).  But I have yelled at the passing cars, “Pick that up!” after seeing an occupant throw something on my street.  I’ve been the recipient of many birds, indeed.

Our busy little street is also near two elementary schools and a secondary school.  When the kids get out of school, our street becomes a little thoroughfare for these future intellectuals.  Yet they litter, too.  They litter often.  What are they tossing? Wrappers, popsicle sticks from ice cream bars, soda cans, a plethora of junk from their daily stops at ice cream trucks who sell junk to these kids (another issue, another article).

As I drive along various communities in Ventura County, I often notice a striking difference between the streets of Oxnard, Camarillo, Ventura, Thousand Oaks, etc.  The streets of Camarillo and the other cities are clean.  I can go miles and not see litter, which amazes me.  I can’t go two houses in my neighborhood without seeing litter.

I just hope someday my little public relations campaign in my neighborhood will work, and the families will begin to understand how a well maintained home, street and neighborhood might maintain and perhaps, increase property values.  How the hundreds of cars which drive-by my street and their occupants might think, wow! what a nice neighborhood and consider living here.

I also think of some law enforcement and city codes which do not tolerate broken down cars on their lawns, broken windows and make sincere efforts to clean up graffiti (kudos to the City of Oxnard on the latter- there is a consistent effort to paint over graffiti).  I suppose the thinking goes, broken down cars, graffiti, etc, beget problems and decreased property values.  In these difficult economic times I realize cities are financially strapped.  But I hope the City of Oxnard, local school, responsible adults collaborate to make an effort to clean-up and maintain the streets of Oxnard.

Perhaps the City of Oxnard will hire kids to walk the streets to clean up gutters and sidewalks.  Maybe elementary and secondary school can implement a little environmental science into the curriculum.  Perhaps parents will teach their kids not to toss their litter on sidewalks which, with a good dust of wind, will end up on my well-manicured lawn.

In February 2009, policy-makers with California’s Franchise Tax Board (FTB) issued new guidelines to be implemented at the start of January 1, 2010 requiring Property Management firms to withhold a certain percentage of rent collected by them on behalf of their clients. This policy only concerns residential property owners with properties in California, but whose owners live outside of California.  Refer to the FTB for exemptions and waivers.

The new policy states property management companies now have the burden of informing their out-of-state clients as to this new initiative and are responsible for a quarterly accounting , withholding and submissions of such funds to the FTB.  Granted, California current fiscal woes and budgetary problems are a mess.  Currently, there is an approximate 20 billion dollar budget deficit in California and policy-makers are scrambling to close the gap. Unfortunately, this new policy seems to place an unusually high burden on property management companies to collect and submit these funds.  By placing the tax collection responsibilities on property management companies, the FTB may unwittingly be jeopardizing the relationship between property management companies and their clients, respectively.

At Esquire Property Management in Ventura County, we are already experiencing concerns and skepticism by our client base over this new policy. The new policy states we are responsible for withholding seven percent of rental income and submitting those funds quarterly to the FTB.  This policy places a huge tax collection burden on property management firms and have already caused many residential income property owners who live out of state, to drop their property management companies in order to avoid the fees we charge to manage properties coupled with the additional 7%  to the FTB.  The mind set of these property owners seems to be, “why should we continue to pay for your services along with the additional seven percent quarterly to the FTB, when I can manage the property myself and deal with the tax consequences in my own, creative way?”

We certainly understand the FTB has a right to collect taxes on these income properties.  Unfortunately, by placing the collection burden on property management firms throughout California, the FTB is jeopardizing the relationship between property management companies and their clients. In the third week of the implementation of this new policy, we have already seen a significant decline of our out-of-state clientele.  Additionally, this new policy has highly increased the amount of work, accounting, and costs associated with submitting the necessary documentation to implement these new measures.

In summary, we again certainly understand California’s right to collect taxes on these properties.  Unfortunately, by placing the burden of these collections squarely on the shoulders of firms such as ours, some of our clients now perceive us not necessary as managers of their properties with their best interests in mind, but simply, perhaps, as tax collectors.

In Thorman’s article How Are Property Managers Using Technology, he surveys property management companies regarding their use of email statements, e-maintenance requests, e-payments, use of property management software, integrated accounting, lead tracking electronically, and posting on craigslist.

Esquire uses technology in all aspects of our property management business.  We market the benefits and services of our company on websites including, but not limited to craigslist, Google Base, Yahoo Local and our website esqpm.com.   We post active listings on the aforementioned sites and also incorporate the use of Google to consistently rank high on organic searches in order to further develop our business outreach and marketing efforts.

Once prospective tenants register on our website, they can request an appointment to preview the units on our online scheduler.  If our prospects want to proceed, we offer free application processing if they register on our website.  We thoroughly search prospective tenants for credit status and criminal history.   After our review process, if they are approved, clients can then place a holding deposit online with an ACH or credit card e-payment.  We also utilize Docusign electronic signature capabilities so new tenants don’t need to drive to our office to sign their lease or to pay their rent.

We utilize powerful property management software which integrates online payments with our accounting software.  The property management software also allows us to utilize e-maintenance requests and online work orders. We can also send owner draws electronically and email monthly statements.

Esquire Property Management Company in Camarillo uses an intranet system called Backpack by 37 signals.  Backpack is a small business information management and intranet system which allows us to track team projects efficiently.

Finally, we also use social media sites such as Facebook, Twitter, LinkedIn and Yelp.  By incorporating all these tools of technology, we at Esquire Property Management in Camarillo are confident we are incorporating all of our personal and technological capabilities to ensure we are creatively and consistently seeking new business relationships and providing much need services to our property owners and tenants.

 By R.S. Rodriguez

With the advent and boom of mega-stores along Oxnard’s border fringes, stores such as Wal-Mart, Home Depot and Best Buy thrive while the historic and continual struggle of Downtown businesses seems evident. The recent plastic surgery of Plaza Park, with Oxnard political and business leaders tentatively holding scalpels, seems to be another ill-fated attempt to stimulate retail activity in Downtown Oxnard. Granted, this mean-spirited recession has not helped. Yet it seems as though the only businesses which are doing well in the newly conceived Plaza Park area are the mega chains (Subway, Starbucks and Cold Stone Ice Cream shareholders thank you, Oxnard).  The independent businessperson, however, seems to be on the cusp of having to shut their doors.

I’m not a supporter of Sara Palin, yet I will borrow a slogan she often used during her last campaign. The city seems to have once again placed “lipstick on a pig” when it comes to recent changes in Plaza Park.  I will not delve into the many attempts over the decades to solve the problems of Downtown businesses- let’s just say there have been many ill-faded, short-sighted attempts and there have been many a-pig with lipstick roaming around the area for decades! The bovine is still slogging about at Plaza Park.

While strolling through the area, one cannot help but notice the quick failures of some business within the “Downtown Theater District” (already!). Notably, the Peruvian-Thai and Escobar restaurants have folded within a months of opening.  The 5^th Street Steakhouse seems to periodically have activity in the bar area, but I cannot recall the last time I saw many people actually eating in the restaurant.  The anchor of this facelift, of course, was the new mega-theater complex in Downtown, which I understand has only survived due to The City of Oxnard’s subsidies of theater to the tune of hundreds of thousands of dollars. In the age of the internet, DVDs, Hollywood and Blockbuster stores, was a mega theater complex viable in an era with high tech flat screen televisions? (Personally, I would much rather watch a film at home than in a theater complex listening to someone nearby slurp the last vestiges of liquid from their soda pops out via their straw.   I’ve noticed many teenagers patronizing the theater, who have a tolerance for such noises, but not a lot of adults, who have the financial wherewithal to stay after a movie and potentially enjoy the Plaza Park environment. But alas, this does not seem to be happening).

Rather than invest and subsidize the new mega theater complex, perhaps a refurbished old Vogue theater would have been a better investment and would have been aesthetically more pleasing.

Downtown, especially the Plaza Park and along “A” Street, often looks like an abandoned ghost town once City of Oxnard employees leave the area after putting in their eight hours of work.

One would have hoped when taking into consideration all of the historic struggles in recent decades of Downtown that our leaders would have stepped back and taken a grander view of that independent-business-locale quagmire. They did not.  I can envision in ten years the mega theater building being converted into a “Swap Meet”, which is now the unfortunately fate of the once architecturally significant Vogue Theater.

If one were to stand in the middle of Plaza Park and look south, one sees “Plaza Laundry” and its’ eye-sore of a building taking up about half a block of the southern border of the plaza.  Looking northward, one is uninspired by the architecturally insignificant boxed concrete rectangle which houses Social Security Administrative offices, swallowing up most of the northern border of Plaza Park. To the east, of course, we find the Theater Complex and its adjoining retail chains and struggling eateries. Taken together, one is not swept off one’s feet and inspired to spend a lot of time in Plaza Park.  As Gertrude Stein once wrote about another place, “There’s no there, there.”

Granted, financing could have been at issue, but just imagine if the developers who built the hundreds of new homes, condos, townhouses and who dredged the new canals east of Oxnard Shores had worked with city and business leaders to develop a clear, well-thought-out vision on how to connect Oxnard Shores and other beach communities with Downtown Oxnard. Since these meetings probably did not happen, I’ll hereby contribute my vision on how to connect the beach communities with downtown.

Imagine if our political and business leaders had lobbied those developers to build a fishing pier at the end of 5^th Street. Said pier could have been used for fishing, for taking a stroll at sunset and could have been anchored by restaurants and shops just as beautiful as those at Huntington and Redondo Beaches in Orange County (it might have been necessary to buy out the owner of the Shores Mobile Home Park, thus freeing up lots of space along Fifth Street at the beach).

How to connect the Fifth Street Pier to Downtown? Free trolley rides!

We have fabulous weather in Oxnard. Consider open-aired double-decker trolley (think London) buses taking people from the Fifth Street Pier, continuing east with views of the Topa-Topa Mountain range as one scuttles about at 15 miles per hour. Looking northward, those views would not be blocked, as Fifth between Harbor and Victoria on the both  sides are agricultural fields, thereby giving pristine, unencumbered views of those grand mountains.

Now take the trolley all the way to a new, revamped Plaza Arts Park (with emphasis on the arts). Imagine if the blight currently bordering Plaza Park was razed with the park itself becoming a true loop. The Soviet-era-like Social Security building would be razed, as would all of the other insignificant building surrounding the park.

This now circular park would be bordered with architecturally pleasing-to-the-eye structures similar to those imported into Heritage Square. The park would now be surrounded by refurbished Victorians with many housing art galleries and other shops intended to bring people from all over into the new Plaza Arts Park. (The current configuration is simply not conducive to enjoying the park. One is not inspired to spend time at the park, peering south at Plaza Park Landry). The anchor of the new Plaza Arts Park would be The Carnegie Art Museum, one of the few significant buildings left standing in downtown Oxnard (perhaps suggesting Carnegie reconfigure its’ stairway allowing access via the Plaza Arts Park, and not from C Street). The lower floors of these refurbished historic homes could house art galleries and specialty shop and the top floors could be rented out as living spaces so that those living at Plaza Art Park provide a sense of community.

Once consumers left the park area after hopefully spending many hours shopping and strolling about, they could hypothetically stop at predetermined stops along the Fifth Street Corridor.  Perhaps stops could be made on Fifth Street by the Historic District, allowing people to walk up and down F and G Streets to admire those historic homes. Another stop could be made at the old Oxnard High School. Consider the current name of  the old high school location, Campus Park.  Certainly an open space is an improvement over the old abandoned educational buildings. Yet Campus Park doesn’t inspire. Imagine, if you will, if that space was use for the Oxnard or Channel Islands Botanical Gardens or Japanese Gardens, or a combination thereof.  People would come from all over to stroll and enjoy a well-maintained botanical garden: a splendid reason to hop off the trolley.

Continuing on Fifth westward, along the Oxnard Airport, perhaps one or two of the giant warehouses could be converted  to house the new Oxnard Aeronautical Museum with the Oxnard Farm Museum next door. The trolleys would stop at those designations, as well. All of Fifth Street could become a viable commercial, retail and residential hub with vision (and with a pier on one end and a beautiful park at the other, surrounded by the splendor of Victorians).

Fifth Street would need to be cleaned up, of course. The housing complex across from the old OHS could be improved upon by planting many more trees along its sidewalk. Dozens of new lovely palm trees have been planted along Fifth just east of Harbor-perhaps more palm trees could be planted all the way to H Street along the center divide.

(In an earlier post, I proposed western Ventura County incorporate a 49 Mile Scenic Drive route similar to San Francisco’s. The new Fifth Street Pier of course, would be part of the route).

The Fifth Street Corridor might become a hip place to visit.  Such an improved Fifth Street might inspire wineries and other businesses to setup shop.

Vision, grand vision, is what Downtown Oxnard needs from its’ leadership. Historically, that vision and leadership has lacked in Oxnard and the trend seems to continue.  Imagine how beautiful the Plaza Arts Park would be if surrounded by Victorians.  A jazz club or two opened at night to attract people to the Plaza Arts Park.  Perhaps structures important to the city’s history could be refurbished and brought in- buildings like the historically and architecturally significant Pettit Farm House. Oh darn! My bad, The City of Oxnard gave permission to our fire department to burn it down to ashes for fire fighting training a few months back.

Such is Oxnard.

Okay, it’s already ten days into December, and you haven’t done any Christmas shopping?  Is it because you’ve lived in Ventura County for so long that you’re overwhelmed with all the options here? Or perhaps you are new to the area and don’t know where to even begin to shop.  Well, let’s narrow it down and open up some possibilities.

The most obvious places to go would be the malls and shopping plazas if you can manage the crowds.  There’s the Pacific View Mall for you Ventura locals, The Oaks Mall in Thousand Oaks, the Camarillo Premium Outlets if you’re looking for quality at a deal, and the Market Place off the 101 in Oxnard at Rose Avenue.

But if you fancy gifts which reflect the essence of Ventura County or of a more specific nature, try one of the many specialty boutiques like The Wine Closet in Old Town Camarillo, or bike shops in Ventura for that bicycle enthusiast, a cigar/smoke shop for your tobacco connoisseur, or one of the surf shops along Thompson Blvd. for the friend who likes to catch the biggest wave.  If you have a relative that needs a bit of pampering, try a gift certificate for a day at one of our fabulous spas.  And for the health nut, there’s a great little organic and health food shop on Main Street downtown.

This brings me to managing the shopping experience.  The Ventura area has several places to go if you want to get something out of the shopping day for yourself.  First, there’s downtown Ventura on Main Street, where you can spend the day strolling up and down the Santa Barbara State Street-like sidewalks, discovering the nooks and crannies of our local retail entrepreneurs.  While you’re buying gifts for your loved ones and little happy’s for your co-workers, you can take in a movie at the cinema, a cup of coffee from several cafes and coffee shops, lunch at your choice of the various restaurants, or just the breath-taking view up on the hill above the main strip.  You can even take a walk over the 101 bridge down to the beach and do some shopping while you’re at the Promenade.

Then, if you travel up into the mountains, you can enjoy a day cruising through the many artists’ studios in Ojai.  What a fabulous place to pick up that unique gift that’s only from the Ventura area!

If the twists and turns of Topa mountain roads don’t agree with you, then visit the other part of heaven- Ventura Harbor Village.  Here, you can find a few specialty shops while absorbing the marine life of boats pulling in to dock.  Why not try on dozens of hats at the hat shop, and then rent a paddle boat for an hour before ending the day with a yummy hand-scooped ice cream cone.  Oh, and don’t forget to get a few Christmas gifts!

After all that running around Camarillo, Ventura and Oxnard, it’s time to do some at-home Christmas shopping.  No, I don’t mean online shopping; although, that is a smart way to comparison shop before you go out to the mall.  What I’m referring to is making gifts from the kitchen.  Nothing is easier, cheaper, and more personable than to give a hand-made gift to your boss or teacher.  You can find a plethora of gift recipes on the internet, and I’ve provided my favorite one here, as well.  A craft store like Michael’s in Ventura or Camarillo will have any kind of container and ribbon you need; even the 99 Cent Store in Oxnard and downtown Camarillo will have a few.  Make a list of ingredients; then order them from Von’s, and have them delivered to your door for a very small fee.  Set up an assembly line in your kitchen, line up your workers (kids), and before you know it, you’ve got a dozen wrapped gifts that are unique and delicious!

As a relatively new resident renting in the City of Ventura, I don’t have a huge knowledge of all the treasured shopping places in Ventura County, myself. Let me know of any other must-shop sites in our county!

Reindeer Food

Make a big batch of this sweet, crunchy snack, and package it in several little canisters or jars, tied with a bow.

1 package (6 oz, 1 cup) semi-sweet chocolate chips

¼ cup peanut butter

½ cup peanuts (optional)

6 cups rice Chex or Crispix

1 cup powdered sugar

In large bowl, melt chocolate in microwave on HIGH for 1 minute.  Stir and heat an additional 30 seconds on HIGH or until melted.  Stir in peanut butter and peanuts.  Gently stir cereal into chocolate-peanut butter mixture, until well coated.

1. Place powdered sugar in 2-gallon storage bag.  Add coated cereal to sugar and close bag.  Gently toss cereal mixture until well coated.  Store in airtight container in refrigerator.

Yields 8 cups

Chris Thorman at http://www.softwareadvice.com/property-management/ wrote an intriguing article on Fannie Mae’s new Deed for Lease (D4L) program.  The staff at Esquire Property Management Company in Ventura County, California is very interested in this topic because it impacts our landlords, tenants and our portfolio directly.  Specifically, the city of Oxnard has been hit hard by foreclosures.

Thorman’s post explains D4L using illustrations and easy-to-digest nuggets of information. “Own to Rent: Breaking Down Fannie Mae’s Deed for Lease Program,” breaks down how the program works for home owners who are in financial trouble, who are eligible and their property requirements, respectively.

Chris posed the following question:  “Do you think that the Deed for Lease program makes sense for Fannie Mae, the borrower or property managers administering the new leases?”

While reading this article I  wondered why Fannie Mae would want to promote this program–it just doesn’t seem to be advantageous to them.  Would it not be more cost effective for a bank to foreclose on a property versus executing a deed-in-lieu of foreclosure agreement (DIL)? Perhaps Fannie Mae economists are forecasting a significant upswing in the real estate market in the next couple of years, thereby providing them a tool to delay foreclosing on these homes while collecting rental income until the sales market strengthens.  They would then be allowed to resell said properties for substantial yields compared to existing fair market prices.

Does the lease program make sense for property managers?  At Esquire Property Management in Camarillo, CA, we believe it would be very lucrative.  Much like the REO market, there would be a short term spike in property management accounts for a select few companies.  In theory, it would be easy for the property manager to qualify the prior homeowner’s financial qualifications to rent back the home. The transition would be seamless as there would be no vacancy period.  If the prior homeowner and home qualifies under the Fannie Mae guidelines, the property managent company’s overhead is minimized as no advertising or marketing costs are involved.  On the other hand, a property manager could devote hours of effort qualifying the property and the owners/tenants , only to see their time and resources lost if the borrower or property does not qualify.  Granted, such scenarios are common in the real estate industry.

More time, consideration and debate might be required on the issue of what might happen after the initial 12 month lease period is extinguished.  Does anyone know how a property management company in California might sign up for the Fannie Mae Deed for Lease Program?

In my previous post, I proposed a “39 Mile Scenic Drive” incorporating picturesque vistas of western Ventura County. The emphasis of the post was on the concept, not the actual route. Yet consider, if you will, the beauty of drive via the 118, east through Fillmore (with a stop, perhaps off Central Avenue for lunch?), back along the 118, toward Santa Paula. Said drivers could then head through Santa Paula via the foothills of the Topa Topa Mountain range, meandering along the many horse ranches which dot that beautiful road. This portion of the drive would wind down into downtown Ojai, allowing people to enjoy the many art galleries of Ojai and its rich history.

 Many ideas could be incorporated into the “39 Mile Drive”, celebrating western Ventura County and exposing a few thousand drivers annually as to the visual, cultural and historic richness of this county. Yet, a viable sign and a logo should be conceived to entice drivers to pull off of the 101 to enjoy our splendor and hidden gems.

As a former resident of San Francisco, I’ve fond memories of that wonderful city. When guests would come to visit, I often found myself taking them on a vehicular journey of The City, often following the well-known signs which guide drivers along San Francisco’s “49 Mile Scenic Drive.” It behooves western Ventura County (Camarillo, Ventura, Oxnard etc…) to implement a similar route to entice drivers to get off the 101 freeway and enjoy the many visual splendors of this area.
The route in San Francisco is designated by signs recognized throughout the world (an image of a seagull, and the words “49 Miles Scenic Drive) with arrows instructing drivers where and when to turn to follow the path. Perhaps western Ventura County can implement a similar sign system with a our own different logo.

With thousands and thousands of travelers passing daily along the 101, maybe a few dozen would be enticed to follow a route, which hypothetically, pulls drivers heading south off the freeway before Main Street in Ventura, allowing them to enjoy the architectural beauty of Downtown Ventura. The route could wind its way westward to the ocean at the intersection of Main and California. There, they could appreciate a view of the Ventura Pier before heading south along Harbor Blvd toward Oxnard, allowing them to enjoy sights of the Channel Islands Harbor and Oxnard beaches. A well-thought out route could potentially incorporate vistas of Ventura, the beauty of Channel Islands Harbor and could meander through Oxnard’s Historic District and eastward through the agricultural fields. The drive could then be planned to enjoy the charm of Camarillo, somehow winding its via Camarillo and to Santa Paula and Fillmore, with the route meandering through Foothill Blvd between Ventura and Santa Paula, for example.

It seems to me that so many drivers passing along the 101 corridors have no idea as to the richness and beauty of western Ventura County. A well-defined route could benefit local business, restaurants and shops and would give drivers unfamiliar with this area a viable reason to pull off the freeway. Yet, in order to do so, local cities must work in conjunction with Cal Trans to properly place a few signs along the freeway with a well-thought-out logo and wording that perhaps says, “39 Mile Scenic Drive” (49 Mile Scenic Drive might be trademarked).

If there are any of your favorite Ventura County historical landmarks, cafes or restaurants which you feel should be included, please feel free to share them in the comments.

Let us know if there are any specific topics you would like us to discuss or post regarding real estate, 1031 exchanges, property management, evictions, screenings, or neighborhood news.

California Department of Real Estate ** CONSUMER ALERT ** (First Issued 3/2009) 1 FRAUD WARNINGS FOR CALIFORNIA HOMEOWNERS IN FINANCIAL DISTRESS

I. HOME LOAN MODIFICATION AND FORECLOSURE RESCUE PROGRAMS –

BEWARE OF SCAMMERS AND CON ARTISTS, WHO ALMOST ALWAYS DEMAND THE

PAYMENT OF MONEY UP FRONT.

As homeowners continue to feel the pinch from the recession, and as home loan worries, delinquencies, defaults, and foreclosures continue to occur in California, loan modification and foreclosure rescue scams are growing and soaring. The FBI has said that a “rampant mortgage fraud climate” currently exists, and that California is one of the top states for loan fraud.

Whether they call themselves foreclosure prevention or rescue consultants, forensic loan auditors, loan restructuring agents, debt settlement specialists, loss mitigation experts, loan modification specialists, mortgage modification consultants, or some other official or important sounding title(s), there are thousands of dishonest and rogue individuals and companies (most of whom are unlicensed, many of whom use lofty sounding names, and some of whom falsely claim to be non-profits, to be attorney backed or affiliated, and/or to be affiliated with the federal and State governments–e.g., they suggest the backing of the Obama Administration, a Member of Congress or some other elected official, or of a government agency or department, such as HUD, FHA, the California Department of Real Estate, the California State Bar, etc.) that have popped up and appeared all over the State of California. Many of the individuals have criminal and/or disciplinary records, and many of the companies are just fraud factories and high-pressure sales mills operating out of telephone boiler rooms that are in the “business” of offering impressive sounding but non-existent loan services so that they can steal your money. Some are operating nationally, and some are even operating outside of the country.

To find their homeowner victims, they scour foreclosure notices, they get information on adjustable rate loan re-sets from title companies, and they use other tools. Quite simply, the bad players look for homeowners who are in foreclosure, who are struggling to make home loan payments, or those who need to modify their mortgages to find relief from financial distress. Once they find their victim targets, they market hope – and all too often, it is false hope.

The scammers advertise on the radio, in newspapers, through the Internet, via email and the U.S. Mail, and on television. Some even go door-to-door.

While there are people and entities in the business of modifying loans that are licensed, legitimate and qualified, you must be cautious and BEWARE.

DON’T LET THE FRAUDSTERS TAKE YOUR HARD EARNED MONEY. AND DON’T BE THE NEXT VICTIM OF THE CON ARTISTS*****

II. LOAN MODIFICATIONS AND THE UNSCRUPULOUS CON.

While there are “foreclosure rescue” scammers who promise to save homeowners from foreclosure – or to delay a foreclosure via litigation and/or bankruptcy filings — after a notice (First Issued 3/2009) 2

of default is recorded, the most common type of fraud (the “fraud of the moment”) relating to home loans is Loan Modification fraud.

Because of the current economic situation, you may not be able to afford your mortgage payment, or you may be in foreclosure. If you are not able to negotiate a deed transfer to your lender in lieu of foreclosure, to sell you home through a “short sale”, or to refinance your home loan, an option that may be available to you is a Loan Modification.

What is a Loan Modification? That is where you and your lender (or the loan “servicer” on behalf of the lender or loan “investor”) (both the loan servicer and lender will be referred to below as “lender”) agree to modify one or more of the terms of your home loan. The terms could be a lower interest rate, an extension of the length of the loan (like making a 30 year loan into a 40 year loan), a conversion of an adjustable rate loan (called an ARM) to a fixed rate, a rate freeze, the deferring of some of your payments, or any other modification of loan terms.

The goal of a successful Loan Modification is to help you keep your home and to give you a real, meaningful, sustainable, and long-term adjustment to your current home loan that works for your financial situation.

But loan modifications are not possible for every homeowner, and the loan modification “success rate” is currently very low in California. The available data suggests that loan modifications vary from lender to lender. Many lenders have guidelines for loan modifications. If your financial situation meets the guidelines, a loan modification is possible with the necessary showing of financial “hardship” on your part. If you do not meet the guidelines, a loan modification may not be possible. It really depends on your lender and your hardship.

This is where the scammers come in. They often falsely claim that they can guarantee to “negotiate” you into a loan modification, make huge and hollow promises, exaggerate or make bold statements regarding their modification successes, publicize their supposed expertise, ask for money up front, and then take your money and leave you in worse shape than before. They may simply take your money and run. Please see and review the section captioned “Signals of Fraud/Red Flags to Watch Out For” below.

III. THINGS TO DO TO PROTECT YOURSELF FROM BECOMING A LOAN MODIFICATION/ RESCUE SCAM VICTIM.

A. Do It Yourself (and Do It As Soon As Possible) – You can contact your mortgage lender directly and request a Loan Modification that works for you and your lender. Don’t wait to call if you cannot make or believe you will not be able to make your mortgage payments. Be persistent! – call back many times. Make detailed notes about your attempts to call, when you have left messages, who you speak with, what was said, and what offers are discussed and/or made. (First Issued 3/2009) 3

The Department of Real Estate has some practical tips for you for working directly with your lender on a loan modification. Those consumer tips can be accessed at http://www.dre.ca.gov/faq_home.html.

B. Other Free and Safe Options – If you don’t believe you can negotiate a Loan Modification yourself, or if you do not want to, there are free and safe options available to you.

1. The U.S. Department of Housing and Urban Development (“HUD”) offers Foreclosure Avoidance Counseling through non-profit agencies in California. Go to HUD’s web site at www.hud.gov, or call 800-569-4287, to find counselors. HUD also offers information to homeowners facing the loss of their home.

2. HOPE NOW Alliance – this is a cooperative effort of home loan counselors and lenders, and it consists of HUD intermediaries. Go to the HOPE NOW web site at www.hopenow.com or call 888-995-HOPE.

C. Locate and Work with a LEGITIMATE, LICENSED, and QUALIFIED person or company (“Log on, Look em up, and Check em out”) – www.dre.ca.gov

If you don’t want to negotiate a loan modification by yourself (or believe you are unable), and if you also decide not to use the free counselors provided through HUD or the Hope Now Alliance, you can hire a representative to negotiate for you. But BEWARE – YOU NEED TO FIND SOMEONE WHO IS LEGITIMATE, LICENSED AND QUALIFIED BY EXPERIENCE AND TRAINING. And remember that you do NOT have to pay anything up front!!!

1. California licensed real estate brokers can perform loan modification work, and licensed real estate salespersons can do such work under the supervision of their employing broker.

While it is currently legal for a real estate broker to charge you in advance of performing the loan modification services before a Notice of Default is recorded, you do not have to pay anything in advance of a successful loan modification, and all broker fees are negotiable. If a real estate broker wishes to charge an advance fee, he or she must submit an Advance Fee Agreement and all supporting materials to the Department of Real Estate (“DRE”). If the agreement and materials meet the requirements under the law, DRE issues a no-objection letter. This simply means that the department does not object to the use of the agreement form and related materials. And please understand that a no-objection letter does not mean that DRE recommends, approves or endorses the agreement or the services of the real estate licensee. All fees collected in advance must be properly handled as trust funds, which require special handling and must be deposited into the broker’s trust account. A licensee must refund to you any unearned portion of the advance fee(s) collected if any of the promised services are not completed. (First Issued 3/2009) 4

You should go to DRE’s web site at www.dre.ca.gov, review and check the information on advance fees and loan modification services, carefully review the public license information on the real estate broker (that information will include any disciplinary history), and look for any Desist and Refrain Orders (D&Rs) that have been issued against companies and individuals. If a D&R has been issued, that means that DRE has determined the individual and/or company is unlicensed and/or has operated unlawfully.

2. California licensed lawyers can also perform loan modification work, but only when such lawyers render those loan modification services in the course and scope of their practice as an attorney at law.

Lawyers can also currently charge fees in advance (typically called a retainer), and even after a Notice of Default has been recorded. But lawyers must have a written fee agreement with you. And as is the case with real estate licensees, you do not have to pay anything in advance of a successful loan modification, and all legal fees are negotiable. Any fees that you pay to the lawyer(s) in advance do not have to be placed in their trust accounts.

Just as you should do with real estate licensees, check out lawyers by going to the website of the California State Bar, www.calbar.ca.gov. Check the lawyer’s bar membership records and look for any discipline. Also, demand to meet and speak in person with the lawyer whom you are paying to represent you.

Unfortunately, some loan modification business models have claimed lawyer involvement but they are just unlawful schemes to avoid the prohibition against the collection of advance fees by a real estate licensee after a Notice of Default is recorded. In others, lawyers are just a “front” or non-participating “magnet” for business from desperate homeowners.

****Be on Guard and Check Them Out (Know Who You Are Dealing With)- Do Your Own Homework (Avoid The Traps Set by the Scammers)**** In addition to looking at the license records, contact the Better Business Bureau to see if they have received any complaints about the person or company. But please understand that this is just another resource for you to check, and the loan modification provider might be so new that the Better Business Bureau may have little or nothing on them (or something positive because of insufficient public input).

Also, and very importantly, ask the loan modification “specialists” (whether they are real estate licensees or lawyers) about their financial, mortgage and real estate experience, the options and methods they use to renegotiate home loans, when they were first licensed, whether their license is still active, whether they have ever been disciplined, where, when and how they got their experience, what data they have to prove their past successes, what evidence they have of prior successful dealings with your lender, and also ask them to define a loan modification and the process that they will undertake and the time that they will spend to successfully negotiate a long-term, affordable and sustainable modification for you. (First Issued 3/2009) 5