Maryland man sentenced in massive loan modification scam

by Ryan Smith25 Apr 2014
A Maryland man will spend only one year in prison after scamming thousands of homeowners in a $4 million loan modification scheme.

Brian Kelly, 37, was sentenced to a year and a day in federal prison and three years of supervised release, according to the Justice Department.

Kelly had previously pleaded guilty to one count of conspiracy, nine counts of mail fraud and nine counts of wire fraud.

Prosecutors say that Kelly and his co-conspirators, operating under the name Home Owners Protection Economics Inc. (HOPE), scammed struggling homeowners into paying between $400 and $2,000 in up-front fees for help in obtaining federally funded loan modifications. HOPE routinely claimed that homeowners had already been approved for loan modifications, often giving out fake “approval codes” and quoting new (and phony) mortgage terms and due dates, the Justice Department said. HOPE also guaranteed refunds in the even homeowners did not receive loan modifications.

In exchange for the up-front fees, HOPE sent homeowners a do-it-yourself application package that was “virtually identical” to the one the government provides for free, the Justice Department said.

“The HOPE customers had no advantage in the application process, and, in fact, most of their applications were denied,” the DOJ stated.
Two other defendants, Christopher S. Godfrey and Dennis Fischer, were convicted following trials and sentenced in February to 84 months each in prison. A third co-defendant, Vernell Burris Jr., was sentenced to a year and a day in prison after pleading guilty.



Is TILA-RESPA a good or bad thing long term?