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May 24, 2011
Alameda County District Attorney Nancy E. O’Malley announces the creation of a new program entitled the Homeowner Education and Loan Protection (H.E.L.P.) Program that is designed to address crimes involving real estate on a multi-disciplinary, multi-system collaborative basis using education, prevention, and prosecution to target real estate fraud.The DA’s program will address fraud within Alameda County and will also work in conjunction with the California Attorney General's Office to build a comprehensive statewide response to these crimes, an effort unveiled today in Los Angeles by Attorney General Harris.
Alameda County District Attorney Nancy O’Malley is warning homeowners to watch out for a new real estate scam in which homeowners are asked to pay upfront fees to companies that offer to negotiate with banks to reduce or eliminate existing mortgages in exchange for a new loan at a lower interest rate. Regarding the latest consumer protection announcement, homeowners are urged to be wary of any company or product that charges advanced fees for any loan modification or reduction service. Charging advanced fees for any type of loan modification or loan reduction service is against the law in California, and is punishable by criminal charges or civil fines.
The “Principal Loan Reduction Scam” has many variants, but some common themes to the scam will help homeowner identify it:
“This scam has the potential to ensnare hundreds of homeowners who are either facing foreclosure or falling behind in their mortgage payments,” said Nancy O’Malley, District Attorney for Alameda County. “The threat to public safety through this scam is huge because victims of this scam stand to lose their home to foreclosure.”
O’Malley added, “Beside the individual harm to the consumer, a wave of new foreclosure brought about by this scam could cause a secondary wave of foreclosure that could stall any economic recovery our state is hoping for.”
In January 2011, the Alameda County District Attorney’s Office obtained a Grand Jury indictment against Alan David Tikal, Bruce Blankenhorn, Luis P. DeLeon, and attorney Linda Voss for running a variation of the Principal Loan Reduction scam against a dozen homeowners in Alameda County. Tikal, who was running the scam under the company names “KATN Trust” and “CAA Inc. (Caring About America, Inc.), is currently in custody in Alameda County on $780,000 bail, and faces 29 felony counts of real estate fraud.
The formation of the H.E.L.P. Program is designed to protect the public from this latest scam as well as all other variants of real estate fraud. H.E.L.P. will continue the mission of the Alameda County District Attorney’s Office in sharing information and resources with fellow law enforcement agencies and community organizations to aggressively crack down scams involving real estate.
Contact: DDA David Lim