Magazine article Mortgage Banking

Operator of Virginia Loan-Mod Scheme Pleads Guilty

Magazine article Mortgage Banking

Operator of Virginia Loan-Mod Scheme Pleads Guilty

Article excerpt

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIG-TARP) announced on April 10 that Howard R. Shmuckler, 68, of Virginia Beach, Virginia, pled guilty to running a scheme where he collected fees from distressed borrowers for loan-modification services but provided help in only a few cases.

Shmuckler pled guilty to six counts of wire fraud. Each count carries a maximum penalty of 20 years in prison. Sentencing is scheduled for June 22, 2012.

According to the court records, Shmuckler owned a mortgage rescue business based in Vienna, Virginia, known as The Shmuckler Group (TSG). A press release issued by SIGTARP said Shmuckler "misrepresented that TSG had a success rate of 97 percent and falsely portrayed himself as an attorney licensed in Virginia." According to TSG's website, the company said it had 1,100 clients.

The SIGTARP release said that Shmuckler or client recruiters made false representations about their success rate and that caused potential clients to pay fees ranging from $2,500 to $25,00e to help modify the terms of their mortgages.

SIGTARP said that the court records indicate that Shmuckler told his clients to terminate contact with their mortgage companies and stop making payments on their loans. A press release stated, "TSG never facilitated a modification of the mortgages referenced in the statement of facts."

In the release announcing the guilty plea, Christy Romero, special inspector general for SIGTARP, said, "Shmuckler pled guilty today to all but guaranteeing mortgage modifications to struggling homeowners if they agreed to pay him thousands of dollars in upfront fees. …

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