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Saturday, January 1, 2011 – Daily News – 9A Mortgage lenders now advertising as crisis solvers FOOTHILL RANCH, Calif. (AP) — PacWest Funding’s CEO watched in late 2007 as rival mortgage broker- ages, banks and collaborators col- lapsed under the weight of the declin- ing housing market. Fearing his company would be next, Curtis Melone restructured his business to offer what he felt people needed most: help with their crushing mortgage debt. Melone re-christened his company Green Credit Solutions, a loan modifi- cation firm dedicated to aiding people facing rapidly ballooning payments on loans many of them couldn’t afford in the first place. The journey from subprime-era lender into purported troubled home- owners’ helper has been a common post-meltdown path in the mortgage industry hotbed of Southern Califor- nia. Loan brokers put out of work by the housing market collapse went looking for the next big thing — and found it in the mortgage modification business, which provided a way of cashing in on the problems they helped create. Many of those firms, including Green Credit Solutions, have been shut down and are now facing state and federal investigations trying to prove that they bilked their customers. ‘‘Some of the same people who were involved in luring people into loan origination schemes years ago are now back,’’ said Benjamin B. Wagner, a Fresno-based U.S. attorney who co-chairs a nationwide multi- agency mortgage fraud task force. For example, Bernardette Perry was banned by a judge from working in the loan-modification industry after she helped transform Fountain Valley- based lender Synergy Financial Man- FIRES Continued from page 1A lives of two dogs trapped inside. Neighbors attempted to rescue the dogs when they heard the animals inside, but there was too much smoke. The fire consumed the home at 825 Lassen Ave. Residents were not at home when the fire start- 2010 Continued from page 1A wait while his eligibility is decided. Questions arose about his eligibility due to a sin- gle count of felony forgery in 2005 that was reduced to a misdemeanor follow- ing the completion of a 36-month probationary period. The question of eligi- bility was asked of Tehama County District Attorney Gregg Cohen and Tehama County Clerk-Recorder Bev Ross, both of whom said the answer was not within their jurisdiction. An investigation is being conducted at the request of Corning City Council and an answer about eligibility is expect- ed at the Jan. 11 meeting. WHEE festival Debates and concerns preceded the World Hemp Expo Extravaganja 2010, but disappeared like a puff of smoke when the three- day festival went on peacefully Memorial Day weekend south of Red Bluff. What took months of discussion and prompted the Tehama County Board of Supervisors to rewrite a 40-year-old county festi- val ordinance, amounted to a relatively quiet event, closely monitored by vol- unteers and Sheriff Clay Parker and his deputies. Attendees took part in seminars on belly dancing, debates on marijuana leg- islation and a cannabis film festival. More than a dozen bands performed. Event organizer Donna Will, a marijuana user and patient advocate, was determined that the festi- val would go on with or without a permit. Aided by High Times Magazine Creative Director Steve Hager, Will’s persistence paid off. agement Corp. into a foreclosure relief firm called Loss Mitigation Ser- vices Inc. Regulators say it did little to help the 1,400 clients it took on after they’d paid up to $5,500 apiece. But that’s dwarfed by Green Cred- it, which had some 6,400 separate loan modification files in its Foothill Ranch offices when they were raided by state officials in late 2009. The company had placed itself at the apex of a national network of bro- kers who fed it clients and made it perhaps the largest loan modification company to attract legal scrutiny, investigators said. ‘‘The volume and the way they branched out ... they were kind of at the center of it,’’ said California bar investigator John Noonen, who led the raid. California’s attorney general began investigating Green Credit after cus- tomers complained they each paid thousands of dollars for loan workouts that never happened. The state Department of Real Estate also filed allegations that prompted Melone and other company officials to surrender their real estate licenses in April. Attorney general spokeswoman Becca MacLaren said no criminal charges have been filed but her office’s investigation is ongoing. Melone, 36, declined to be inter- viewed, though a former company loan salesman gave some insight into PacWest, which was established in 2003, and its evolution into Green Credit. ‘‘There wasn’t a lot of outright fraud going on (at PacWest) but there was certainly a lot of stuff where they would exaggerate the income,’’ said the salesman, who spoke on condition of anonymity because he feared his involvement with the companies ed, but arrived as firefight- ers attempted to save the dogs and the house. Firefighters were able to rescue one of the dogs and returned it to the fam- ily, who watched in tears from the sidewalk. Before emergency per- sonnel arrived, Rieanna Hosler, 24, and April Bonds, 17, residents at 845 Lassen Ave., said they saw smoke and heard what sounded like a tank about May 26, just days before the event was scheduled to start, Plan- ning Director George Robson issued a festival permit, the first allowed under the new ordinance. The only incidents involving law enforcement surrounding the festival involved vandalism of water tanks prior to the event and a case of shoplifting from one of the merchant booths. Mountain lions It was a busy year for mountain lions and law enforcement, with multi- ple cougar sightings in August throughout Red Bluff, including at least one confirmed sighting near Bidwell School. The majority of the sightings were during the first week of August either late at night or early morn- ing, which are normal hours for cougar activity, according to Red Bluff Police officers. The first mountain lion, who was reportedly sight- ed behind the Villa Columba housing com- plex, was laying under a picnic table near the river at Red Bluff River Park when it was located by an officer. Mountain lions were also reportedly seen at the Red Bluff Diversion Dam and walking across Main Street near Dog Island Park. The final sighting was the morning of Aug. 27 at Forward Park. The Department of Fish and Game was consulted throughout the sightings and Red Bluff Police checked the area of the last sighting but were unable to locate the animal. Residents were advised that if they saw a mountain lion they should leave the area if possible, report all sightings to the police department and to let the police handle the moun- tain lion. would hurt his future job prospects. ‘‘You didn’t have to have a job. You could still get financing. You just had to pretend to have a job.’’ Among the mortgages PacWest peddled were adjustable-rate loans with low teaser rates that could have left borrowers in dire financial straits when they later ballooned to much higher levels, he said. When the demand for the mort- gage derivatives came to an abrupt halt in 2007, Green Credit advertised aggressively for brokers who could deliver struggling customers. For many mortgage brokers who were seeing their own business dry up as credit and home sales became scarce, Green Credit was a lifeline: Instead of charging to write mort- gages for lenders, they could get paid to arrange modifications. In return for brokers’ files, they kept a cut of the $3,450 Green Credit charged for most modifications, court records show. The resulting volume even prompt- ed the company to open an office in Guatemala City, where lower-wage employees handled customer service calls from the growing number of Spanish-speaking customers, the bar association’s Noonen said. At first, the salesman said, Green Credit’s staffers were having reason- able success with modifications. But about six months into the company’s operation, the volume of applications it took in had outpaced its capacity to handle them, and hundreds of files were going untouched for months at a time, he said. Noonen likened the operation to a Ponzi scheme. ‘‘They’re taking in new money and new fees to pay for the processing of the old files because they got bogged down,’’ he said. to explode inside the garage before they ran away. About two hours before, Hosler smelled a smell like burning plastic, she said. Mike Johnson, 30, a neighbor across the street from the burning home, said the residents had three dogs, and two were in cages. “I heard them scratch- ing and crying,” Johnson said. “I love animals. Fish passage The groundbreaking for the Fish Passage Improve- ment Project at the Red Bluff Diversion Dam brought dignitaries includ- ing Interior Secretary Ken Salazar and Gov. Arnold Schwarzenegger to town promoting local job cre- ation as the project, which would benefit fish and farmers, broke ground. After all the fanfare, the final contracts were awarded and construction began, but locals were left wondering when the promised 1,200 local jobs would materialize. In August the Legisla- ture decided to scrap an $11.1 billion water bond measure from the Novem- ber ballot, saying voters would not pass the mea- sure because of the state budget crises. About $60 million of that bond money was supposed to go toward the project. The state’s share of the project is now being shouldered by the federal government. When the state will have to repay the debt has not been deter- mined. The $220 million pro- ject, the nation’s largest recovery-funded project through the Department of Interior, is supposed to be completed by May 2012 when the dam gates will no longer be operated. Highway 99 It was a mixed year for Highway 99, both 99E and 99W, in 2010, with some progress and some tragic incidents. Both were the scenes of a number of fatal colli- sions with a significant number right around the beginning of November. In a period of a few days between Oct. 30 and Nov. 3 there were four fatal wrecks starting with an early morning crash on 99E Oct. 30 in which the driver, who was thrown from his vehicle, overcor- rected and lost control of They’re like children.” He and a roommate tried to get into the resi- dence before the fire trucks arrived but couldn’t get more than 20 feet inside, he said. Information about the Dodge building fire was not immediately available. ——— Andrea Wagner can be reached at 527-2153, extension 114 or awagner@redbluffdailyne ws.com. his vehicle, causing it to overturn. Two more fatalities occurred Nov. 1 with an early morning collision between a semi and a Honda Accord on 99E, south of Lassen Avenue, and the death of a Gerber man thrown from his motorcycle in a collision on Highway 99W, south of Finnell Avenue. The fourth fatality was on 99W when a 25-year- old man was thrown from his pickup while chasing two men on quads who he thought were trying to trespass on his property near Houghton Road. Mid-November saw a collision in which two pedestrians were killed crossing 99W, north of Sonoma Avenue, directly into the path of an on- coming vehicle. Also in mid-November was the collision on 99E, north of Broyles Road in which a Caltrans worker, doing traffic control for an earlier accident, died after he was hit by a vehi- cle driven by a 45-year- old Corning man who was suspected of being under the influence at the time. Both the 45-year-old Corning man and the 25- year old Corning man, who was the driver in the earlier crash that killed a Chico couple and serious- ly injured two boys, had previous DUI convictions. One of the boys later died from his injuries. Earlier in the year a fiery crash on 99E north of Chico claimed the life of an 18-year-old Corning girl who was second alter- nate in the 2007 Miss Corning competition. Some improvements, unrelated to the crashes and already in the works, were made on 99E in Los Molinos. A $1.6 million project, funded by Prop. 1B and the American Recovery and Reinvestment Act of 2009, saw several features added to slow traffic going through the town, includ- San Francisco gets 2013 America’s Cup San Francisco won the bidding to host the America’s Cup in 2013, which will be sailed in fast catamarans with a backdrop of the Golden Gate Bridge, Alcatraz and Coit Tower. Friday’s announcement by the America’s Cup Event Authority came after talks with San Francisco and Newport, R.I., went to the dead- line for picking the venue for sailing’s marquee regatta. ‘‘We sought a venue that fulfills our promise — to showcase the best sailors in the world competing on the fastest boats,’’ America’s Cup Event Authority Chairman Richard Worth said in a statement. ‘‘And hosting the America’s Cup in San Francisco will realize that promise.’’ San Francisco had the America’s Cup all but secured in November. But Stephen Barclay, the lead negotiator for the Golden Gate Yacht Club, said the Port Commission changed the deal that had been negotiated and sent to the Board of Supervisors to begin the approval process. After San Francisco was put on notice on Dec. 11 that its bid was unacceptable, America’s Cup officials began negotiating with Newport. Russell Coutts, a four-time America’s Cup winner and CEO of BMW Oracle Racing, had telephone conversations with San Francisco Mayor Gavin Newsom before Christmas that may have helped swing the momentum back to the California city. America’s Cup organizers had expressed con- cern about taking on too much risk in developing a portion of the waterfront for the competition. Newport officials gave a ‘‘superhuman effort’’ in talks, GGYC spokesman Tom Ehman said. ‘‘Should there be any problem with San Fran- cisco fulfilling their end of the deal, we’ll be looking to Newport to jump in,’’ Ehman told The Associated Press. He said Newport likely will get a preliminary regatta during the buildup to the 2013 America’s Cup. San Francisco officials estimated hosting the America’s Cup could be worth $1.4 billion in economic benefits and create 8,000 jobs. BMW Oracle Racing, owned by software mogul Larry Ellison, won back the oldest trophy in international sports for the United States with a two-race sweep of Alinghi of Switzerland in February off Valencia. The 2013 regatta will be contested in 72-foot, wing-sailed catamarans. ing a new traffic signal that went online Dec. 16 at the intersection with Ara- mayo Way. Also completed were paving and shoulder widening along with crosswalks at Orange and Grant streets, where multi- ple pedestrian fatalities have taken place in the last few years. Education cuts State budget cuts to education impacted local schools as they struggled to work with less. At Red Bluff Union High School a number of positions and programs were cut, including sum- mer school and the Adult Education Program. The workforce at the Red Bluff Elementary School District was reduced while adminis- trators took some heat when the teacher and staff unions accused them of not taking the same cuts as the rest of the employees. At the Antelope Ele- mentary School District, administrators tried to make cost-saving mea- sures in the area of trans- portation. A proposal was made to move fifth- graders from the Ante- lope Elementary School to Berrendos Middle School to eliminate some stops along the bus route. Most parents opposed, and the idea was dropped after the bus route was reworked. School employees ral- lied hoping to send the Legislature a message of no more cuts, but now it seems this is just the beginning as Gov.-elect Jerry Brown has already told educators more cuts are to come. Bend Area When a proposal to designate the Sacramen- to River Bend Area as a national recreation area, residents of the Bend community and Rep. Wally Herger argued against the bill. The designation would give the almost 18,000-acre area special management and federal funding. Senators Barbara Boxer and Diane Fein- stein concurred with county supervisors in supporting the designa- tion, saying it would bring in tourist money. The Tehama County Board of Supervisors voted 3-2 in support of the designation in May. County documents said the need for the designa- tion included population growth in the Redding and Red Bluff areas that increased use of the land and the acquisition of thousands of acres in the last three decades by the BLM. If the designation passes in Congress, addi- tional funding could be available to use for fur- ther development of river and trail access points, parking lots and signage. Daily News Staff Writers Tang Lor, Julie Zeeb and Andrea Wagner compiled this report.