Saturday, August 27, 2005

Another Breed of Squaliforme Surfaces - Eric McDougal

Just when you thought it couldn’t get any worse, now comes a new breed, a mortgage lender/broker who works in collusion in advance with the Echeneidae Collectoris.

Offering kick-backs to collectors for referrals for high-interest loans, one Eric McDougal, a Sacramento-based mortgage broker, is ever the self-promoter. Finding his way on to a web site forum for collections “professionals” he touted his “services” to the crowd:

What are "anyones" feeling on referring out the debtor to a mortgage company to help pay off the debt within a 2 week period and making your EOM (end of month)?

I can help. I am a loan officer in California and have been working with collectors for the past 3 years. I can do lending in all 50 states, so there's no need to be looking for a broker in each and every state. I keep in constant contact with my clients and my collectors and will never ask to settle a referred debt.

Please contact me at and I will explain more and what we can do for each other.

Eric McDougal

One of the more savvy Echeneidae mentioned there can be problems with the TILA-required 3-day rescission option - and Eric’s response?

Well, let me explain what I do in the case of the 3 day recision....... Are you ready.... this is pretty big.... I will do a check by phone, out of my own accout and then be remburised by the title company.

2. Checks will NEVER be cut directly to the debtor, I have my title company do a direct wire into your companies accout.

3. I am self employeed... If I don't close, I don't eat. I am NOT a direct lender, I am a mortgage broker. Therefore I can use many many lenders to push loans thru. From manufacter homes to Texas loans with a hundred head of cattle on 100 acres.

Now, on the question for credit scores. There is one lender that will go down to 475 fico. Unfortantly that will only come with a 65-70% LTV (loan to value). I like to stick to 500 and above in which I can get a loan secured at 80% LTV (as long as there are no mortgage lates) and with some of the lender's that I use, I can get an extra 5% exception, if needed.

ALSO, I like to put on contests within the office.. Some of the collection agencies that I have worked with will allow me to give away Mexico Trips or other kind of incentives for the collector that funds the most loans.

I agree with you, a lot of lender's CAN'T close a window, but
I like to work hand in hand with the collector to put the fear of God into the debtors and keeping in constant communications.

Give me a shot, you won't be disappointed.
What'll you bet the borrower doesn't realize they're not getting a check for the amount they were expecting until after they sign at the closing? And isn't it a great idea to be working with a mortgage broker who likes to work hand in hand to put the fear of God in you?

When dealing with someone with an apparent 5th grade education and spelling skills, one should expect to be at least disappointed. And as to another question about having the consumer's credit reports fixed:
100% of my pipeline is collection referrals.

You are correct in thinking that the "smarter" consumers are going to request that their neg. tradelines be deleted, but the honest answer is.... they don't.

These are consumers that, well, had a bad month and decided to "charge it" with hopes that money would be coming in the prior month. The only thing I've ran into with a knowledgable consumer is refinancing fees, in which I will work those out with them until we become in agreement, but, the negotiations can only last so long with the collecter calling and calling with the threat of legal actions. At that
point, the debtor just wants to get it over with.

Notice there is never any concern that the debt might be completely invalid? Doesn't matter to guys like Eric McDougal.

Again, converting unsecured debt (valid or not) into secured debt is just one of the industry’s goals and the low-lifes like Eric are out there beating the drum to collude and put people further into jeopardy while spreading the wealth with kick-backs off of what might be completely invalid debt.

And you don't suppose the lenders stepping into these scams are of the high-caliber, upstanding variety, now do you? Sure they are. And it don't rain in Indianapolis in the summertime.

What we see happening is taking a few thousand dollars of possible debt, turning it into a predatory refi loan that's secured by the victim's property, and then handing that off to one of the sub-prime servicer Squaliformes.

If you ever talk to a mortgage broker out of California by the name of Eric McDougal, hang up and don't return further calls.

McDougal better not show his sorry arse in these parts. We have places for people like him. Cold as all get-out in the winter; hotter'n hell rest of the time. I'd recommend a new line of work but most require honesty and moral turpitude.

Tuesday, August 16, 2005

Unchecked Power Demonstrated Once Again.

As noted here previously, “” has been a scam from the get-go, luring consumers into alleged credit scoring for free, all the while only setting people up to find out they aren’t getting what they really need unless they pay. Worse yet, even setting them up into paying for a $79.95 per year charge (in advance, of course) if they didn't realize they had to cancel the bogus "service" within 30 days.

Well leave it to the FTC to belatedly go after the schemers and finally make it look like they’re doing their best to protect the millions of victims of the credit scoring cabal.

Under the guise of things like “” and its subsidiaries Qspace and Ispace, none other than data broker Experian had found yet another way to fleece consumers.

But once again, the toothless FTC is getting zip compared to the damage done and business goes on as usual.

And like most FTC announcements, this one plays to the supposed diligence of the FTC:

"Consumers paid the price for ordering free credit reports from," said Lydia Parnes, director of the FTC's Bureau of Consumer Protection. "It's unfair and deceptive to promise consumers something for free and then trick them into paying for products they didn't want in the first place."

So why the paltry $950K fine? And why did it take more than three years to bring the practice to a halt?

Well, you can only chalk another one up to the unmitigated power Experian has in the halls of Washington.

On this side of the Pecos, letting the perps get away with it this long and with a meaningless fine would get Ms. Parnes fired and then some.

The Honorable Judge Roy Bean.

Monday, August 08, 2005

One to Keep an Eye On up in Michigan

The Katz & Katz "law firm" scam in Michigan has caught the eye of at least one other judge who apparently doesn’t like the status quo.

Turns out Katz and Katz got caught pulling one of the typical bogus-notification schemes against alleged debtors, then walking away with uncontested judgments when the defendant didn’t show up to a hearing they didn’t even know was taking place. Howard Katz is facing 300+ criminal contempt charges for getting caught filing bogus documents in the 25th District court (in nearby Lincoln Park).

To his credit, Judge Stephen Cooper (46th District over in Southfield) has now turned to the Michigan District Judges Association and pointed out that things weren’t fair for average people. (DUH!) Like anyone who's observed these schemes in action, he’s seen things like multiple suits against the same party for the same alleged debt or the typical trick of going after people who have no connection to the debt. And he apparently has “serious concerns…about the validity” of some of the filings the scammers try to pass through the system - and there are about 500 per month in Southfield alone. Cooper's clerk refused to accept 75 cases and tossed them back into Katz's lap when the scammer said he wouldn't try to justify the inexplicable fees and charges he had piled on, so there's going to be more court action on that front.

The good news is Cooper's apparently not the only one who thinks the stench is getting too strong. If he gets enough support from his fellow jurists and can get the State Supreme Court to make some changes, some of the more blatant collection scams might be harder to pull off - at least in Michigan.

The bad news is the Echeneidae Collectoris will eventually try to find other ways around any new rules that are implemented unless the fines and penalties actually put a few of them out of business and some law licenses get pulled.

The Honorable Judge Roy Bean

Monday, August 01, 2005

Well, the Washington Post gets at least part of it right!

The Court hereby notes that Warren Dedrick, head of Marlin Integrated Capital gets the “Squaliforme PR Bozo of the Month Award" for July, with this inanity as quoted by the above-linked article’s author, Caroline E. Mayer:

"In every sector, there are bad apples, but 95 percent of all debt buyers are good, nice business people. I believe hardly any debt buyers break the law, but on the other hand, if you're talking to a consumer once a week for six weeks, it's going to do nothing but alienate the consumer base."

Interesting way the industry is trying so hard to change its image by renaming themselves as "debt buyers" instead of what they really are.

95 percent are “good, nice business people?” "...hardly any debt buyers break the law?" Warren, doesn't that really mean you're trying to cover up the fact that debt buyers are still the same old debt collectors who ROUTINELY BREAK THE LAW?

Coming from the species who lie, cheat, steal and intimidate people, this Court sentences Dedrick to three nights in one of our already occupied cells for making a knowingly false public utterance.

[(Note from the Clerk of the Court: Mr. Dedrick, don’t mind Bubba. He’s a bit weird and testy as all get-out from time to time. You’ll be better off not waking him.)]