Instafi President and CEO Sean Roberts from an undated Instafi television commercial.

Helena Cameron needed help paying her mortgage after she quit her job to care for her sick mother and her husband was laid off. She paid $1,500 to Irvine-based Debt Barter to help her negotiate a deal with her lender.

But the company fumbled her case and hasn’t returned her money, she said.

While she was making payments to Debt Barter, the California Department of Real Estate ordered the company to stop taking money from consumers like Cameron. Sean R. Roberts, founder of Debt Barter, declined to comment for this story, beyond saying Cameron is scheduled to receive a refund in August.

Amid record loan defaults and a lingering recession, companies have sprouted in Orange County and across California promising to help people avoid foreclosure.

But state officials and consumer groups say many of these companies are taking money from desperate homeowners and doing nothing for them.

The Department of Real Estate is cracking down on companies practicing without a real estate license, or for not getting its approval before accepting an advance fee to negotiate a loan modification. Last month it had 750 open cases, up from just 10 a year earlier.

Consumers can see a list of companies and individuals that have been reprimanded by the Department at There are more than 200 names on the list, though some are duplicates.

Still, the department has limited powers. Attorneys, for example, can collect advance fees without its approval and don’t need a real estate license to negotiate a loan modification.

And all the agency can do is order a company to stop. It is up to criminal prosecutors to pursue cases against abusers who ignore state laws.

From high roller to loan mod helper

Sometimes the people promising help were the same ones who churned out loans during the housing boom.

Long before Roberts founded Debt Barter he ran, a now defunct Irvine company that refinanced home loans over the telephone or Internet.

During housing’s heady days, Instafi processed more than $500 million in loans per quarter and employed 380 people. Roberts, who pitched the company in TV commercials, drove a Ferrari and a Mercedes-Benz and took friends on chartered jets to golf vacations in Cabo San Lucas.

After mortgage rates bottomed, the refinance shop imploded in December 2003, leaving employees with bounced checks and owing creditors $38 million. Creditors have yet to be paid because of pending litigation, said Richard Golubow, an attorney for Credit Management Association, which is handling Instafi’s liquidation.

Roberts tried lending again under the name PremServ, but the California Department of Corporations shut its lending subsidiary down in 2004. It didn’t have a license, the department said.

The great housing collapse brought Roberts back in business. He set up Debt Barter in an office in Irvine’s business district alongside John Wayne Airport and began soliciting customers in 2008, according to state records.

Cameron said after she started missing payments on her house, someone from Debt Barter called her and promised to help, for a fee. She thinks they may have found her after her lender filed a notice of default, which is publicly available at the county recorder’s office.

She paid Debt Barter $750 in January, the month the Department of Real Estate issued a desist-and-refrain order against Roberts for doing loan modifications without a license, and another $750 in February.

But she never got any paperwork from her lender, originally Countywide Financial, and later Bank of America. Meanwhile, employees of Debt Barter either ignored her or asked for more money, she said.

“I had to call every day and they never returned my calls,” Cameron said. “I called Countrywide. They didn’t know who the hell Debt Barter was.”

Debt Barter did eventually contact Countrywide, but submitted incorrect information, Cameron said.

Cameron eventually hired another company, which did get her a loan modification. Now she just wants her $1,500 back from Debt Barter. But her calls have been ignored she said. Fed up, she visited the office and spoke with Roberts.

“He’s a talker … You are just in shock how he can talk,” Cameron said. Roberts told her his company is struggling.

“He basically told me, ‘What do you want me to say, I don’t have any money,'” Cameron said.

Roberts told her he planned to return her money in August. She filed suit last month against him in small claims court.

Policing the helpers

Roberts and Debt Barter broke the law by collecting money for loan modifications without a license, according to the Department of Real Estate’s desist-and-refrain order. If they collected money from Cameron or anyone else after the order was issued, then they are inviting criminal prosecution, said Tom Pool, a spokesman for the agency.

It’s now up to the District Attorney to decide to pursue a case, he said.

Susan Kang Schroeder, a spokeswoman for Orange County District Attorney Tony Rackauckas, said the DA’s office is investigating several loan-modification cases but none that she could discuss. She said victims should call their local police department first. If police can’t help, then she recommends completing a consumer complaint form online at, and as a last resort calling the DA’s fraud task force at 1-714-347-8691.

To be sure, not all companies collecting fees are potential scammers.

The Department of Real Estate has approved more than 200 companies to accept fees from consumers before helping them.

Kevin Stein, associate director of the consumer advocate the California Reinvestment Coalition, says that practice is misguided.

“We are concerned that in approving fee agreements, the (department) may be seen as endorsing companies that may wind up taking advantage of people,” Stein said.

His organization would like the department to stop. In Stein’s view, consumers should only get help from nonprofit organizations that don’t charge fees.

And the agency has no power over attorneys who can collect advance fees from consumers – essentially a retainer.

The California State BAR has cautioned lawyers about the practice and on Tuesday filed its first case against an attorney. The BAR alleges Sean A. Rutledge, currently with the United Law Groupin Irvine, accepted $1,750 from a consumer but never negotiated a loan modification and failed to return the money for months after a refund was requested.

Rutledge, in a statement to the Register, said he could not comment on anything related to a former client. He added, “United Law Group has worked with the banks to modify loans on hundreds of homes. The firm has countless testimonials from people who have gone on record to highlight the result of our efforts. The real question to ask yourself is how many homes will the State Bar’s persecution of myself and other real estate attorneys save?”

Nationally, the Federal Trade Commission has taken action against some of the biggest advertisers of loan aid.

In April, for example, the commission accused Irvine-based Federal Loan Modification Law Center of charging up-front fees of $1,000 to $3,000 for help getting a loan modification, but often failing to get any change in a loan’s terms. Employees repeatedly ignored consumers after they paid, the complaint says.

The complaint also alleges that in radio and TV ads the company falsely suggested it’s affiliated with the federal government. The FTC prohibited the company from any further misrepresentations until the case is resolved.

Nabile “Bill” Anz, managing attorney for Federal Loan Modification and one of the peopled named in the FTC’s complaint, said in April that his company may have been aggressive, but it has obeyed the law.

He proclaimed his willingness to work with agency authorities to change any practices they condemn. And his company refunds consumer fees if it fails to get a loan mod, Anz said.

With so many companies under fire some politicians and regulators are questioning the practice of accepting advance fees. The FTC is considering a ban and taking public comment until July 15. And at least two bills in the works in the California Legislature would outlaw the practice. But it’s unclear if any of those proposals will ever become law.

For now, buyer beware.

Register staff writer Andrew Galvin contributed to this report.

Contact the writer: 714-796-6726 or

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