Customer Complaints On Loan Modification Firms From Around The Country

The following links are to stories on financially strapped homeowners reporting problems with loan modification companies they hired to help resolve their mortgage problems:

• Mansfield, Ohio: More foreclosures means more scams, experts warn. Anson and Michelle Hare were behind on their mortgage payments last spring. Organizations contacted them, vowing to save theme from foreclosure. The Hares responded to one.
  "We had to come up with $900 and had 30 days to do so," said Michelle, 40, of Butler. "Scraping our pennies, we didn't know it was a scam. Their having an attorney made it (seem) legit." Several months passed, and the Hares got the runaround from the mortgage specialist. Nothing was done, and their money was gone. Tracy Bond, a foreclosure prevention advocate with Empowering and Strengthening Ohio's People, said fraud is rampant -- by phone and by mail. She cited a recent example of a scammer claiming to be a staffer with Gov. Ted Strickland's Save the Dream program, who tries to charge homeowners $1,500 for its services.

• Souderton, Pennsylvania: On the House: Home-loan modifier was no help. As the mortgage payment grew from $948 a month to more than $1,150, Morissa P. Wiley sought help on the Internet and contacted New Hope Modifications of Bellmawr, which promised to work to modify her loan and save her house. For $1,800 up front. "They kept telling me that everything was OK, that they were working with my lender, and not to worry," she said. "They never called me; I always had to call them, and I started getting suspicious." Shortly after the last reassurance from New Hope, she found a notice that her house was destined for sheriff's sale. "I got on the phone and called New Hope," Wiley said. "I wanted to know if they were really working with my lender or if I should start looking for an apartment for me and my children." Her contact "was always off or out on leave." A supervisor declined to return the money she had sent.

• West Sacramento, California: BBB Says Loan Modification Company Is Scam (Roseville-Based Company Issued Desist & Refrain Order). The Better Business Bureau of Northern California is warning consumers about bogus loan modification companies that make empty promises about helping borrowers modify their mortgage loans. The BBB said one such company is ShortRefiNow.Com, based in Roseville. Fourteen people filed complaints with the BBB. They said they paid between $2,600 and $5,300 up front to ShortRefiNow.com to get their loan modified, but the company did not perform or refund their money. ShortRefiNow.com told KCRA 3 by phone it is looking for licensed attorneys to take on their existing clients and they are not taking on any new clients.

• Kirkland, Washington: Investigators: Loan mod offers bring even more mortgage troubles. The interest on Della Lorenzen's adjustable rate mortgage was about to soar and her payment on her home in Roy was about to balloon by $500 a month. Then MCA Consulting of Kirkland called and offered to negotiate a loan modification with her bank. [...] "I don't believe they had any thoughts of helping me at all," Lorenzen said. Lorenzen says MCA refused to refund her $3,500 fee and says her home is now on the brink of foreclosure. [...] A state license is required to perform loan mods and regulators confirm MCA is under investigation for unlicensed work. Lorenzen was required to pay her fee up front, which authorities say is illegal and a big red flag.

• Fresno, California: Foreclosure Fraud, Phony "Rescue Firms." After years of renting, the Mizer family bought a house in 2005 for nearly 88-thousand dollars. Two years later, Kari and her husband Roger saw the rate on their adjustable mortgage shoot up way beyond what they could afford. They looked for refinancing from more than 40 lenders with no success. Then they got a letter from a mortgage restructuring firm that claimed to have a "95-point-5 percent resolution success" rate in stopping foreclosures. The company charged more than 13-hundred dollars upfront and said it would handle everything. But the Mizers say that's the last they heard. A month later their bank started foreclosure proceedings, telling them it had never been contacted by the company.