Homeowner Gets Clipped For $1500 On Failed Loan Modification; Loses Home To Foreclosure, Then Gets Run-Around From Operator On Promised Refund

In Bakersfield, California, KBAK-TV Channel 29 reports:

• During the foreclosure crisis many homeowners turned to companies to get their home loans modified. One of those homeowners is Zuleyka Ruiz of Bakersfield. Her home was in foreclosure and had a sale date of December 12, 2009.

• On December 6, Ruiz went to Mortgage Solutions which is located inside the law offices of Julio Jaramillo [...].(1) "They asked me for $1500 for paperwork to pay the people, to stop the sale date," she said. Ruiz paid the money, however, a law passed on October 11, 2009 makes it illegal for companies to charge for home loan modifications upfront.

• We spoke with the owner of Mortgage Solutions, Ricardo Melgoza, about why he charged Ruiz even though it was illegal. Melgoza said Ruiz wasn't getting a home loan modification so he could charge her. But Ruiz's paperwork says she was getting a modification. Regardless, Mortgage Solutions couldn't save her home, and on December 29 she called the company about getting her money back.

• Ruiz said she spoke to Melgoza who promised to give her a refund during the first week of January. [...] After Eyewitness News approached Melgoza about Ruiz's refund, he said Ruiz would get her money the first week of March. That didn't happen. Melgoza told Eyewitness News if this story made him look bad he wouldn't pay. Meanwhile, Ruiz is still out $1,500. "It's a lot of money and it's a lot of money that is not mine," she explained. "I got the people from other people that want to help me to keep my house."

• To prevent future clients from not paying for his services Melgoza said he plans to up his prices from $2,000 to $4,000-5,000.

For the story, see Homeowner wants refund for loan modification that didn't happen.

(1) An upfront fee loan modification outfit located inside someone's law office??? This arrangement sounds like it could be similar to the numerous "lawyer renting" loan modification rackets that authorities like The State Bar of California and others are currently busting up. See, for example, Southern California attorney arrested for loan modification activities.