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Homeowners Fall Victim To Loan Modification Scam

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LOS ANGELES (CBS) — In the current economic climate, desperate homeowners who have fallen on hard times can become easy prey for scam artists. Knowing the law is the first step to avoid falling for a predator’s schemes.

Michelle and Greg Backus paid $300,000 for a home that is now worth $118,000. To make matters worse, Greg is now out of work.

The Backuses say an online company based in San Diego advertised a guaranteed loan modification that would reduce their interest rate to three percent.

They sent in the required $4,000 fee and never heard back.

What the Backuses didn’t realize is it’s illegal in the state of California for a company to charge an upfront fee for this type of service.

What they also didn’t know is they could have found help for free.

The Home Ownership Preservation Foundation takes four thousand calls per day. They’re just one of more than 2,500 non-profit groups nationwide set up to help borrowers like the Backuses save their homes.

The company that took the Backuses’ money has since changed their website, mailing address, and phone number. Calls to the company were not returned.

“It ruined everything,” says Greg. “We’re not even starting over; we’re in a hole. I could lose my house right now.”

The Backuses are still fighting to get their $4,000 back.

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