Homeowners Fall Victim To Loan Modification Scam

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.

Comments

One Comment

  1. John Holmes says:

    MY FRIEND PAID A COMPANY $4,500 CASH UPFRONT 2 YEARS AGO TO DO A LOAN MODIFICATION AND HELP GET HIS CREDIT CARDS PAID OFF FOR ABOUT 20% OF WHAT HE OWED ON THEM. THEY HELPED HIM PAY OFF ONE CREDIT CARD OF A $13,000 BALANCE FOR $3,000. FOR THE LAST 1 1/2 YEARS HAVE DONE NOTHING FOR HIS OTHER CREDIT CARD BALANCE OF $40,000 AND NOTHING FOR HIS LOAN MODIFICATION. HE GOT RIPPED OFF FOR WHAT THEY DID FOR HIM AND NOW HE REALIZES THAT HE IS NOT GOING TO GET ANY MORE HELP FROM THEM.

  2. George says:

    I am so sick of these articles and people saying those poor poor homeowners. If they’re so dumb as to send someone sigh unseen $4000, I’m not surprised they bought a home that’s underwater, thinking that could never happen.

    That’s the problem with this whole mortgage mess. Predator lenders is such hogwash; these people didn’t have the sophistication or means to buy a home, and the government was pushing everyone to buy oine anyway, and forcing the banks to make risky loans.

    1. Lou Luna says:

      Yea but the crooks in wall street pushed the homes to over inflated prices worth double of what they were actually worth

      1. Phil says:

        That doesn’t even make sense. Owners and Buyers set the prices of homes-they have nothing to do with Wall Street.

  3. mv says:

    i hope they find those cons.

  4. I really knew about much of this, but in spite of this, I still considered it was beneficial.
    Excellent blog!
    Fantastic blog, very informative. I urge you to continue to write such wonderful pieces of literature, it really inspired me!
    I often read your blog and always find it very interesting. Thought it was about time i let you know…Keep up the great work

  5. Katherien Peoples says:

    I have a non-profit organization http://www.hppcares.org we would like to help you keep your home. Please give us a call at 562.424.4477 Our service is free and we would like to help. Can you please pass our information on to this homeowner. We are also having event on the 19th of Novemeber Carson Community Center 9 to 4

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