Prevent Loan Scams
Real Stories

Anthony L. from Havervill, Massachusetts

Anthony proactively contacted both of his lenders in February 2009 about getting a loan modification. His work as a product engineer for a major medical supplier paid his bills, but his large student loan payments made him worry he would soon be unable to afford his current mortgage payments. The lenders sent him confusing paperwork, and he filled it out to the best of his ability, but when he contacted the lenders, they told him they never received anything and sent him more paperwork. After numerous phone calls to his lenders for help, Anthony began to look elsewhere.

While browsing the Internet for advice, Anthony came across a California based company claiming to have attorneys with 40 years of experience securing beneficial loan modifications for distressed homeowners like him. All Anthony had to do in return was make four monthly payments of $1,600 that were fully refundable if he did not receive a loan modification in four months.  The company instructed him to execute a written retainer and a power of attorney, granting them the authority to negotiate with his lenders.

After making his third payment, Anthony grew suspicious. He never received any updates. When he made a concerned call to the company, they transferred Anthony to the negotiator assigned to his case. She was not an attorney, and she did not have any answers for him.

Months passed with no response and no loan modification. Anthony called his lenders and learned that no one from the company contacted them on his behalf. Upset, Anthony called the company, and told them he was revoking the power of attorney.  His negotiator said he would be getting an offer from his lender soon, but she was unaware of the exact contents of the offer. In February 2010, Anthony received a package from his lender. They would reduce his monthly payment by a paltry $82 a month, and if he accepted this reduction, the lender would increase the principal balance on his loan by several thousand dollars.

Anthony refused his lender's offer. He sent the company a letter demanding they refund his money. Despite their initial money-bank guarantee, the company is now telling him all refunds are subject to the approval of the attorneys representing him. To date, Anthony has never spoken to any of these attorneys, and he hasn't received any of his money back. Because of the money he paid to this company, Anthony can no longer afford the payments for his second mortgage.