Reports of loan modification rip-offs increasing | Attorney General’s Consumer Resource Center

Vianna Engel was determined to hold on to her home. “If I lose my property, my elderly mother loses her home, too,” Engel this week explained to a staff member at the Attorney General’s Office. Her mom’s single-wide mobile home sits on Engel’s property in Rochester. “She took care of me and I’m not going to let this happen to her.”

Vianna Engel was determined to hold on to her home. “If I lose my property, my elderly mother loses her home, too,” Engel this week explained to a staff member at the Attorney General’s Office. Her mom’s single-wide mobile home sits on Engel’s property in Rochester. “She took care of me and I’m not going to let this happen to her.”

But Engel fell behind on her mortgage payments after having major surgery and facing over $5000 in out-of-pocket expenses. She received a dreaded foreclosure notice. During the crisis, which Engel calls the worst thing she’s ever experienced, she also lost $2500 to a common scam: an offer to help modify her loan for an upfront fee.

“Offers of mortgage help for a fee exploit people in their darkest hours,” said Washington State Attorney General Rob McKenna, whose office again today warned about these scams. “They convince people to pay a fee for something they can receive for free.”

McKenna warns consumers to be on the lookout for television and radio advertisements, flyers, mailings, e-mails and phone calls from those offering mortgage help for a fee. Scammers comb foreclosure filings, which are public records, for new victims. Often the offers come from companies with names that sound like law firms. Sometimes they offer “loan audits” in which they promise to examine your loan for legal claims you can use to stop a foreclosure.  However, these audits are often inaccurate and are never enough to stop a foreclosure. McKenna adds that such audits are no substitute for obtaining legal advice from a licensed attorney.

Representatives working at the Attorney General’s Consumer Resource Center are reporting an uptick in complaints about these scams, which they call “third party loan modification offers.” The Washington State Bar Association is also seeing an increase in the number of inquiries about firms or individuals, many from out of state, that claim to offer help with loan modifications. A common theme is that the homeowner loses $1500 to $3000 and no modification is granted.

Engel paid the $2500—in installments, since that’s all she could afford— to the Home Credit Law Center, which she had seen advertised on television. When she told the company that it would be tough for her to pay them, she says they implied it would be easier than she thought since she didn’t have to pay her mortgage for a few months. The company did not obtain a loan modification and her lender ended up tacking $10,000 in missed payments on to the principal of her loan. Fortunately, when Engel gave up working with the Home Credit Law Center, she was able to work out an arrangement with her bank and keep her home.

Instead of falling for third-party loan modification offers, McKenna suggests a much simpler idea: call the Washington Homeownership Information Hotline at 1-877-894-HOME. The hotline, funded in part by settlements reached between the Attorney General’s Office and mortgage lenders, along with the State Department of Financial Institutions, connects borrowers to free counselors and, in some cases, pro-bono attorneys. He also requests that those who have been victimized by a loan modification scam file a complaint with his office. Information about how to file a complaint may be found atwww.atg.wa.gov.

 

More in Business

Keep the holiday spirit all year long | Don Brunell

During the holidays, our thoughts naturally turn to giving — not just giving gifts, but donating our time and money to charities, disasters and community programs.

Remember 1993

Twenty-five years ago, business took a beating in Olympia. The swing to the left in the 1992 general election was swift and potent. It drove higher costs to employers and more government regulations.

Remembering Ed Carlson, Vietnam POW

Since last Veteran’s Day, Ken Burns’ in-depth documentary on the Vietnam War has aired. It is a powerful reminder of an unpopular war in which many “baby boomers” fought and died.

Rural prosperity essential to Washington

While Seattle is growing rapidly, our rural areas continue to struggle. They don’t have the corporate giants such as Amazon, Microsoft and Boeing creating jobs and economic opportunities. Farms are predominantly family-owned.

Amazon’s plan reminiscent Boeing’s Chicago move

Last year, Seattle Times aerospace reporter Dominic Gates wrote about the similarities and differences between Boeing’s corporate office move to Chicago and Amazon’s plan for a second headquarters.

LiveLocal98022 meeting cancelled

Bob Green, the night’s speaker, notified the organization he couldn’t attend due to an illness.

Expanded Panama Canal among challenges for Washington Ports

The $5.4 billion spent to expand the Panama Canal is paying off for East Coast and Gulf of Mexico seaports; however, it is putting more pressure on the Northwest to remain competitive.

Players taking a knee hurting the NFL | Don Brunell

On a recent Saturday afternoon in Portland, a young woman stepped onto the playing field at the beginning of the University of Montana vs Portland State football game and started singing our national anthem. She immediately drew a blank on the words and briefly stopped, but as she started apologizing, the fans spontaneously took up the singing.

New metal collecting machine may clean up contaminated waters

There is a new machine being tested in Montana which could decontaminate toxic mine tailings while recovering valuable precious minerals for everyday use.

Workshop will focus on business, social media

All are invited to learn how social media can impact business and how it can be used to create a positive experience for customers.

Impact of Hirst decision must be address

In Washington, the legislative stalemate over permitting new household wells and the state’s construction budget has not only delayed needed funding for public projects, but triggered yet another salvo in the wider conflict over future supplies of fresh water for people, fish and farms.

Mitigate massive wildfire danger | Don Brunell

At last count firefighters were battling 82 major wildfires in 10 western states. The fires have already scorched 2,300 square miles of forests and range lands, dislocated thousands of people, and burned hundreds of homes and buildings.