NORFOLK -- Housing Opportunities Made Equal of Virginia, Inc. (HOME) and the National Fair Housing Alliance released a report documenting the ways in which companies offering loan modifications to save house take advantage of homeowners heading towards foreclosure.
The report comes after a year-long investigation into practices companies use targeting homeowners at risk through direct mail, email, and telephone. Many ask for huge, unlawful fees, but don't live up to promises to help.
"No one can modify your loan but the servicer," explained Tuwana Jones who is a housing counselor at The Up Center. "If they're just saying they're modifying it, they have no power. They're just taking all of your information, all your money, and they're not getting back to you."
"We were only two months behind in a house payment," began Theresa, who asked to be identified only by that name. "Someone called, and they say, you know, 'a stimulus from Obama,' and it sounds so good to hear, and I told hem we were only two months behind. 'Oh, that's perfect,' you know. 'We're doing some loan modification. You are well-qualified.'"
Theresa paid the company that contacted her $1,000. Months passed. Her home of more than 20 years which she hoped to save went into foreclosure.
"I just cried, and cried, and cried," Theresa told 13News. "We all lost our house."
Jones said the Obama administration created the Home Affordable Modification Program (HAMP) to help keep people in their houses. Companies offering their own form of help for a price exploit that fact, doing the name dropping Theresa heard.
"'Obama. The President said that you're supposed to be able to do this.' They just use his name," said Jones. "I mean, if the President can't do it, who can?"
Because foreclosures are made public, Jones added that businesses have access to a wealth of information, including how much a homeowner owes, what mortgage company services the loan. She also said people at the companies are familiar with the lingo, many bringing a lending or real estate background with them.
If there is a problem with your mortgage payments, Jones recommends contacting your servicer (mortgage company) right away and making sure it has all information about your situation. Each mortgage company is required to give homeowners a toll free number for the United States Department of Housing and Urban Development (HUD). HUD refers a homeowner to a non-profit group, such as The Up Center, which will help with the loan modification process.
Virginia Attorney General Ken Cuccinelli’s office has met with HOME and was provided information collected through the course of HOME's investigations.
"We can confirm that we have previously filed lawsuits against three Tidewater-based entities, but cannot confirm or deny whether any additional investigations are taking place," spokesman Brian Gottstein told WVEC.com.
He said two Va. Beach companies -- Nationwide Loan Modification Bureau, LLC (Nationwide) and Real Estate Resolutions, LLC (Real Estate Resolutions) -- allegedly charged illegal advance fees of up to $1,200 before performing “foreclosure rescue” services for their customers.
There has been no settlement of these allegations.
A settlement was reached with Chesapeake-based American Neighborhood Housing Foundation over fees charged to 273 people.
