Feds Investigating Alleged Loan Modification Scam

By Laura Geller - bio | email

Posted by Terry Alexander - email

RICHMOND, VA (WWBT) - For many of us, owning a home is a lifelong dream. Imagine how you would feel if someone put that dream in jeopardy. That's exactly what investigators are accusing one company of doing.

The allegations are outlined in a federal lawsuit. It alleges that a company called Hope Now Modifications is taking people's money to prevent them from losing their homes, but the government says that company is doing very little with that money.

These are desperate times for Jill Edwards. When she could no longer afford to pay her mortgage, she gave Hope Now Modifications $1,300 to modify her loan. After hearing nothing from the company she was two days away from losing her home. She had no idea the company was being investigated by the government for allegedly scamming customers.

The Federal Trade Commission says Edwards is one of 2,000 people the company scammed out of 4.5 million dollars. Investigators say one of the first red flags for consumers is simple: You should never have to pay money to get out of financial trouble.

"Your money is better spent on paying down your mortgage or getting out of whatever arrears you have, then padding the pockets of a scam artist," said FTC lead attorney Gregory Ashe.

He goes on to say the best first step, if you're one of the many people in financial distress, is going to a HUD approved counseling agency like "HOME" right here in Richmond.

Jill Edwards' family eventually came to her rescue. But, she still can't afford her $1,300-per-month payment. HOME discussed the many options available. Now, it's just a matter of paperwork and approval.

While hindsight is 20-20, this is information Jill Edwards wishes she had known earlier and a warning the government hopes to spread.

We talked to lawyers for Hope Now Modifications. They say the company got bad legal advice from its original lawyers, and have even filed a complaint against that firm.

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