The same mortgage brokers that steered home buyers into mortgages they couldn’t afford are now steering home owners staggered by those mortgages into modification programs.
And these programs aren’t much more helpful to consumers than the original mortgages, The New York Times reports.
The former mortgage brokers have simply turned into mortgage modifiers. They often fail to deliver on promises to keep beleaguered homeowners from getting booted, a Times investigation found.
“We just changed the script and changed the product we were selling,” Jack Soussana, former head of Federal Loan Modification Law Center’s (FedMod) Los Angeles sales office, told The Times.
Charging as much as $3,495, Soussana and his colleagues promised to negotiate with lenders to lower payments on soured mortgages in Southern California.
“Our job was to get the money in, and then we’re done,” Paul Pejman, a former FedMod sales agent, told The Times.
“I really feel bad. I had people calling me crying, and we were telling them, ‘You can pay me or you can lose your house,’ ” he said.
“People were giving me every dime they had. … But I never saw one client come out of it with a successful loan modification.”
Unfortunately, mortgage modifiers have plenty of customers on which to prey.
Foreclosures soared 15 percent in the first half of the year from the same period in 2008.
“This is one thing that is getting worse month by month," IHS Global Insight economist Patrick Newport tells U.S. News & World Report.
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