Suspect Loan Modification Firm Hit with Civil Charges, Accused of Scamming Consumers
ABC News Investigation Exposed Company Promising to Modify Mortgages
Following an ABC News investigation that exposed a suspect California loan modification company taking thousands of dollars from desperate homeowners while providing little to no help with their lenders, civil charges have been filed against the Nations Housing Modification Center (NHMC), the Federal Trade Commission announced today.
At a news conference in Washington, FTC Chief Jon Liebowitz said that charges had been brought against the NHMC of San Diego, whose operations were essentially shut down after authorities raided the offices following reports on Good Morning America and World News.
"In our case against the so-called Nation's Housing Modification Center, the malefactors guaranteed to modify mortgages," Liebowitz said. "They required a minimum upfront fee of $2500 or 3000 or more but they failed to deliver on those promises. And they made the situation worse by actually telling the people who signed up for them not to make any more mortgage payments – that resulted in some consumers losing their homes."
"Just as disturbing," he continued, "this outfit bombarded homeowners with direct mail, making their companies look like the federal government's Making Home Affordable program. That program really does help distressed families in need and…they do it for free, not for a fee."
Liebowitz held up a company envelope with an address based in Washington and an official-looking seal. The envelope, he noted, even had a warning that tampering could be a crime, a statement usually found on government mail.
Former NHMC employees told ABC News the company was little more than a "boiler room" operation filled with telemarketers reading from a special script targeted at anxious homeowners facing foreclosure.
"They're convincing people to give money to them in advance, promising to do something that they're not doing, that they don't even have the resources, capabilities, knowledge or manpower to do," said former employee Tom Fatica.
Fatica said he was fired from NHMC after he questioned the absence of the attorneys and accountants who were supposed to help homeowners.
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