Home Loan Scams

LOS ANGELES - For months, Antonio Villagra worried that his Granada Hills home would be taken away. "I missed one payment," said Villagra, "and I had the money. But they told me for the modification I had to be behind one month to qualify."

Villagra had never been late on a payment, but wanted to modify his loan to get a better interest rate. Just after his wife passed away, he trusted a company that called him on the phone.

"The first thing they asked me was 'you have to bring in the check for two-thousand-two-hundred dollars to start it," he said. Villagra brought in the check, but the company, Prominent Financial Solutions, never got him a loan modification, and when employees stopped returning his calls, he looked for help.

Villagra went to Maritza Gutierrez and her staff at the County of Los Angeles Department of Consumer Affairs Real Estate Fraud and Information Program, where they got his money back, and got him the free help he needed.

"Obviously if the homeowner can't make a mortgage payment then they shouldn't," says Gutierrez. "But if they're telling them on purpose not to make a mortgage payment, then they're in violation of all these offers the government is trying to give homeowners."

Gutierrez says most of the homeowners who call her feel as if it's almost too late.

"Do they show up at your office?" asked news anchor Emmett Miller. "They show up at my office," answered Maritza, "and they're crying. And they're barely making it to eat. And nonetheless to pay 5-thousand dollars to a company that didn't do anything for them!"

Gutierrez says there is free help that her office can recommend. Investigator Gutierrez and her team got Antonio Villagra's money back, but we wondered if the company Prominent Financial Solutions was still doing business.

We went to Bellflower to find out, but their office was now a gym. But the owner for the gym, who used to work for Prominent Financial Solutions, told us we could get a loan modification two door down at the lawyer's office there. By phone, the attorney who runs the office, Wilo Nunez, said he had not heard of Prominent Financial Solutions, but several of his employees told us people who used to work for Prominent were now employed by attorney Nunez.

On hidden camera, one employee said: "Well we used to be Prominent but it's all been switched over to the law office just to make everything a little bit more certified as far as modifications go."

Also on hidden camera, an employee gave us the same advice as Prominent Financial had told Antonio Villagra: to fall behind in your mortgage payments to help you get a loan modification.

Informed about that statement, attorney Nunez said the employee may have said something unethical and could be fired for it, but he did not ask us who the employee was.

We also spoke to real estate attorney Seth Hicks of Greene, Fidler, Chaplan and Hicks LLP.

"We've had many horror stories," said Hicks. "In fact, I'd say one out of 4 calls that we get are from borrowers who have previously gone to loan modification companies and been completely unattended to and unable to meet loan modification."

Hicks says homeowners should be wary of unreputable loan modification companies and lawyers, but also says loan documents are so complicated, most consumers can't understand them well enough to represent themselves.

"An unrepresented borrower is like a sitting duck to a bank," says Hicks. His client "Terry" agrees. He says he has peace of mind after hiring Hicks to try to prevent a foreclosure on his house.

"You're talking about the number one investment in your life probably, your home," says Terry. "So it's worth it to seek the counsel of an attorney, and not try to do it on your own."