BBB warns of shady foreclosure rescue firms

Herb Weisbaum • Profile • E-mail

Kent and Kimberly Leser had a lousy weekend. They moved their three children and the last of their belongings out of their house and into the home of Kent’s parents. The Leser family lost their $135,000 house in Cookeville, Tenn., because they couldn’t make the mortgage payments and turned to the wrong people for help.

Kent, who doesn’t have health insurance, got sick last December. The hospital bill came to more than $38,000. He used the family savings to keep his commercial cleaning company going while he recuperated.

“I made good money,” Kent told me. “We just got so far behind that all the money in the world didn’t seem to help.”

The Leser’s mortgage company wouldn’t work with them, so Kent went online searching for help. He wanted to save his house, but he did not want to file bankruptcy.

In May, the Lesers signed a contract with Mortgage Assistance Solutions LLC of Clearwater, Fla., one of a growing number of companies that are profiting from the rising wave of foreclosures that has followed the housing bust.

They agreed to pay $1,300 to enroll in the company’s Fresh Start program, which promises to help homeowners who have fallen behind on their mortgage payments with "creative" solutions. Mortgage Assistance Solutions said it would take care of everything and told the Lesers not to contact the mortgage company.

Kent says he got a call from the lender in July warning him that he was about to lose his house. He called Mortgage Assistance Solutions and asked for his money back. The company  reduced the fee to $1,000 but would not refund the rest.

Where to get help A million families will face losing their homes this year. “Act, don’t avoid,” says Douglas Robinson with NeighborWorks America. “Call someone because the longer you wait, the harder it gets.” Homeowner’s HOPE Hotline National Foundation for Consumer Counseling HUD: Find a Housing Counselor

The Lesers complained to the Better Business Bureau. Mortgage Assistance Solutions responded by saying Kent Leser “breached his agreement” with them when he spoke to his lender.

In its response to the BBB, the company said the lender declined to offer a mortgage "workout" — a fact that was intentionally not disclosed to the Lesers.

“We had other options to look into and we were not going to cause the client undue stress by telling him the lender will not work with him," the company said in its statement.

Mortgage Assistance Solutions now has an “unsatisfactory record” with the Better Business Bureau due to a pattern of complaints and the failure to correct the underlying reason for those complaints.

Cynthia Bode, director of quality control at Mortgage Assistance Solutions, calls the 145 complaints filed with the BBB “a fraction of a percent of the clients we’ve dealt with.” She says the company responds to every complaint.

Scams on the rise 
The Better Business Bureau has received complaints from across the country about foreclosure rescue companies. A majority of the companies are located in Colorado, Georgia and Florida, states with among the highest foreclosure rates.

In most cases, the pitch starts with a letter or postcard. “Stop the sale of your home,” they say. “We will keep you in your home — GUARANTEED!”

The fee is usually about $1,200, but some victims have lost as much as $2,000.

“Unethical companies are seeing their chance to step in and make some money off of these troubled homeowners,” says Karen Nalven, president of the BBB in Clearwater. In the last 12 months her office received more than 325 complaints about these companies. The total amount of refunds requested is more than $600,000.

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