Warning About Two Mortgage Debt Relief Scams Issued by Michigan Official
A Michigan official is warning consumers about two potential mortgage debt relief scams operating in the state that may be trying to take advantage of consumers who are facing foreclosure.
Ingham County Register of Deeds Curtis Hertel, Jr. alleged in an interview that he has received complaints from residents about the business practices of Hope for Hamp and Mortgage Relief Center, two Florida-based debt relief businesses.
Mortgage Debt Relief Software is Bogus
Hertel said that Hope for Hamp, a company that describes itself as a nonprofit organization, markets on its website that it sells software to help residents file mortgage modification claims. However, when Hertel called the company, he was told a very different story.
Hope for Hamp “started out talking about software but quickly changed the subject to modifications,” Hertel said. “[They said] that they worked with hundreds of banks across the country to get people modifications. Every time I asked about the software they said it was not important and that they were trying to save my home. They also used terms like ‘bank of unamerican’ to sympathize with my plight. The ‘software’ was $795, although they seemed to be the ones using the software. They also said they would call me back after her supervisor made sure I qualified. I am not sure what I was qualifying for since they were just selling me software” (“Hertel Warns of Possible Foreclosure Scams,” The Michigan Messenger, Aug. 3, 2011).
The company’s website states that Hope for Hamp isn’t a loan modification company and doesn’t provide loan modification services, only software for consumers to initiate their own mortgage modification requests. The company has also attracted the attention of the campaign team for President Barak Obama for using the campaign logo as well and video and other imagery that implies the program is connected to the Obama administration.
Advance Fees for Mortgage Debt Relief Litigation Skirt Laws Regulating Lawyers
Hertel said that Mortgage Relief Center, the second debt relief company he was warning consumers about, was soliciting Michigan residents to become participants in class action lawsuits against banks and home foreclosure mills. Hertel said that when he called Mortgage Relief Center the company offered legal representation for his debt relief case. The company then offered to allow Hertel to participate in a class action lawsuit that it was filing in exchange for an advance fee that averaged $5,000. Hertel was told that he couldn’t talk to the attorney handling the case until he paid the advance fee and that it would likely be an associate, and not one of the attorneys referenced in the company’s marketing materials, that would handle his case.
However, Mortgage Relief Center’s website states that the company is a “marketing service” and not a legal referral service, law firm, or a provider of legal services.
Hertel said he has referred both of the companies to the attorneys general of Michigan and Florida for investigation.
“[Hope for Hamp] is a modification scam. Most of these have been shut down and are illegal under Michigan and Florida Law,” Hertel said. “[Mortgage Relief Center] is trying to get around the law banning lawyers from soliciting clients. No real lawyer would take a case without at least examining it. They wanted you to pay $5,000 before you even talked to a lawyer. They were very aggressive on the phone. [One resident] was called directly by this group three times a day for weeks. Real lawyers don’t do that.”
“These companies are using loopholes in the law to rip off citizens of their last dollars in a very difficult time for them,” Hertel added. “This is a clear example of why foreclosure by advertisement is a bad thing. At a time we should be offering homeowners help we are instead offering to provide them access to scammers.”
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