Many so-called loan modification companies have been in the news recently for charging up-front fees but never providing real services to customers. Two more Florida companies are now in the spotlight under similar accusations.
Hope Financial Services and Global Equity Solutions are under investigation by the Florida Office of Financial Regulation as well as the Clay County Sheriff’s Office. Both companies are accused of taking up-front fees for loan modification services they never provided. An OFR officer said that “they’re operating illegally” after executing search warrants against the two companies. The OFR has issued cease and desist orders to both companies while the investigation is ongoing.
According to investigators, Hope Financial Services does not have a license to complete mortgage agreements. They have collected fees from customers, but they are not even licensed to do the work they say they will provide.
Similarly, the president of Hope Financial Services is not a licensed mortgage officer. However, he says that he does employ a person who is licensed to work with mortgages.
The tough economy has caused many homeowners to become under water on their mortgages. In an attempt to avoid foreclosure, many consider loan modifications. The important thing to remember is that loan modifications can be a useful tool when they are conducted by an experienced attorney. Done correctly, a loan modification can make it more affordable for a family to keep their home.
However, companies that charge an up-front fee are often scams that fail to provide any real help to these homeowners who are already struggling financially. It is also illegal in Florida to charge a fee before providing loan modification services.
Source: First Coast News, “Clay County Companies Accussed of Illegal Mortgage Modifications,” Ken Amaro, 3 Sept 2010