This is not the time for finger pointing, Steve.
April 1, 2009 4:10 PM   Subscribe

I'm in a bit of a bind. Through a set of rather bad situations, I'm soon going to be behind on my home loan, and there's not much that I can do about it with my current lender. I got an intriguing mailer yesterday, and spoke with the operator that answered the phone. They're trying to sell me on loan restructuring, not refinancing.

My lender raised my rate to 8% 2 months ago. Add to that the fact that we haven't been able to afford our raised property taxes (now at 24.00 per 1000 in our area...up from 15 when we moved here originally), and the county decided to contact our lender to get it added to the loan by force, and we're going to see an increase in our monthly payment by nearly 50% starting next month. That's more than one of my paychecks.

Our lender is actually bankrupt, and our loan is being held by a company called "Loan Services". They maintain that they're managing the loan at the terms specified by the original contract, and that there's nothing they can do to change it. They won't offer me a refinance. Because of our wilting financials, my credit rating has dropped precipitously, and trying to work through a mortgage broker to find another lender has been fruitless. After a month's work, he threw up his hands and said we'd be better off just trying to weather the storm.

I have 4 kids to feed. I can't weather the storm.

This outfit mailed me yesterday with an offer to restructure the loan. What they offered to do was act as my attorney, and nail the lender to the wall with "predatory lending law violations" as a negotiating tool. With that kind of ammunition in hand, they could negotiate a lower rate on my existing loan for me. The only catch is their fee: About 3 grand.

Suspicious guy that I am, I figured they couldn't be the only one doing this, and there was something in the back of my mind that said that, with enough elbow grease, I may be able to do something about this myself.

Is this just a scam, or is this a legit opportunity to get some relief -- and if it's legit, is it something I could either do myself, or get done for me at a much lower price tag? I personally can't afford the fee that they're asking, particularly if it means they're only going to lower my payment a few hundred dollars a month.
posted by thanotopsis to Law & Government (9 answers total) 3 users marked this as a favorite
This is not an offer to restructure your loan. This is an advertisement for legal services.

There's a difference.

If you want a more detailed analysis, MeFi mail me with specifics.
posted by valkyryn at 4:12 PM on April 1, 2009

Can you tell us the name of the company that is making you the offer? That would help us find out their history and if they are potentially scammers.
posted by procrastination at 5:17 PM on April 1, 2009

This has been in the news recently.

Valkyryn is right -- this is for legal services, not loan restructuring. Perhaps they are trying to pursue a class action suit, like the recent People of California v. Countrywide?

If money is tight, it seems like a lot of money to spend on a gamble but that's just my opinion.
posted by Houstonian at 5:52 PM on April 1, 2009

(Please remember that a good lawyer will never, ever guarantee results. Take that into consideration when weighing the cost versus the risk.)
posted by Houstonian at 5:55 PM on April 1, 2009

A friend of a friend was out thousands of dollars to a company who claimed they'd reduce her home loan payments. The friend never saw any results, eventually wised up that it was a scam, and managed to get only a portion of the money back.

Loan restructure and fake refinance scams epidemic nationwide
posted by jepler at 6:12 PM on April 1, 2009

On the surface this sounds like a scam.

There are many non-profits and government organizations that are currently trying to help people restructure their loans and avoid foreclosure. You should look for one or more of these in your area, and talk to them about your situation. If you can't find one, contact your congressperson's office.

If you could afford the payments on your loan at a reasonable interest rate (rather than 8%), someone should be able to help you get that refinance.

The people who are really helping homeowners are much too busy to be making outgoing sales calls. The fact that this guy contacted you and is asking you for $3,000 just sends up a huge red flag.

Tell me, if you wanted work done on your car, would you hire some random person who was desperate enough to send you a letter or cold-call you on the phone? Or would you talk to friends and look around for the best car repair person? That's what you should be doing here. There's help out there, and programs out there. You need to find them.
posted by alms at 6:19 PM on April 1, 2009

If you have an FHA loan, you may be able to "streamline" it. I don't know exactly how it works, but I recently did it. There is NO credit check or home appraisal, there are the normal closing fees, but you should be able to get a very low intrest rate. It's worth looking into if you already have an FHA loan.
posted by kochanie at 6:25 PM on April 1, 2009

As others have noted, there are a lot of mortgage-related scams going on right now. The Federal Trade Commission just launched a website that covers some of these topics, take a look here. The site notes some suspicious behavior to be wary of and also lists what you can do next. The first option, talking directly to your lender, is something that doesn't seem to be an option for you.

The next step, contacting a credit counselor through the Homeownership Preservation Foundation (HPF), might be a better option. From the FTC website, "HPF is a nonprofit organization that operates a national 24/7 toll-free hotline (1.888.995.HOPE) with free, bilingual, personalized assistance to help homeowners avoid foreclosure. HPF is a member of the HOPE NOW Alliance of mortgage servicers, mortgage market participants and counselors. More information about HOPE NOW is at

There are people that can help you. Be very wary of those that are going to charge you fees for this, especially if they want the money upfront. I wish you all the best.
posted by buddha9090 at 7:02 PM on April 1, 2009 [3 favorites]

From today's Boston Globe:
On Thursday, the president encouraged people to take advantage of a government Web site -- -- to see how they can get help.

Obama also warned people to watch out for scam artists.
posted by alms at 11:16 AM on April 9, 2009

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