Beware offers to rescue home mortgages
By J.W. Elphinstone
Associated Press
Eylonda and Tyrone Wynn of Dallas thought their prayers had been answered when two young women from Resolutions Foreclosure & Home Mortgages knocked on the door in December 2005.
"It was like 'Yes, we can save our house. We can start over again,' " said Eylonda Wynn, a 37-year-old mother of three.
Rising medical bills had put them behind on the mortgage payments for their blue-gray three-bedroom house on a quiet street in Cedar Hill, Texas, a Dallas suburb. Their mortgage lender, Countrywide Financial Corp., was threatening to foreclose.
The Wynns paid Resolutions $950 to negotiate a repayment plan, and in January 2006, Resolutions told the Wynns the lender had agreed. But a month later, after they still hadn't received any paperwork, they found out their house was to be auctioned that day and their file at Resolutions had been closed. They were forced out of the house in March, four years after buying it.
"They were there to help us out of foreclosure, but we lost the first house we bought instead," Wynn said.
A Resolutions official blames the Wynns for not following through on their efforts. But the couple's experience highlights one of the risks for homeowners who find themselves desperately trying to avoid foreclosure: You may simply wind up losing more money.
As the number of foreclosures rise around the country, the number of companies offering help is increasing, too. Many are negotiating terms the homeowner could fairly easily obtain on their own, while others are doing even less and simply exploiting vulnerable homeowners.
Experts recommend that homeowners screen offers carefully and take the following precautions:
PRACTICES GROWING
While no one tracks the number of foreclosure aid providers, real estate professionals and consumer advocates nationwide say questionable practices are rising, especially in areas such as southern California, Las Vegas and southeast Florida, where a housing boom was fed by a sharp increase in mortgages to borrowers with riskier credit.
Finding homeowners in trouble has become easier as Web sites dedicated to listing default and foreclosure information proliferate. So-called foreclosure rescuers then mail, call or visit homeowners.
"These guys are suggesting they have the ability to protect the homeowners when it reality they're not doing anything," said Al Ripley, a consumer advocate and attorney for The NC Justice Center in Raleigh, N.C. "They take advantage of people in desperate circumstances."
Chris Wages, the operations director of Home Management Group in Dallas — the name adopted by Resolutions after it bought a title and brokerage company last year — said the company negotiated a payment plan with Countrywide and told the Wynns to expect a certified packet in the mail from the lender that spells out the terms.
Wages, who only has notes in the file confirming this but nothing in writing from Countrywide, said the case file was considered closed at that point. "We're very direct and up-front with our clients, but these things can turn sour pretty quickly," he said. "More than likely, they didn't pay the lender's attorney's fees and lost their house."
Wynn said she never received the package.
Wages said his company successfully negotiates repayment plans for about 95 percent of its clients, which total between 15 to 20 a month. If the company doesn't hold up its end of the contract, it will give the client a full refund of their fee. Wages said he doesn't have specific documentation for these claims.
The Better Business Bureau of Dallas said five complaints were filed by individuals against Resolutions between October 2005 and July 2006.
