Jul 16, 2009 11:42 am US/Eastern
I-Team: Loan Modification
Reporting
Jim Osman
TRENTON (CBS 3) ―
At a time when so many people are struggling with finances and home foreclosures, the New Jersey Attorney General is cracking down on mortgage fraud. On Wednesday, state officials announced lawsuits against two mortgage companies, "New Day" from Newark and "Birmco" of Haddon Township.
What happened in New Jersey is part of almost 200 legal actions taken today against alleged fraudulent loan modifiers in 19 states. How does it work?
September 2008, the economy begins to crash. The market tumbles and jobs disappear.
"The wife and I came into financial problems, her being laid off, me being laid off and we got behind on our mortgage," Dennis Allam said.
For Detroit's Dennis Allam and his wife, their hard times started two months later. Dennis and his wife were in danger of defaulting on their mortgage. They turned to a loan modification company based at this Cherry Hill complex called New Hope.
"We were referred to New Hope Modification by our bank, our mortgage company," said Allam.
New Hope allegedly told Allam to send it one month's mortgage up front, $1,750, instead of sending their mortgage payment to the bank. In turn, Allam says New Hope promised to negotiate with the bank for a loan modification, for Dennis and his wife.
The New Jersey Attorney General says the company never did, in the Allam's case and dozens of others, leaving homeowners facing default.
"Promises are made, consumers did not receive assistance in most of the cases," said New Jersey Attorney General Anne Milgram.
Attorney General Anne Milgram says two separate New Jersey based companies called New Hope and Hope Now named in a civil action brought by her office, tried to confuse consumers by playing off a legitimate federal loan modification program.
That legitimate program is called The Hope Now Alliance.
"That's an excellent program. It's run by the federal government and it provides free federal counselors to individuals who want to modify their loans," said Milgram.
As of Wednesday's latest action, Milgram has now brought civil suits against four different loan modification companies in New Jersey. Including the previously mentioned company, New Hope. Brian Mammocio is listed in court records as a company agent.
"You're being accused of ripping off a lot of people sir," said I-Team reporter Jim Osman.
"I know," said Mammocio.
"It's not true?" asked Osman.
"No, it's not," replied Mammocio.
The CBS 3 I-Team caught up to Mammocio outside what public records say is his Mullica Hill, New Jersey home.
"We'll prove ourselves in court," said Mammocio.
"Why would they make that up?" asked Osman.
"We'll find out though," replied Mammocio.
But Dennis Allam says the court will find out exactly how the loan modification company, New Hope, left him in financial ruins.
"They wreck our credit, they wreck our future, they wreck our lives. I'd like to see them all go down, I'd like to see them all taken on," said Allam.
The company, Hope Now, did not return our phone calls for comment. Neither did the two companies sued just today in a lawsuit announced by New Jersey's Attorney General Anne Milgram.
Milgram says consumers can avoid these loan scams by checking to see if the company is registered with the state, which is a requirement. She also says beware of companies which demand you pay thousands of dollars upfront before you ever receive any services.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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