By Jason Cruz
Northwest Asian Weekly
Yao Fou Hinh Chao is a trusting man. But after two loan mortgage modification scams bilked him out of more than $4,500, putting him at risk of losing his Skyway home to foreclosure, the 60-year-old Chao did not know whom to trust.
Enter the Northwest Justice Project, a legal aid organization that offers foreclosure prevention assistance, which has stepped up to help Mr. Chao save his home of 17 years.
Having a hard time making ends meet to pay his mortgage, and unable to modify his loan with the bank, Chao thought he found the solution when an advertisement in his mailbox gave him some hope. The unsolicited ad, from a law firm in Boca Raton, Fla., offered to represent him in obtaining a loan modification on his current mortgage. Chao placed his trust in the solicitation and was told that if he paid a monthly fee, they would obtain the modification.
“It was convenient,” recalled Chao of his initial impressions working with the Florida firm. “It was as good as a regular bank. I fully trusted them.”
The law firm took monthly payments out of Chao’s bank account, during which he stopped payments to his mortgage lender, Wells Fargo. Chao said he received a “million letters” from Wells Fargo seeking payment, but he was instructed by the Florida firm to “just pay them [the Florida firm]” instead. Chao believed the firm would handle his loan modification.
After six months of paying a monthly fee of $700, Chao discovered the law firm had done nothing. Realizing he had trusted the wrong people, he sought help from another solicitation he received in his work email. This time, a law firm based out of New York requested Chao pay $1,250 per month.
At this point, a friend referred him to go to a meeting conducted by the Northwest Justice Project (NJP).
“It must be my good luck,” said Chao of his chance opportunity to attend the outreach event. “I found out that so many people have the same problems.”
According to Catherine West, an attorney with NJP, the Washington State Department of Financial Institutions reports that since 2009 it has received about 1,200 complaints about loan modifications involving scams and/or legitimate issues with service providers.
With the help of NJP, Chao was able to stop the fraudulent law firms from taking money out of his bank account and to recoup a portion of the money he paid the New York firm, but the damage had been done, and Wells Fargo was threatening foreclosure. In the meantime, NJP filed a lawsuit against the Florida law firm for fraud, negligence, negligent misrepresentation, breach of contract and other claims related to Chao’s case.
“I feel like I have someone helping me,” said Chao, who works for Washington State University in King County teaching organic farming. “I can sleep better.”
Northwest Justice Project helped Chao work with Wells Fargo to save his home from foreclosure and get back on track with his payments.
West offers advice for avoiding loan modification scams.
“Homeowners should be extra careful if someone offers to help, but requires payment of an upfront fee, or requests Social Security or bank account information, is located out of state, tells the homeowner to pay their organization rather than the mortgage company, or makes promises that are ‘too good to be true’ – it’s likely a scam!”
West said there are ways to avoid foreclosure without seeking help from unsolicited companies.
“Homeowners’ options to avoid foreclosure include seeking a modification of their loan, working with a housing counselor or attorney to be referred to foreclosure mediation, and working with a bankruptcy attorney,” said West.
West advises homeowners who are in need of loan modifications and/or at risk of foreclosure to immediately contact the Washington State Homeownership Resource Center at 1.877.894.4663 to talk to a free housing counselor, or the Northwest Justice Project’s Foreclosure Prevention Unit at 1.800.606.4819. (end)
The Northwest Justice Project Foreclosure Unit is conducting an informational event on Monday, Nov. 18, from 6 – 7:30 p.m. at the Chinese Information Service Center in Seattle’s International District (611 S. Lane St.). Attorneys and counselors will be available to answer more questions.
For more information on the Northwest Justice Project, call 206.464.1519 or 1.888.201.1012, or visit the website at nwjustice.org.
Jason Cruz can be reached at email@example.com.