Regretfully, the story of American Mortgage Modification Association (AMMA) is one too familiar to
Better Business Bureau and many consumers seeking mortgage assistance to avoid foreclosure. American Mortgage has an F rating with BBB serving the DC area.
According to the DC BBB, AMMA’s
Pennsylvania Avenue, Washington DC address appears to be a “drop box” for payment. The company also uses an Owings Mills address which is a legitimate business center, but the suite numbers listed by AMMA are all actually occupied by other businesses including a government defense contractor, healthcare management firm and a day care! Since April, 2009, BBB has received 37 consumer disputes against AMMA primarily around failure of the company to provide the services as expected by the consumer or consumers seeking refunds.
Homeowners across the country report receipt of direct mail marketing mortgage modification services. The letters are a common ad strategy – “final entitlement”, modification case number, referencing federal legislation – leading consumers to believe this is an “official” letter, leading them to believe they are entitled to the service. Homeowners report to BBB providing an initial fee ranging up to $2,000 in exchange for the company’s team of legal practitioners to contact the mortgage lender and negotiate a modification of the loan. Consumers expect the company and others like it, to reduce the monthly payments enabling them to hold on to their home and avoid foreclosure (often called loss mitigation).
In reviewing the BBB consumer disputes, here is a sampling of the most common allegations:
· Consumers claim to speak to multiple company representatives, rarely getting complete names of those they are speaking with or rarely speaking with the same person when making follow up calls, thus causing confusion.
· Consumers report multiple attempts to complete required paperwork exchange, to get phone calls completed or returned (one consumer reports 71 calls made to the company before a return call was made), and communication break down once the initial fees are paid.
· Consumers report unauthorized charges for fees after they have attempted to cancel the service (based on the experiences described above) and these unexpected charges have lead to gross overdraft fees (example – one consumer reported the bank reversed the charges to AMMA twice, but the consumer was still responsible for the bank and retailer overdraft fees of $300!).
· Consumers report consistently they have no proof their lender was ever notified of request for modification of loan.
And here’s the real heart break.
A consumer submitted a BBB dispute in August of this year stating the family had hired AMMA to negotiate mortgage modification. The home was in active foreclosure with a sell date in early September. The consumer reported the company would not return calls or emails and the home owner had not received any update on the status of loss mitigation service. The home owner had discontinued communications with the lender, was out $2,000 and weeks away from foreclosure. Bottom line of this business model, homeowners are paying a lot for little or nothing in return and the risks of foreclosure are increased (if not imminent) due to delays and loss of valuable time working with a non-performing company.
WARNING Signs of Mortgage Loan Modification Scams:
- Demands advance fee – ILLEGAL!
- Suggests you break off contact with your lender, stop making mortgage payments, or divert mortgage payments to a third party
- Advertising practices that are aggressive, imply government affiliation, and create urgency to “act now”
- Does not provide full disclosure of your rights and assignment of a case manager
If you are seeking assistance to prevent foreclosure, here are the legal protections for Marylander consumers:
- They may not charge any fees before fully and completely performing all services on behalf of consumers
- Any company offering such services must be licensed by Dept. of Labor, Licensing and Regulation, Commissioner of Financial Regulation
- Must enter into a written contract with full detail of services to be performed and the results to be achieved.
- Provide notification of your rights under the federal Fair Credit Reporting Act and
- Maryland Homeowners’ Rights when working with a “Foreclosure consultant” clearly state the consumer has the right to rescind a foreclosure consulting contract at any time – an unlimited right of rescission (Protection of Homeowners in Foreclosure Act)
If you believe your foreclosure modification program has violated your rights, file a complaint at http://www.bbb.org/ and call the Commissioner’s office at 888-784-0136. For assistance, contact www.makinghomeaffordable.gov and/or Maryland’s Hope Initiative www.mdhope.org (877-462-7555).
Talk soon - Angie
