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Firms Charge Thousands To Modify Mortgages
Clayton Sampson, founder of U.S. Housing Assist of Nevada, which launched in July, said nonprofits provide a great service, but added, "We have a lot of clients that need us."
Sampson said he spent five years at a mortgage brokerage and his contacts have enabled him to customize workout plans for a homeowner's lender. His firm charges a minimum of $2,500, but he said he would return the money if he was unable to help the homeowner.
The pitch companies make varies. But one approach includes paying a company to challenge the legality of a loan -- a process housing experts say can be long and complicated.
Vienna-based Mortgage Analysis and Consulting, for example, charges $150 for a consultation and $250 to $500 for a preliminary audit. If the audit finds problems with the loan document, Mortgage Analysis will refer the borrower to a lawyer, who may charge an additional $2,000 retainer. If the lawyer requests a more in-depth audit, Mortgage Analysis charges up to $1,750, which clients can pay in installments.
In several cases, the introduction of a lawyer has helped spur the lender to agree to a better loan modification, said Jose Semidey, the firm's founder.
Semidey, a former real estate broker, said he planned to open a nonprofit firm earlier this year to help homeowners. But, he said, he quickly found himself inundated with distressed homeowners willing to pay for his service.
"I am not in this for the money or to get rich. I see it as a mission and a duty," he said. "And yes, we are a for-profit company, but that only makes [us] do a better job."
Virginia's State Bar is investigating a complaint that Semidey has illegally practiced law. Semidey said he makes clear he is not a lawyer and refers clients to a list of lawyers he has compiled.
One of Semidey's former clients, Edwin Monge, said he became concerned that he would no longer be able to afford the payments on his Woodbridge townhouse after the adjustable interest rate rose and the payments increased. The home's value had tumbled, making it impossible for him to refinance. Monge said he met Semidey through a friend and eventually paid him $7,000, some of which was to be used to pay a lawyer.
"I was blind," Monge said. "I wasted my money, and they lied to me and they didn't tell about the community groups."
Some of the money eventually was returned. And in the end, with the help of a nonprofit legal group, Monge was able to get into a new loan -- at no cost -- through a Federal Housing Administration program.
Semidey said the process did not work out because Monge could not find a local lawyer to represent him and a large portion of the money was spent on an outside auditor. "He came to our office 10 or 15 times," he said. "We translated for him. We sat with him. . . . You cannot make everyone happy."
He said, "We did not profit from the interaction."