Action 9: Homeowner Becomes Victim Of Loan Modification Scam

None — Authorities are warning of a growing scam targeting distressed homeowners who are trying to get loan modifications.

Terrie Geiler said she went looking for help online because she was faced with a $140,000 mortgage she could no longer afford. She found a California law firm making big promises.

"It was a 100 percent guarantee that I would have a loan modification and it would be within three to six months," Geiler said.

But Geiler said 1st American Law Center did nothing but take $3,000 in upfront fees before being raided by the FBI for running a loan modification advance fee scam. It was then shut down.

Geiler then talked to directly to her lender, M&T Bank. It eventually approved her for a loan modification after she said she followed its advice to qualify and allowed her mortgage to fall three months back.

For anyone to qualify under the federal home loan program, they're required to be at least three months behind..

But 10 months later, the deal fell through when the lender that held Geiler's second mortgage refused to agree to the new terms.

M&T Bank demanded she pay $4,000 to catch up her loan or it would foreclose.

It was money Geiler didn't have.

"I was doing what I was told to do, and now I'm in danger of losing my home," she said.

After Action 9 got in touch with M&T Bank, it told Geiler it would put her modification through and roll the $4,000 into her new loan.

She now has a warning about law firms promising to help with loan modifications.

"A hundred percent guarantee, nothing," she said. "Do not believe it."

Geiler and the Better Business Bureau warn to do your research.

WSOC