At-Risk Owners Pay Big Bucks to Mortgage Modifiers

Some take advantage of patchwork laws, charge for services non-profits offer for free
By Kevin Spak,  Newser Staff
Posted Dec 26, 2008 10:44 AM CST
Roberto Peralta and other supporters of Acorn, Association of Community Organizations for Reform Now, protest outside a home under foreclosure in South San Francisco, Nov. 25, 2008.   (AP Photo)
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(Newser) – A growing mortgage-modification industry has cropped up amid the housing bust, the Washington Post reports, charging homeowners thousands to help them negotiate better loans. The problem? Non-profit groups already offer those services gratis. “It is very frustrating to find a homeowner who has paid a for-profit company $3,000 to $5,000,” said one mortgage-servicing director, “when they could have gotten better assistance free.”

The companies say they offer better service than swamped non-profits. “I am not in this for the money,” said one owner. “I see it as a mission and a duty.” But one of his former clients says he spent $7,000 and received little help. “I was blind,” he says. “I wasted my money, and they lied to me.”