There are many firms out there that are taking people’s money and not providing services.  This does not include everyone though.  The most recent one that has hailed much coverage is The US Justice Foundation.  Here are some immediate red flags that come up for me as I am looking at this company:
 
1.)  They used a name like US Justice Foundation.  The only companies that should use names like this are those that are actually backed by the government.  This is a good sign of someone who is attempting to use the name as manipulation of the situation.  The services and expertise should speak for themselves in these matters.
 
2.)  There is not a set fee.  From my understanding this firm was not only taking their $2500 retainer but they were syphening money from people thereafter.  A company should have one fee and that fee should be for loan modification services.  No nickel and diming and no “it is more if it takes longer”.  We charge one fee of $2900 and we go after multiple approaches with the bank. If these approaches do not work out, we can also assist the person in their leaving of the property.  No matter how many times we have to go back to the bank, the fee remains the same.  One mortgage, two mortgages, the fee remains the same.
 
3.)  There is a 100% money back guarantee on the service.  I see a problem with this for two reasons.  One would be that there is a service that is being provided.  To properly do all of the things that are involved to get the homeowner the best modification possible it takes a good chunk of money for the company.  The other reason, I would say, is that if they are offering a money back guarantee they do not know what they are doing, are not putting in the necessary effort, or do not plan on giving the money back.
 
4.)  They are making a big legal production out of the modification process as opposed to taking the necessary steps to just get a modification done.  A lot of companies do not really know what they are doing.  They do not know how to  play the game that the bank plays.   A lot of them just jumped on the loan mod band wagon to make money without doing the necessary research to do it efficiently.
 
5.)  There is not a specified end result.  Many companies say that there is a money back guarantee or that they will modify your loan.  However, very few companies ensure that what they are doing in your modification is the best end result and that is really works for you.  Your full financial picture should be taken into consideration, i.e. what kind of hardship that you have, and what kind of debt that you have.  Then a bottom line number should be picked that will have to met in order for services to be completed.  Then you would be shown how that number will also make sense to the bank.  It can be a timely process but is the only way to keep people honest.
 
6.)  Company has no financial backing.  To be honest with you, maybe Jack Ferm was not intentionally stealing the money.  Yes, he lied about being an attorney, but did have attorneys on staff.  The issue was more than likely that they did not know what they were doing, did not have the funds to cover the companies overhead, and used the client’s funds instead.  This is how many companies are operating.  They know that they have 60-180 days to work on the file (it should only take 30-60) so they know that by the time they might have to give the money back, they can pay it with the next client’s fee.  We do not pay the bills on unearned funds.  To do this thing right there needs to be substantial money in the beginning to actually build the foundation it takes to run this business.
 
7.)  If they send information to you that you did not request, then run.  If it mentions something about the benefit of the new US Home Affordable plan, run.

This entry was posted on Thursday, March 12th, 2009 at 11:27 am and is filed under Education. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.