Couple brings loan modification fees into question

OCEANSIDE — The nation’s economic woes and accompanying housing crisis may be showing signs of improvement, but homeowners are still urged to use caution, especially before paying upfront consultant fees in last-ditch efforts to avoid foreclosure. Unfortunately, the warnings are too little, too late for Ryan Walker and Kelly Hart.
When the couple bought their Oceanside home in September 2005, they could easily afford the monthly payments, even with 100 percent financing and two mortgages. Walker worked in construction, a strong market at the time, and Hart maintained her part-time job as a massage therapist while raising their two sons. They lived within their means and, unlike many Americans, said they weren’t mired in credit card debt.

Legal matters

Current law precludes brokers from collecting an upfront fee from homeowners who are in default with their mortgage lenders. Anyone not in default should first try to negotiate a loan modification directly with his or her lender. Homeowners who do seek help from a loan modification business are advised to not pay an upfront fee unless the company:

— Has a real estate broker to assist in the process.
— Has you sign an agreement stating when and what services will be performed and how much you must pay.
— Has submitted the agreement to the Department of Real Estate for review and the broker has received permission to use it and collect the advance fee. Visit for a list of approved businesses in California.
— Is working with a licensed attorney and the money is collected as a retainer fee.

Homeowners who tried to negotiate a loan modification prior to March 4 should contact their lenders again as new guidelines were put in place after President Barack Obama’s administration unveiled its home loan bailout plan.
Detailed information is available on the Department of Real Estate and Housing and Urban Development Web sites.

But two years later, when the housing market began to soften, Walker was forced to take a 25 percent cut in pay. The couple then started using credit cards for necessities such as groceries and soon began to struggle. Walker tapped into his pension to avoid falling behind in their bills.
“It started to snowball on us,” Walker said. Hoping to lower their monthly payments by adjusting the terms of their loans, they contacted their two lenders, EMC Mortgage and Countrywide Financial, but never got past the initial screening process. They said they were told there were no programs available to help them because they were not in default — something Walker and Hart were trying their best to avoid.
Their tax preparer suggested they call a woman he knew who at the time was helping homeowners obtain loan modifications at Better Life America in Oceanside.
“She told us we were perfect candidates,” Hart said. “We met all the qualifications for a modification. They said it would be 30 to 45 days.” That guarantee was never made in writing, however.
“Their attorney supposedly had a 99 percent success rate when working with candidates like us,” Walker said. “She sold us a good story.” In October 2008, they paid the $3,495 service fee with a cashier’s check hoping to have some financial relief by the end of the year.
In the nearly seven months since, Walker and Ryan have received about 30 e-mails from Mary Moi, the Better Life modification specialist assigned to their case after they paid the fee, but there has been no change in the status of either of their mortgages.
Most of Moi’s e-mails were updates stating she had made calls to the lenders and either hadn’t received a return call, or was told the documents were in line for or undergoing review.
Frustrated, Hart said she began calling EMC directly and had little trouble getting a response. “We knew what was happening before Better Life,” Walker said. “We were telling them what was happening and we paid them the money to do this for us.”
Hart also said some information she received from Moi contradicted what she was told by EMC. For example, in late January, Moi told the couple EMC denied their request for a loan modification and recommended a short sale. Hart said according to EMC records, no one at the company made such a denial or recommendation.
Hart said in late February, they were told first by EMC and then by Moi that their request for a loan modification had been approved and they should receive the final papers within days.
But on March 4, President Barack Obama’s administration unveiled its home loan bailout plan, and their approval was taken off the table, Walker said.
“That was a game-changer,” Debbie Krznarich, an EMC spokeswoman, said. “Everything is different. The Obama modification plan has created substantial alternatives for homeowners, but they will need to start over.” Krznarich said she couldn’t discuss specific transaction information, but records show Moi has contacted EMC on behalf of Walker and Hart.
The couple filled out the new federally required paperwork. They have also filed a complaint with the Better Business Bureau and are seeking a full refund from Better Life, partly because they said they got better results on their own, but also because they learned the company may not have been legally allowed to charge the upfront fee.
To do so, according to the state Department of Real Estate, or DRE, a real estate broker is required to have clients sign an agreement telling them when and what services will be performed. “The broker cannot have you sign an agreement until it has been submitted to the Department of Real Estate for review and the broker has received permission to use it and collect the advance fee,” the DRE Web site states.
Better Life is not among the more than 600 companies listed on the Web site that have received advance fee agreements. Tom Pool, a DRE spokesman, said one exception to the rule is for attorneys, who can collect an upfront fee if it is a retainer.
Paul Jacobson, an attorney at Better Life, said the $3,495 was not a retainer fee. But he said he doubted whether the company was precluded from collecting the fee and questioned why the DRE would have jurisdiction since it was not a real estate transaction.
Pool said according to the state business and professions code, anyone acting on someone else’s behalf, and doing so for compensation, is required to have a broker’s license.
“A plain reading of the law puts loan modification companies in a place where they will need a real estate broker’s license unless they qualify for an exemption,” Pool said.
State Sen. Ron Calderon has introduced legislation which, if approved in its current form, would preclude anyone from charging upfront fees for loan modifications. Meanwhile, Jacobson said according to the contract Walker and Hart signed, they could terminate the relationship with Better Life and receive $1,000 refund. But Jacobson, who said he would absolutely welcome legislation to regulate the loan modification process, added that the company is still committed to working with Walker and Hart.


Filed Under: NewsRancho Santa Fe NewsThe Coast News


RSSComments (42)

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  1. anonymous says:

    And another thing: why the hell would anybody need to apologize to Moi? I dont get it.

  2. anonymous says:

    craziness, that’s the most retarded shit ive ever read.

  3. Craziness says:

    I have read all of the quotes on this page another thing that strikes me as odd is The supposed couple that had this article written hasnt had said much of anything……. Better Life America isnt your company backed by a Law Firm??? Whoa doesnt look like very good representation on the company or its employees.

  4. Craziness says:

    Its about as retarded as your multiple mini posts
    what?? Do you not have a life? What are you getting a pay check to sit and post comments or are you the company in disguise just trying to get your little kicks in. Grow up and stop trying to start somthing that you are really not prepared to finish. And if you are then bring it other wise shut the hell up.

  5. Real Life says:

    I wouldnt want anything to do with this Company Better Life if I was a client or an employee it sounds like they are all getting screwed!!!!

  6. Are you serious?? says:

    I wouldnt want anything to do with Better Life America if I was the client and the employee it sounds like they are both getting screwed!!!

  7. Kayel says:

    My brother lives in Carlsbad and noticed this article and all the comments. He called me to see if this was the same company that helped me get my modification, and it is. After reading this article 3 times, I still cannot believe it.

    Ryan and Kelly, I faced the same issues with my lender giving me information that was different from the information the negotiator was giving Mary. We ended it by doing a conference call together which ended up being exactly what Ms. Moi advised me of. A lot of times there are customer service representatives that will say anything to get you off the phone and make you believe that you’re doing all the work. If it wasn’t for Ms. Moi’s efforts, I would’ve NEVER been able to save my home from foreclosure. She extended the sale date 4 times, and negotiated some pretty amazing terms for me. I was stressed and my relationship with my family was suffering. I explained my situation to her and she really stood by me. I had 20 months of delinquent payments waived, my mortgage payment is almost $1500.00 less and the lender agreed to all of this with a very small contribution amount. Its hard to read some of these negative comments, as it was just yesterday that she called me from an appointment to confirm that my lender received everything and my next payment will not be due until June 15th. I know the work that this marvelous young lady is capable of and am so grateful for her.

    The fees were pretty high and I had a really hard time accepting the companies upfront fee policy. My file wasn’t assigned to a processor until after my sales representative accepted the payment from me. Not sure how this whole upfront fee thing is the processors fault since she doesn’t determine the companies fees? Boy, I sure am glad that I went through with it. If I didn’t, I don’t know if I could sit here and say that I’d still have a roof over my families heads. This modification process is pretty stressful but it always helps to have someone on your side when your lenders are difficult to work with.

    Good luck to you both.

    Mary, if you’re reading this, I will be calling you tomorrow! Keep your head up and continue to help those in need while staying close to God. As you told me many times during my trials “God is Good”.

  8. anonymous says:

    Mary Moi my thoughts and prayers are with you, remember all the good you have done and continue to do. God is obviously on your side and will always be.
    God bless.

  9. anonymous says:

    I am still waiting for the Company you work for to post an article to counter act this negative one as it is within their best interest, but their silence is enough I guess.

    You have nothing to worry about Mary this only opened new doors for you.

  10. anonymous says:

    Some people handle stress in bad ways and it is obvious this couple has.

    Mary you go girl don’t let this bad article change you.

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