Commentary: Sleazy lenders turned loan modifiers cheat customers twice

A realtor poses for a picture in his office
A realtor poses for a picture in his office (Kevin R. Wexler / The Record / MCT)

This is not a joke but it should be. Some of the same predatory lenders who got rich snookering homeowners into getting loans they couldn't afford have set up shop as loan modifiers to, in essence, clean up the mess they helped create.

Hahaha. Say what?

Worse, regulatory oversight has been so lax that these bad players are able to snooker the same homeowners again under the guise of helping them avoid foreclosure. Homeowners are losing hundreds of dollars in fees to these scam artists — and losing their homes as well.

That's what happened to Charlotte residents Joshua and Jaimee Garland, who paid the Federal Loan Modification Law Center $995 to negotiate lower monthly mortgage payments. Joshua had lost his job as a chef and was bartending. Jaimee had been laid off from her hospital job. Their monthly income plummeted from $3,200 to less than $1,000. They could no longer afford the $1,200 monthly mortgage. Along comes FedMod with a pledge to cut their payments to $532 when the couple paid a $995 retainer fee. Joshua Garland said they were told to stop paying the mortgage because “once you're under our plan, the bank can't foreclose on you.”

To read the complete editorial, visit charlotteobserver.com.