Paying a fee for Mortgage help? DOH! Even Homer Simpson won't ... well

For several years, every agency known to man from the Federal Government to the State Government to the major Lenders to your National, State and Local Associations of Realtors have been advising you that you need not pay a fee for assistance. There is more help out there that Carter's has pills, but the help you want to seek is not asking for a deposit, downpayment, retainer or anything at all. The the FTC further protected us with the Mortgage Assistance Relief Services Rule. none of this has stoppedcompanies form targeting people in dire times looking for a way to keep the boat afloat. Read today's story from the L. A. Times: Homeowners, beware of firms charging a fee for mortgage help

Plenty of companies are eager to exploit the uncertain economy and housing market by trying to separate property owners from their money. But services seeking high fees for foreclosure assistance seldom prove beneficial, housing experts say.

Joyce Thompson and her husband, Paul English, were understandably shocked to receive an official-looking letter with the words "foreclosure sale pending" on the envelope. The letter included the address of their Long Beach condo and an auction date. "At this point," it warned, "your home will be sold and you will be evicted from your property."

But all was not lost. The letter turned out to be from a company called Expert Legal Helpers, which declared that "we will have authorization to postpone the sale of your property once we are contacted."

So Thompson, 56, gave them a call. "It sounded like a boiler room — lots of people talking in the background," she said.

A boiler room, for those not in the know (or who haven't seen the movie of the same name), is a call center where salespeople typically pitch a questionable product, usually with high-pressure tactics.

Thompson listened to the salesman's pitch for a few minutes and then hung up. She suspected it was a scam.

"We've only owned the condo for about two months," Thompson said. "It would take a lot of effort at this point for us to be delinquent on our mortgage payments. We'd practically have to beg them to put us in foreclosure."

Needless to say, Thompson and English haven't missed any payments. According to their lender, JPMorgan Chase, there's no problem with their account.

The bogus foreclosure letter Thompson and English received serves as a reminder to all homeowners that there are plenty of companies out there that will try to exploit the uncertain economy and housing market to separate you from your money.

There's been more and more of this sort of thing as homeowners struggle to keep a roof over their heads. Foreclosure filings rose in the third quarter, with 1 in every 213 properties nationwide facing a default notice, auction or bank repossession, according to market researcher RealtyTrac.

"If you ever get something about your property that's not from your lender, contact your lender," said Gary Kishner, a Chase spokesman. "Always make sure before you do anything."

Thompson and English live in Tustin. They bought the condo in a short sale for their daughter, who's attending Cal State Long Beach.

The website for Expert Legal Helpers says the company "will negotiate with your lender to reduce your mortgage payments, reduce principal loan balance and stop your foreclosure!"

"Where other companies are using inexperienced representatives, we have highly qualified attorneys, agents and appraisers," it says. "We have a well-connected network to help you achieve the best possible result for your particular situation."

The first red flag, though, is that when you call the number provided for Expert Legal Helpers, you end up speaking with a company called Expert Home Relief.

"It's the same company," explained Maria Burks, who identified herself as the processing manager for Expert Home Relief and Expert Legal Helpers. "Mainly we are Expert Home Relief."

Expert Home Relief doesn't have its own website. Burks is listed as the registrant for the Expert Legal Helpers site.

But a record check for the Santa Ana address of Expert Legal Helpers turns up yet another name, Affordable Home Relief Center. "That's also our company," Burks acknowledged.

Confusing as these multiple identities might be, she insisted that the service being offered is legitimate.

"We're not the bad guys," Burks said. "Most of the people who receive our letters don't even know that they've been foreclosed on. We're just waking them from a deep sleep."

And if you decide to act on that wake-up call, she said, her company charges about $2,500 to help with document preparation and mediation to stop the foreclosure process dead in its tracks.

"Ninety percent of the time we can stop the sale," Burks said.

How?

"There are many ways that we do it," she answered, declining to go into specifics.

Marisol Arzate, director of outreach and education for the Housing Rights Center, a Los Angeles advocacy group, said this didn't sound right to her.

"It's very unlikely that a bank will negotiate a foreclosure," she said. "You need to give them their money if you want to stop the process."

Burks said her company checks public foreclosure filings and sends out hundreds of letters to potential customers.

I asked about the letter sent to Thompson and English, whom I noted were in good standing with their lender.

Burks ran their address through her computer and maintained that the address of the condo is listed for foreclosure, perhaps as a result of the former owner missing payments.

"We didn't do anything wrong," she said. "You should go after the title companies that aren't updating the records."

Perhaps. But that doesn't excuse other firms that send out frightening letters based on those records, and then seek high fees for a service that housing experts say will seldom prove beneficial.

Moreover, it's good to remember that a recently enacted rule from the Federal Trade Commission forbids companies from charging up-front fees for mortgage assistance. The provision is called the Mortgage Assistance Relief Services Rule.

The FTC's website also has plenty of other info for homeowners who think they may be targeted by scammers for mortgage assistance. The bottom line is that no one can guarantee they can get you off the foreclosure hook.

"We always tell people to be very cautious about agencies that charge a lot and promise a high success rate," said Arzate at the Housing Rights Center. "If you can't give the lender the money that it wants, you're probably going to be foreclosed on."

And you can take that advice to the bank.