Slatington resident Thomas Nicholson claims that he and thousands of other homeowners have been lied to, given ridiculously bad advice to quit paying on their mortgage and then stolen from by companies purporting to offer to help them negotiate new terms for their mortgages.
Nicholson said that he and his wife moved to Slatington from Staten Island. Soon they realized that they weren't going to be able to make the payments on their home.
He was hoping to get help from his bank's Home Affordable Modification Program or HAMP or as Nicholson phrased it, "help from Obama."
Instead, Nicholson got a call from a company that offered to mediate the mortgage so that he could keep the home.
"We have had over 450 foreclosures in Northampton and Lehigh Counties," said Annette Santiago, the director of mortgage mitigation services for the Community Action Committee of the Lehigh Valley (CACLV) based in Bethlehem.
Santiago, who is working on the Nicholson case, said that she gets the lenders and the borrowers "to sit down at the table and work out a payment schedule" that keeps the homeowner in their house and gets restructured payments to the lender.
When Nicholson turned to his bank, Indy Mac, for help, he said that he got no response but instead in May 2009 he got a call from "Choice Loan Consulting, LLC" based in Arizona claiming that Indy Mac had referred his case to them.
To Nicholson the call seemed the answer to a prayer. Here was a company that said they could help. All Nicholson had to do was fill a lot of forms verifying family income and pay a hefty $1,995.00 fee by electronic bank transfer.
"That's when the fun began," said Nicholson.
He sent the money and filled out the forms. He had no idea that legitimate non-profits including one here in the Lehigh Valley do the same exact service free.
Then, according to Nicholson, he was told that nothing could be done until he was in actual default. "They told me that I should stop paying my mortgage and go into default," he said.The company also, according to Nicholson, advised him to have no further contact with his bank. He stopped paying on his mortgage.
According to Nicholson, who is a medically retired Riker's Island corrections officer, he bought the $239,000 house in Slatington through a mortgage broker in Staten Island who has since gone out of business.
Then after months of getting a run around by Choice Loan Consulting who had promised action within 60 to 90 days, they informed Nicholson that his application had been denied because he had never "reaffirmed his mortgage" with his bank and that therefore the company could not do a "mortgage modification."
Even so, representatives of the company assured him that the case "was still being reviewed" and for him to "call back in two weeks" all the while reassuring him that "it looks good."
The company now assured him his application "was not denied" and that they were still reviewing the case. But, said Nicholson, the company told him that he should "start getting together as much cash as possible and to call back when you have a large sum of money."
By August, months behind in his mortgage payment, and fed up with promises and repeated requests that he resubmit all of his financial information, Nicholson demanded his money back.
"The company is bankrupt," Nicholson remembered being told in December by Choice Loan Consulting's Jeremy Slate. "You're beat out of your money."
However, Choice Loan Consulting having first told Nicholson to not contact Indy Mac, now suggested that Nicholson contact the bank and try to make some arrangement with them.
When he did contact Indy Mac, Nicholson said that the bank told him to contact Premier Legal Services in California for help. Premier Legal Services asked Nicholson to pay them $2,568 in four payments of $642.00. They wanted to start the process from the beginning.
In February, 2010 a Lehigh County Sheriff's officer came to the door and delivered a notice of foreclosure. That's when Nicholson first heard about the free mortgage modification program offered by the Community Action Committee of the Lehigh Valley.
Nicholson is "determined to keep the house-it's part of keeping my family together." He said he hopes things "get back to normal."
Choice Loan Consulting declared bankruptcy in January 2010 according to news reports from "3 On Your Side," a television consumer watch program in Phoenix, AZ.
Choice Loan Consulting owner Jordan Ruzicka in an interview with that program said that, "They had every intention helping people but were overwhelmed."
According to documents the news show producers obtained Choice Loan Consulting told a Gilbert, AZ couple that they could reduce their mortgage payments by 10 percent in return for a $3,500.00 fee and offered a 100 percent refund guarantee if they did not deliver.
While the company may have gone out of business, the TIMES NEWS had found that several other similar companies with the word "Choice" in their company name have or are working out of the same address on North Gilbert Road in Gilbert, AZ.
Choice Loan Solutions, Inc., Choice National Credit Repair and Choice Loan Consulting (which also lists Jordan Ruzicka as an officer) have all operated out of the same location. In nearby Scottsdale, a company called Choice Mitigation Services is in operation.
"We've seen some ugly things crawl from under rocks," said Alan Jennings, the Executive Director of the CACLV. He said these bogus companies charge thousands of dollars in fees, accomplish nothing and offer a service that CACLV does for free. "They [the victims] pay up front and get no service."
Gilbert Road in Gilbert, AZ is also the home of several other financial or mortgage companies but there is no other known connection to the "Choice" companies.
Another homeowner (who doesn't want his name revealed) of Hellertown told the paper that he had had a similar experience after he paid a cash fee of $2,770 to "The Law Office of Brian J. Colombana" out of Irvine, CA who failed to mitigate his mortgage as well give bad legal advice.
A Google search of that company reveals that it, too, has connection to several companies: Mortgage Relief Law Center, Home Relief Services, LCC, Housing Law Center and Liberty Law Firm. Brian J. Colombana's name can be found on several consumer complaint websites.
"They told me not to pay anymore on my mortgage," the Hellertown homeowner told the Press. "When they got wind of foreclosure they would take action."
The homeowner stopped paying his mortgage in May of 2009; foreclosure action started in Dec. of 2009. He was also served papers by the Sheriff's office.
Home owners who need help with mediating or modifying home mortgages can get the service for free by contacting the Community Action Committee of the Lehigh Valley at 1337 East Fifth Street, Bethlehem, PA 18015 or calling the non-profit corporation at (610) 691-5620.