BROWNSVILLE, Texas – April 30, 2012 – A Brownsville couple is using the court system to fight back after being victims of a loan modification scam that almost left them homeless.
Represented by Texas RioGrande Legal Aid (TRLA), Hannia and Manuel Escobedo have filed a lawsuit against Freedom Companies, Inc. for stealing their money and putting them on the brink of foreclosure. According to the lawsuit, Freedom Companies told the Escobedos that they could reduce their monthly mortgage payments by modifying their home loan for a fee of $1995. Freedom ended up charging the Escobedos over $7500 and told them to stop making mortgage payments to their bank and remit payments directly to Freedom.
“The deal seemed too good to be true,” said TRLA attorney Kayla Dreyer. “My clients trusted a company that took their money and almost cost them their home.”
Eventually, the Escobedos started receiving notices from their bank stating that they were behind on their mortgage. After being told that their home was in foreclosure, the Escobedos borrowed more than $18,000 from family and friends to keep their home. To this day the Escobedos’ mortgage has never been modified by Freedom Companies and the Escobedos are unsure of where their money went.
Freedom Companies has faced allegations of similar behavior before, including in Idaho where the director of the Idaho Department of Finance believes that they target Spanish speaking homeowners.
TRLA recommends that residents looking to refinance their mortgage be aware of the warning signs that they are being scammed. A company should never ask for a large upfront payment to modify a loan and they should never guarantee that they will secure a modification. Homeowners should never stop making payments to their mortgage company in exchange for making those payments to someone else. Homeowners should also avoid signing any documents they have not had the chance to read and fully understand.
“Loan modification scam companies target people in tough situations, exploit them, take the money, and run,” added Dreyer. “The best tool a homeowner has is to not get involved with one of these companies in the first place .”
Individuals who feel they have been victimized by a loan modification scam are encouraged to contact Texas RioGrande Legal Aid at 1-888-988-9996 or the Texas Attorney General’s office.
Established in 1970, Texas RioGrande Legal Aid, Inc. (TRLA) is a nonprofit organization that provides free civil legal services to low-income and disadvantaged clients in a 68-county service area. TRLA’s mission is to promote the dignity, self-sufficiency, safety and stability of low-income Texas residents by providing high-quality civil legal assistance and related educational services. For more information on Texas RioGrande Legal Aid, visit us online at www.trla.org