Michigan News
(2009-07-17)
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"Initially we had to pay $795 dollars to start it," Mann-Sandoval says. "And then they wanted another $795 on top of that."
This is the part where, if Mann-Sandoval's life were a movie, you'd be hearing really scary music.
Because a company that asks to be paid upfront is a big warning sign. In fact it's illegal in Michigan for any company that offers mortgage or other credit help to collect payment upfront.
Unfortunately for Shirley Mann-Sandoval, no one told her that.
The person who claimed to be helping her, Rick Landeros, eventually moved to a company called Equify Enterprises, and charged her even more money.
Rick Landeros declined to speak on tape, but he told me he no longer works for Equify, and as far as he knows, it's closed. Landeros told me he's sorry Mann-Sandoval didn't get help. But he says his job was just to put information in a file, and collect payment. He says he didn't know it was illegal to collect payment upfront.
This kind of scheme has ensnared many people in Michigan. And you don't have to be in foreclosure trouble to get caught up in it.
"I had never missed a house payment. Nor was I ever late," says Caleb Sanders, of Grand Rapids.
Sanders was in an adjustable rate mortgage. And as that rate went up, Sanders started having trouble paying his credit cards. That's when he got a call from a company called LifeGuard Financial, with news that they could help.
But Sanders told the man on the phone that he didn't have any money to pay for that help.
"So he said, 'Oh, we can work out a way,'" Sanders says. "He says, 'you can miss two house payments to pay us.'"
The man on the phone, who said his name was Fred Mendez, told Sanders those two payments would get added on the back of loan.
But that never happened. Instead, Sanders started getting foreclosure notices.
LifeGuard Financial did not respond to requests for comment.
"They're crooks, man," Sanders says. "They scammed me out of my money. There ought to really be something done about that."
And that's where Michigan Attorney General Mike Cox comes in. This week, Cox's office announced 18 counts of fraud for foreclosure relief operations. The office also requested information from 17 other companies where there have been complaints of fraud.
But none of those companies were the companies that scammed Caleb Sanders and Shirley Mann-Sandoval.
So the problem clearly isn't solved.
In fact, some are worried that it will get worse.
Karen Tjapkes is with Legal Aid of West Michigan.
Tjapkes says she's seen hundreds of fraud cases. And she says one of the provisions in Michigan's new foreclosure law could help scammers. The provision requires lenders to post in the newspaper the names and addresses of people who could be in foreclosure. And, unlike in the past, that information has to be published weeks before the foreclosure process actually begins.
"We've known for years that the scammers are picking up those lists and contacting those people. And I think this is just going to give those scammers earlier access to folks."
One legislator who was involved in writing the new law says the goal of the newspaper notice is to reach people who ignore their mail notices and phone calls. He said lawmakers didn't know about the scam risk, but he'd look into fixing it.
In the meantime, the best protection is just for homeowners to be aware of the warning signs. Never pay anyone upfront. Never pay for help at all, if you don't have to. Free help is available from counselors certified by the Michigan State Housing Development Authority and through the U.S. Department of Housing and Urban Development.
Contact Dustin Dwyer at dtdwyer@umich.edu.
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