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July 30, 2009
By BETH SHAYNE / NewsChannel
36
TAYLORSVILLE, N.C. -- When NewsChannel 36 first
aired a story on the North Carolina Attorney
General's investigation of two loan
modification companies, Richard Green had just
written his checks to one of them.
Green says 21st Century Legal Services
contacted him, and offered a 30-year fixed rate
loan at 4 percent.
"My payment is $665, they said it would be
$305, and I thought, 'Yeah, that's what I need
right now," Green told NewsChannel 36.
His wife has had several back surgeries and is
out of work. The Greens were one month behind
on their mortgage when they got the call.
Green wrote four checks for nearly $500 each.
According to paperwork he showed NewsChannel
36, that money was for a $750 processing fee
and four payments of the $306.66 for July
through September. That is the same amount he
was told could be his modified mortgage. He
says he was told to stop paying his mortgage
while 21st Century Legal Services worked its
magic.
Two months worth of checks had been cashed when
Green saw a story on NewsChannel 36, reporting
that 21st Century Legal Services and People's
First Financial, both of California, were
temporarily barred from doing business in North
Carolina while the AG investigated business
practices it called unfair.
"I knew I was screwed," he said.
He called us, then the Attorney General's
Office. They told him to cancel his remaining
checks. Then, he called his lender and worked
out a payment plan to remedy the situation. (He
was now four months behind on his
mortgage.)
He says his lender told him they never heard
from 21st Century Legal Services. He says he
left at least 10 messages that went
unreturned.
The investigations are part of what the AG's
office calls "Operation Loan Lies," a
nationwide crackdown on loan modification and
foreclosure relief companies that local and
state officials call "scams." The office has
now obtained a preliminary injunction against
21st Century Legal Services. A temporary
restraining order is still in effect for
People's First Financial.
In both North Carolina suits, the AG alleges
that the companies took money upfront and
claimed that they could cut consumers' monthly
mortgage payments and save their homes from
foreclosure. Under North Carolina law, it's
illegal to charge an upfront fee for
foreclosure assistance.
Messages left for People's First Financial have
never been returned.
When NewsChannel 36 first contacted 21st
Century Legal Services at their home office in
Rancho Cucamonga, Calif., operations manager
Lisa Easiel said that the state of North
Carolina is only after their company because
they are based in California.
"North Carolina is just interested in getting
their tax dollars. That's all they want from
us," Easiel said.
As for the allegation that the company was
charged an upfront fee, she admits they were,
but says it is legal in their case. "A law
office is allowed to charge an upfront fee,"
Easiel said.
When we called about Green's case, we were
referred to a lawyer, Mike Nehmeh, who told us
the company has been purchased by Transitional
Company of America.
Nehmeh denied that anyone with the company told
Green -- or any other customer -- not to pay
his mortgage. He told us these things take
time, and called the people who've complained
"crybabies."
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