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What can I do to go after a company that scammed me for $4000 to do a home loan modification?

Oceanside, CA |

I paid a company "Direct Mortgage Counseling" upfront to do a modification for me on my current home loan.
I never hear from the guy.
When I do, he simply tells me that "all is going fine". This is 3 months ago.
When I call my mortgage company, they said that that don't work with 3 parties.

Attorney Answers 4


Loan modification companies are not permitted to charge up front fees. It is a violation of Civil Code Section 2944.7, and carries penalties of up to $10,000. Call the San Diego County District Attorney's office and report this company. They should help you get your money back.

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Thank you so much!



I have also been talking to this same company, although they are now called Direct Home Counseling, but when they first cold called me I remember and wrote down Direct Mortgage counseling. I have asked them to give me the names of the attorneys they work with before I hand over any money. The guy (David) is stalling and not answering me. Their FAQ page says they will never take up front fees. Total BS because they will not proceed w giving you a solid deal from your lender until you pay them first. Supposedly bc you might just take the Mod and run without paying them. Hmmm. Bad business model and strategy no matter how you dice it, they win. Beware. I did not pay.


Attorney Boyer gives sound advice.

After the passage of Senate Bill 94 in 2009, the law in California is that it is illegal for any person, including attorneys, real estate brokers, corporations, partnerships, or any licensed or unlicensed person to charge or collect any advance, up-front, or retainer fee, or any type of pre-payment compensation, for loan modification work or services.

You might also want to file a small claims court lawsuit, but the chances of actually recovering money from a judgment is likely very small.

Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult with your own attorney.

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Great answers already posted from my colleagues.

Additionally, included here are a couple practical steps to finding help:

Call 1-888-995-HOPE (4673) for loan modification guidance from a HUD-approved counseling agency or to REPORT A SCAM (yes?)....

You may also visit the website:

Best of luck!

NOTE: This answer is made available by the lawyer for educational purposes only. By using or participating in this site you understand that there is no attorney client privilege between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed professional attorney with whom you have established an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question.

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In my view, you are most likely a crime victim, and I would contact the Attorney General's Office. In Florida, if an entity does that, it's a violation that subjects the ultra vires party to action by the Attorney General.

I had this happen with 2 CA firms and I contacted both the CA Attorney General and the CA Department of Corporations where the investigation started.

I would report that firm and person in every single state.

Just sayin,

I'm sorry that happened to you. Let your accountant know in case you can write any of that off as a "casualty loss."

NOT LEGAL ADVICE--FOR EDUCATIONAL PURPOSES ONLY. We don't know the facts and this is not legal advice. Seek the advice of licensed property law attorneys immediately so they can secure your rights. Hiring an attorney is a serious and important decision. Please ensure that you take the time necessary to evaluate and interview more than one attorney to determine whom to hire.

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