Mortgage modification company leaves customers high and dryPosted: Updated:
QUEEN CREEK - Like so many, Gerlinde and Anton Foltin were sold on Arizona's natural beauty before moving here five years ago.
“I like the nature,” Anton said, “it's beautiful.”
The couple is from Austria and thought buying a home in Queen Creek would be the first step towards achieving their American dream.
“We though OK, our future and everything will be nice and easy, and it turned out it was not so easy,” Gerlinde said.
When money got tight, and the value of their home dropped, the Foltins say they needed a lower mortgage payment.
So, they hired a company called Choice Loan Consulting in Gilbert to modify their home loan.
For $3,000, the couple was promised a 10% reduction in their monthly mortgage, but if that wasn't possible, they were assured of a 100% money back guarantee.
“So we thought OK, that's no risk and we signed a contract in March,” Gerlinde said.
Six months, and three bank denials later, the Foltins tried taking Choice Loan Consulting up on their money back guarantee, but never heard back from them, and never received a dime.
“What happened to all that money?” 3 On Your Side asked Jordan Ruzicka, owner of Choice Loan Consulting.
“It was put into operations, it's actually a pretty lengthy and expensive process to do these loan modifications,” Ruzicka said.
Ruzicka recently took over ownership of Choice Loan Consulting and tells 3 On Your Side he had every intention of helping people.
He says Choice just became overwhelmed with clients and that banks are so backlogged, they're having trouble keeping up.
“Why did you keep taking on new clients if you knew you owed these other people money?” 3 On Your Side asked.
“Somebody requesting a refund doesn't mean they're entitled to one so there were people requesting a refund that 99% of the time, per the contract, they weren't entitled to a refund,” Jordan explained.
When Choice shut down in December, Jordan says about 500 files were left unresolved.
“Nobody needs to go through this when you're in danger of losing your home,” Senator John Nelson said.
It's situations like these Senator Nelson hopes to prevent with a new "foreclosure consultant" bill.
If passed, it would penalize "a consultant who engages in conduct that constitutes fraud or deceit against a homeowner."
“You have the ability to say no after the fact, I want to pay you after the fact and if they don't want to sign the contract you know you've been dealing with the wrong type of person,” the Senator said.
The bill would become effective in late summer, unless an emergency clause is added.
“Because that says literally if we get two-thirds vote in each house, it will have an emergency clause and will be affective the day the governor signs it, so I think I have a good amendment because of you,” Senator Nelson said.
Meantime, the Foltins say they've learned a valuable lesson in all this, and remain confident their version of the American dream still exists.
“It's painful and we are sad,” Gerlinde said. “We could have a better life but it didn't work out so, so we look don't look back we look forward. and we make the best out of it.”
Choice's owner has filed for bankruptcy, and should know more about clients getting paid back in next month or so.