Valley homeowners warned of principal reduction offers

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PHOENIX - 3 On Your Side is warning homeowners who are trying to refinance their home about offers for a principal reduction with an up front fee.

“This was the original document I received,” homeowner Marc Goldberg said.

It came in the mail.

An official looking letter notifying Marc he may be eligible for a principal reduction.

“Like a lot of people in the Valley, our home has depreciated in value,” he said.

At first Mark was hesitant, but he caved to curiosity.

Mark says after meeting with Principal Reduction Group LLC in person, he decided to sign up for the program.

“They basically said I was a good candidate because I was one of the people that actually kept up on my bills,” Marc said.

For $5,500 dollars, PRG states in its contract “it will contact your lender on your behalf to seek approval of the principal reduction.”

It requires “all communications with the lender be made through PRG,” and that if “you are unlikely to qualify, PRG will refund the entire fee within 30 days.”

Marc says two months later he still hasn't heard anything about his home loan.

“Nothing,” he said. “They have not done one thing.”

Apparently, Marc isn't the only one.

Last month, Arizona's Attorney General filed a lawsuit against Principal Reduction Group accusing it of “actively misrepresenting specific, projected results to potential clients while failing to disclose that none of its clients had obtained a principal reduction through its services.”

3 On Your Side tried to track down the PRG owner, Brian Cutwright, first at his Scottsdale office and then at his Mesa home.

Late Wednesday, Cutright sent a statement to 3 On Your Side.

It read, in part, “Our attorneys are working closely with the Attorney General’s office to resolve any concerns they have about our business and we are confident that we will be able to fulfill our obligations to our clients.”