Valley family victims of another principal reduction offer

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MESA, Ariz. - Scott and Rebecca Barber moved into their Mesa home five years ago.

Since then, its value has been cut in half.

“We're upside down on our house so we decided that we wanted to see if we can negotiate with the bank or some party on behalf of us to reduce our principal,” Scott said.

While doing some research online, the couple came across a Florida company called Atlantic Mutual.

Scott said they offered to reduce the overall amount of their home loan to today's market value.

But first, the Barbers had to pay an up-front fee of $995.

“The cost was a little high but we thought, well, it might be worth it, and in the contract, it said that they'd give us our money back if they couldn't negotiate with the bank,” Scott said. “So we thought we'd go with them.”

Seven months after signing a contract, they received this letter notifying them the business was closing.

When they sent in this request for a refund, it was returned to sender.

When they tried calling, the phone lines had all been disconnected.

3 On Your Side was able to reach Brooke Errett, Atlantic Mutual's owner, who tells us she's gone out of business and is now waiting tables to try to make a living.

We asked her about the Barbers, who paid $995 up front.

In a statement Errett writes:

"In response to your inquiry, we are actively pursuing the means to provide refunds for all of our clients. Due to unforeseen circumstances in the secondary market of mortgage backed securities that came to light in October 2010, Atlantic Mutual, LLC, had to discontinue its program and close its business. We encourage all previous clients to submit refund requests, so that we may include their claims in our efforts.”

With little other recourse, customers from across the country have taken to the internet with complaints about Atlantic Mutual.

As well as other companies that made similar promises like Valley-based Queen Creek Mortgage and Principal Reduction Group, two companies 3 On Your Side has reported on before.

Both companies are now being sued by the Arizona Attorney General’s Office.

“I just want my money back,” Scott said.

So far, no legal action has been filed against Atlantic Mutual -- leaving the consumers, like the Barbers, feeling like they've been had.

“We just had such high hopes,” Rebecca said. “We just feel scammed.”

Homeowners looking to modify your mortgage in any way do not need to pay a third party company to do work on their behalf.

Homeowners are encouraged to contact your back directly, or consult with HUD-approved housing counciling agencies.