Sub-prime revisited

As far as company names go, you would think that the "Federal Loan Modification Law Center" sounds pretty solid and reputable. Wouldn't you?

We have just read a story in the Australian Financial Review about a company which promised borrowers in California that, for a fee, they could negotiate lower loan repayments on their mortgages. Everyone has heard about "sub-prime" lenders and "ninja" loans (no income, no job or assets) that mushroomed during the US real estate boom - it turns out that the same guys that amassed a fortune selling these loans just changed the script and the product. Apparently they are still working out of the same offices! Plus they are charging fees up to $US3,495 with most of it paid up front!

Oh, and guess what? According to a New York Times investigation, despite all of the promises the company often failed to deliver reduced mortgage payments. The moral of this story has to be do your research and don't pay fees up front to mortgage brokers!