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This Family Spent $6,000 to Save Their Home and Still Wound Up Facing Foreclosure

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Lageshia Moore of Far Rockaway, N.Y. says her family spent $6,000 in hopes it would save them from foreclosure. “Some people might say, ‘OK, just get a new house.’ But it wasn’t that simple,” says Moore.

When Lageshia Moore and her husband found their home in 2006, they thought it would be a perfect place to raise their family. The $549,000 Far Rockaway, N.Y., duplex even had future income potential if they could find a reliable tenant and rent out one half of the house.

In order to purchase the property and avoid primary mortgage insurance, the couple took out two mortgages to cover the costs.

Like millions of Americans who purchased homes at the peak of the housing bubble, their timing could not have been worse. Moore, a teacher, left her job in 2007. It soon became impossible to meet their $4,000 total monthly mortgage payments. By the summer of 2008, they were deep in default, and the recession sent their home value plummeting.

They were officially underwater on their house, and the family was living solely on Moore’s husband’s income as a driver. Eventually, they were notified that their lenders had begun the foreclosure process.

“Some people might say, ‘OK, just get a new house.’ But it wasn’t that simple,” Moore said. “This was the house where we were raising our family. My husband is very proud and homeownership means a lot to him — so we weren’t going to just let it go.”

Instead, Moore and her husband did what many families facing foreclosure do: They began looking desperately for “foreclosure relief” companies, law firms, and groups who promised help. A nonprofit connected them to a court-appointed attorney, but it didn’t stop the foreclosure process. So they turned to companies that advertised foreclosure relief on radio stations and online.

Over the course of six years, the family handed over thousands to a handful of relief groups they thought could stop the foreclosure. “We were desperate, and we thought, ‘OK, we’ll hand over this money to someone and they’ll just fix it,’” Moore said.

One of those foreclosure relief companies was Florida-based Homeowners Helpline, LLC. In 2015 the family gave the company a total of $6,000: an initial $2,000 down payment, and then $1,000 in four monthly installments. By that time Moore had found a new job, but the family hadn’t paid the full mortgage amount in years.

Moore shared the contract with MagnifyMoney, in which Homeowners Helpline says it will “perform a mortgage loan review and audit,” including actions like sending a cease-and-desist letter and a “Qualified Written Request” for information about the account to the family’s lenders.

Here’s what Moore says happened: Homeowners Helpline connected her family with a New York City lawyer who “kept asking for endless paperwork, month after month after month,” and who eventually stopped answering their calls, she claims. They finally got in touch with him just before the house was set to go up for auction, she said, and he told them the efforts to stop the auction had failed.

“We were horrified,” Moore said.

Homeowners Helpline told MagnifyMoney a different story. Sharon Valentine, a processor at Homeowners Helpline who worked on Moore’s husband’s case, said the family was slow to hand over needed paperwork and “unrealistic about their expectations.”

Crucially, Valentine said, the family didn’t tell Homeowners Helpline the house was actively in foreclosure until they mentioned the auction. “And then it was like, ‘Wait, what?’” Valentine said. The company would have taken different actions had they known about the foreclosure proceedings, she added.

“We can’t help you effectively if you don’t give us all of the information and the paperwork,” Valentine said. “In general, some clients come in and they hear their friend was able to get a 2% [mortgage] rate or cut their payments in half, and it’s like, ‘Well, that’s a very different situation.’ We try to help educate, but sometimes you can’t change that expectation.”

The Best Help is Free

But there is a free resource to educate panicked homeowners about expectations and provide foreclosure assistance — as well as help them avoid scam companies that will steal their money. NeighborWorks America runs LoanScamAlert.org, which aims to be a one-stop shop for people with questions about or problems with their mortgages.

The Loan Modification Scam Alert Campaign launched in 2009, when Congress asked NeighborWorks America to educate and help homeowners. LoanScamAlert.org offers resources including information about how to spot and report scams, and lists of trusted authorities who can help. Its main goal: Drive people to call the Homeowner’s HOPE Hotline, at 888-995-HOPE (4673), which is staffed 24 hours a day by counselors who work at agencies approved by the U.S. Department of Housing and Urban Development (HUD).

“We provide them with a single, trusted resource,” said Barbara Floyd Jones, senior manager of national homeownership programs at NeighborWorks America. “It gets confusing when you see companies with all of these similar names advertising on the radio or TV, and then you have to research them. We want to let people know they don’t have to pay a penny for assistance.”

Anyone — regardless of income or other factors — can contact the counselor network to receive free advice and help. Homeowners aren’t always aware of the myriad government-affiliated groups that can provide assistance, or of the federal and state programs created to speed loan refinances and modifications, Floyd Jones said.

“We can never promise that everyone will be able to save their home; there are a variety of circumstances,” Floyd Jones said. “But we can promise a trusted counselor will listen, take a look at your paperwork if you want, and tell you all of your options.”

In fact, if a homeowner grants permission, the counselor can contact the mortgage lender directly to discuss options to stop the foreclosure, modify the terms of the loan, or otherwise make a deal. If need be, homeowners will also be connected with vetted legal assistance — although Floyd Jones noted not every situation requires a lawyer.

True to LoanScamAlert.org’s name, the hotline counselors also take complaints about mortgage-related scams: third-party companies that take the money and run, or slip in paperwork that unwittingly gets homeowners to sign over the deed to the house.

The Federal Trade Commission received nearly 7,700 complaints about “Mortgage Foreclosure Relief and Debt Management” services in 2016 — down from almost 13,000 in 2014, but still a significant figure.

“Stopping phony mortgage relief operations continues to be a priority” for the FTC, said spokesman Frank Dorman.

Both the FTC and LoanScamAlert.org offer tips to avoid scams — and to make sure you’re taking advantage of all federal and state programs that could help.

Red Flags:

  • They ask you to pay before any services are rendered.
  • Pressure to pay a fee before action is taken, sign confusing paperwork, or hire a lawyer off the bat. As with any scam, fraudulent mortgage relief services rely on high pressure to push vulnerable homeowners into taking action. Companies shouldn’t ask for “processing fees” or “service fees” early in the process, Floyd Jones said, as early foreclosure-stoppage efforts don’t cost anything. Be wary of signing any document, as you could unwittingly surrender the home’s title or deed to a scammer.
  • They make promises they can’t keep. 

    Promises or guarantees they’ll save your home from foreclosure — or even claims like “97% success rate!” No one can guarantee results.

  • They say they’re affiliated with the U.S. government. 

    Companies that claim to have an affiliation with a government agency. Some scammers may claim to be associated with the government, charging fees to get you “qualified” for government mortgage modification programs like Hardest Hit Fund. You don’t have to pay for these government programs — and lenders, particularly big banks like Wells Fargo and Bank of America, may be able to offer you their own modification options directly.

  • They want you to send your mortgage payments to them.

    Companies that tell you to start paying your mortgage directly to them, rather than your lender. They may promise to pass the money along, but they could pocket it and disappear.Companies that ask you to pay them through unconventional methods: Western Union/wire transfers, prepaid Visa cards, etc., instead of a check. They’re trying to get your money in a way that’s hard to trace.

As for Lageshia Moore and her husband, the family ultimately filed for bankruptcy — a move that can stop the foreclosure process, but only temporarily — and are now working with a law firm on a loan modification she hopes will reduce their payments to a manageable monthly sum. In giving advice to others, she reiterates the simplest but most important tip: “Just do your research.”

“You’re panicked, but you have to do your due diligence,” she added. “Really sit down and weigh the pros and cons: foreclosure, short sale, etc. What does this process or contract really mean? It’s an emotional time, but you have to try to keep the emotion out of it. That’s what I would tell myself.”

What to Do if You’re Facing Foreclosure:

  • Call a HUD-certified counselor at 1-888-995-HOPE. You’ll get advice and help for free, and while counselors can’t ever promise to save a home, they’ll be happy to take a look at any paperwork or information about your case, contact your lender about options if you grant permission, and connect you with vetted legal assistance if need be.
  • If you’re not facing foreclosure yet, but you’re worried that you’re about to run into trouble, contact your mortgage lender’s loss litigation department. They may be willing to work with you. Your lender can also tell you whether you’ll qualify for government programs.
  • Overall, don’t let desperation stop you from taking the time to research any potential actions, including signing on with a relief company. Explore the company’s background and track record. Check online for reviews from other homeowners — and be sure to look up phone numbers too. Many scam companies simply shut down, reopen under a new name, and retain the same phone number.
Julianne Pepitone
Julianne Pepitone |

Julianne Pepitone is a writer at MagnifyMoney. You can email Julianne here

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Featured

High Rent Drove This NYC Couple to Move to 12 Apartments in 12 Months

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Couple is Moving to 12 New York City Apartments

Photo by Roderick Aichinger

For most people, moving day is a dreaded day – especially in a busy, crowded place like New York City. But Felix Zeltner, 34, and his wife Christina Horsten, 33, are planning to move 12 times in 12 months, all in the pursuit of the perfect (and affordable) New York apartment.

The couple, who are parents to 20-month old daughter Emma, are calling the adventure 12×12. The idea to try a dozen neighborhoods in as many months grew out of their own frustration at the rising cost of living in the city. The average one-bedroom apartment in Manhattan rents for an $3,359 per month, according to the latest Manhattan Rental Market Report.

The couple moved to New York City from Berlin, Germany four years ago when Horsten’s employer, the German newswire service Deutsche Presse-Agentur, named her its New York correspondent. Horsten grew up in Germany but was born in New York.

“At first we went to [Manhattan’s] Upper East Side, where my family had lived, and then we got priced out,” said Horsten. “Then we moved to Park Slope, [Brooklyn,] and we got priced out there. It was tiring. We didn’t want that to keep happening.”

When their Park Slope landlords announced a $400 monthly rent hike, they felt overwhelmed by the prospect of finding  a new apartment.

“We looked around and thought all of these different neighborhoods were so interesting,” Horsten said. “At first it was this crazy idea, that maybe we could try so many of them.” Their German friends thought they were crazy. New Yorkers, on the other hand, were far more enthusiastic.

“[Our New York friends] had such enthusiasm and so many contacts. So all of a sudden we thought, maybe we can do this,” said Zeltner.

They’re hoping to live in a dozen different neighborhoods across all five of New York City’s boroughs thanks to the kindness of New Yorkers and some serious downsizing.

‘This might not work.”

In preparation of their big move, the couple took a hard look at their possessions and went immediately into purge mode.

“We arrived in New York with one suitcase each, and somehow we ended up with so much stuff over the years,” Horsten said. They donated many of the things they no longer needed to New York City nonprofit Housing Works.

Meanwhile, Zeltner, who is self-employed and works on a variety of media and startup projects, told his wide swath of professional contacts about his family’s plan.

The couple lucked out with their first apartment — a free loft trendy Long Island City apartment building East of East.
The couple lucked out with their first apartment — a free loft trendy Long Island City apartment building East of East.

His friend and collaborator, Amol Sarva, made the family a generous offer: For the first month of their experiment, Sarva offered to let them stay rent-free at East of East, an apartment building in trendy Long Island City, Queens. Sarva, a startup founder and architect, designed and constructed the building in 2012. In exchange for a month-long stay in one of Sarva’s vacant lofts, the couple agreed to pay for utilities and supply their own furniture. When they move to their next spot, they will leave their furniture behind for Sarva to use to stage apartments.

“Felix is a dreamy adventurer,” Sarva told MagnifyMoney. “When he told me he was going to just unhook from his terrible apartment and go peripatetic like Socrates, I thought … let me give them a place to crash for a few weeks while we renovate this apartment.”

The couple hasn’t completely decided which neighborhoods they will move to from month to month. As of now, only August is a sure thing. They found a place to rent in Chinatown. As for the next 10 months, “We are not really sure,” Zeltner said.

“This has been so freeing, so liberating. But the fact that we don’t know where we’re going to live in September, that’s not such a cool feeling,” he added. “This is an experiment. It might not work.”

Finding mostly-free digs for their first month was a lucky break they don’t reasonably expect to replicate. They plan to keep working full-time and pay their way the rest of the year, looking for furnished apartments that rent for $3,000 a month. Through a newsletter they launched with their website, they’re hoping to crowdsource tips about affordable rentals from their subscribers.

“This is like a crowdfunded project, without the funding,” Zeltner said. “We need more New Yorkers reaching out to us, whether it’s recommending a neighborhood, telling us about a place their auntie rents, or helping us move. We can only do this if people continue to help.”

After a reporter at local news site DNAinfo wrote about their project, a woman contacted the couple to offer to let them house-sit her Upper West Side, Manhattan, apartment for free in March 2017.

Other help has come in the form of discounted services, including an offer from moving box rental company Gorilla Bins.

The couple is “deeply appreciative” of the assistance and support they have received, Zeltner said, and they plan to give back in several ways.

bright times ahead #chinatown #loft #apartmenthunt #nyc #nyc12x12 thank you @teget

A photo posted by NYC12x12 (@nyc12x12) on


At every 12×12 apartment, they will host a large dinner party for their temporary neighbors. The couple are also planning to launch a podcast series about their neighborhood experiences and discoveries, featuring many interviews with locals.

Ideally, the couple said, they will find enough apartments to keep the project going for all 12 months and ultimately settle on the perfect neighborhood to raise their daughter.  But, for now, the project is really about exploring the city.

“[We] can wake up and have a Uruguayan breakfast, go to a Nigerian neighborhood for lunch, have coffee with Italians, and end the day at an old American diner with a burger and a milkshake,” Zeltner said. “You can’t get that diversity of experience in any other city. We want to experience as much as that as possible.”

Follow the 12×12 project on Twitter and Instagram.

Julianne Pepitone
Julianne Pepitone |

Julianne Pepitone is a writer at MagnifyMoney. You can email Julianne here

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