American Mortgage Consultants is facing a consumer protection lawsuit from the Colorado Attorney General’s office.
The company’s owner, Oliver Paul Mandonado and its principal employee, Santiago Fabian Peieda, are accused of defrauding consumers seeking loan modifications and foreclosure relief.
According to the complaint, American Mortgage Consultants used deceptive advertisements to attract 170 consumers to the loan modification company from Jan. 2009 to March 2010. The company is suspected of using deceptive telephone marketing, direct mail, radio advertising and Web marketing to attract consumers. It also used video of President Barack Obama and materials from the FDIC to give consumers the impression that the company was affiliated with the federal government.
Mandonado and American Mortgage Consultants are suspected of charging these consumers $2,500 in upfront fees for its services, a violation under state law. According to papers filed in Denver District Court allege that American Mortgage Consultants did little – if anything – to help its customers renegotiate or modify their home loans beyond shiping off their loan modification application to an Ohio-based company.
“Consumers should always be suspicious of any guarantees a loan modification company makes about being able to keep you in your home or reduce your loan payments,” Attorney General John Suthers said. “American Mortgage Consultants’ activities were especially troubling because they did virtually nothing for their ‘customers’ beyond taking their money.”
Suthers encouraged consumers facing foreclosure to obtain free help from the Colorado Foreclosure Hotline at 1-877-HOPE (4673) before hiring a company to modify a home loan. If a consumer is still interested in hiring a loan modification company, Suthers encouraged consumers to bear in mind:
• It is illegal in Colorado for a loan modification or renegotiation company to charge you an upfront fee. Loan modification companies can only charge you once their services are completed.
• Consumers should be wary of any company that tells you to stop making your loan payments or to stop working with your lender. Failing to make payments could result in a foreclosure.
• Never ignore communication from your lender at the behest of a loan modification firm. Most lenders have loan modification programs that can help you save your home. In some cases, all a borrower has to do is contact his or her lender and provide some current financial information.
• If a company promises to get rid of your debt, they are making a promise they cannot keep.
• Check out any loan modification company you are considering hiring. The Better Business Bureau maintains ratings of businesses. Any company with an “F” rating should be avoided.