Homeowners upset with Lucas Law Center

March 10, 2009 5:00:42 PM PDT
For many homeowners, getting a loan modification is the last chance to save their home from foreclosure. That's lead to desperate measures by desperate people.

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You've probably heard the ads offering to get your mortgage reduced to affordable levels. This is the story of two people who responded to one of those ads

Mika Baba lives in a one-story four-bedroom home in Newark. She lives there with her father and son and pays a monthly mortgage of $1,850.

But she says her adjustable rate mortgage will more than triple in November to $6,000 a month.

"You're just waiting and waiting and stressed out because the shot payment is going to come and I won't be able to pay," said Baba.

Baba says she's regretted getting into this loan almost from the beginning and has been unable to renegotiate it.

Then she heard an ad from Lucas Law Center on the radio.

"And that's why I called Lucas Law Center because they made the promise that they can do the modification. If they couldn't you'd get your money back. And at this point, I'm in a corner where I have no choice," said Baba.

That's the same reaction Scott Castruita and Steve Ferdin had when they heard the same ad.

"I called them up, so they said they could make all the phone calls for me and they knew people and they said they know how to get hold of the people at Indy Mac," said Castruita.

Scott and Steve paid $3,200 up front to hire Lucas Law Center to negotiate a loan modification on their home in Antioch. Mika paid $3,700 to hire Lucas, and what do they say they got for their money?

"They haven't done anything for me," said Baba.

"They reported nothing to me. All they said was they were waiting for some call backs and I said well what exactly did you do because if its only making phone calls, I already spent hours and hours on the phone doing that," said Castruita.

The Lucas Law Center was unable to get a loan modification for either of them.

"It's just hard. I can't take any of this with me. This is not just," said Baba.

7 On Your Side has received a total of four complaints against Lucas Law Center.

Attorney Paul Lucas tells us in all about 20 complaints have been lodged against his law firm. But he says that's a small number compared to the 700 clients he says his firm have served. He declined a request for an on-camera interview.

Alan Fisher is Executive Director of the California Reinvestment Coalition, a coalition of 200 consumer groups in California.

"I think we're very concerned about attorneys and others that promise a quick fix for people's problems. I don't think they're as well connected to the mortgage companies to be able to resolve things," said Fisher.

Mika, Scott and Steve all requested a refund from the Lucas Law Center.

Lucas turned down Mika because she fell under two exemptions to its refund policy. She is in a negatively amortized loan and she had been previously denied for a modification.

Those exemptions were stated explicitly in Mika's contract, but she said they were never explained to her.

We called Lucas Law Center and it agreed to refund her money 100 percent. Scott and Steve also received a refund, after they threatened to file a formal complaint with the state bar.

There are already restrictions on who can take money upfront for loan modification services, but now there is a move to do away with the advanced fees altogether.

New legislation by State Senator Ron Calderon would prohibit advance fees for loan modification services. SB 94 would also require full disclosure that the service is available for free elsewhere, mainly from federally certified housing counselors.

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