FRESNO, Calif. (KFSN) --Here's a warning for anyone who has refinanced or looked to modify their home loans. A company offered assistance but ended up stealing from a client.
"I got behind on my mortgage. And, actually, I couldn't catch up," said Edward Harper, fraud victim.
So, Harper decided to go online and look for companies to help him refinance or modify his loan. He found Fresh Start Financial Services, which offered leaseback programs.
"Fresh Start was created, you know, to support distressed home owners," said Alex Sylvester, US Postal Inspector.
Here's how it works-- a homeowner sells his home to a service to eventually buy it back. In this case, Harper could get a reprieve from paying his mortgage and save some money. Fresh Start Financial gets a secure long-term investment before Harper buys the home back.
That was the plan. But that didn't happen.
"I got a letter from the bank, a bank I had never dealt with in my life, saying I owed. My mortgage is $1200 dollars a month," said Harper.
As he is trying to figure out what happened he got yet another surprise when he answered his door bell.
"Uh, excuse me, I just bought this house. I said 'what?' I said 'How would you buy my house?' He said, I got it from a sheriff's sale," said Harper.
Turns out several employees from Fresh Start Financial were stealing from the company. They didn't make the mortgage payments on the home, instead took the equity in the home.
"That equity is supposed to be put into an escrow account to pay his monthly mortgage payments, which that wasn't done. That equity basically was used for these criminals' lavish lifestyle," said Sylvester.
He wasn't the only victim-- 18 other victims lost $3.8 million in this scheme.
"You can do a loan modification yourself, you don't actually have to pay a company, you just have to be persistent. You have to contact your lender, you know, you may have to do some legwork but you can actually obtain a modification yourself without having a company do it for you," said Sylvester.
Six people were convicted in this case and they are awaiting sentencing. As for Edward Harper, when authorities heard his story he was able to buy back his home and is now in the financial clear.