St. Paul Homeowner Facing Foreclosure Opts For Free City Housing Counselor For Help; Proposal From Loan Modification Firm Didn't Feel Right, She Says

In St. Paul, Minnesota, Minnesota Public Radio reports:

• When a man called Crystal Brown out of the blue promising to modify her loan, the St. Paul single working mother of three thought he was a godsend. "He was very smooth, very nice, very understanding, not critical," Brown said. "He would lead you to believe he's 100 percent on your side, like he's really fighting for you."

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• He identified himself as an employee of KirkLand Young, a loan modification company based in Miami Beach. Brown agreed to let him fax over some paperwork, and she almost signed the contract. But once she read it, Brown saw that she would have to pay a non-refundable fee of $500. If she accepted the new mortgage, she would have to spend an additional $1,200.

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• She said something didn't feel right about the arrangement. Brown never sent in the papers. Instead, she sought help from a foreclosure counselor with the city of St. Paul, who offered to work with the lender at no cost.

For the story, see Companies vow to change mortgage terms -- for a price (Loan-modification companies can charge thousands of dollars for this service, even though many nonprofits will do it for free. Housing advocates say the firms represent the latest form of industry predators).

Go here for the contract Crystal Brown refused to sign.