Company Execs Quick To Shift Blame, Invoke "Flawed Business Model" Defense To Explain Collapse Of Alleged Loan Modification Ripoff Racket

In St. Louis, Missouri, a recent column in the St. Louis Post Dispatch describes the aftermath left by the now-defunct Home Safe Financial Assistance. The company's principals attempt to give reasons for their firm's problems in the following excerpt:

• Derek Doherty, Home Safe's president and owner, and Elijah Norton, the company's former chief executive, said their company really did help customers save money and stay in their homes.

• The men boasted that they successfully modified the mortgages of 50, maybe 70 customers. The problem, however, is the company had between 300 and 400 paying clients. At least 200 of them paid for Home Safe for work it didn't perform.

• Norton, who now lives in Kansas City, blames the company's collapse on a flawed business model. He said too much of what consumers paid ended up with so-called affiliate marketers hired by Home Safe to drum up business.

• One of the biggest, St. Peters-based Capital Debt Management, is owned by John Jacob Ehlinger. He previously owned CarSafe, a St. Charles company that sold extended auto-service contracts.

• Doherty, the Home Safe owner, said Capital Debt Management lied to customers about how mortgage-modification process worked, improperly promised specific reductions and instructed consumers to stop making house payments. "When we heard this was going on, we issued them a formal warning," Doherty said in an e-mail. "They seemed to clean up but their production dropped drastically."

• Ehlinger said that his company did nothing wrong, and that Doherty is passing the buck. "If he had such a problem in the ways the contracts were sold, he should have cancelled them," Ehlinger said. "He shouldn't have taken their money."

For the story, see Customers of mortgage-modification firm often got nothing for their money.