Mary Ann Borney Graves desperately wants to keep her home so it's not surprising that she took the bait.
Graves has lived in her St. Louis house for 15 years, but she's past due on her mortgage and fears that her lender will foreclose on her home. She believed the situation was hopeless until she saw a television commercial explaining how a mortgage consolidation could allow her to keep her home.
The company, Blue Fox Financial, seemed to be the answer. It would get her mortgage company to "modify" her mortgage, which means the mortgage would be restructured so that Graves could keep her home.
A Blue Fox representative told her to fax a half dozen pages of personal information and they would take care of her problem. That cost her $950.
When we called her mortgage company Ms. Graves learned that she could have done the same thing for free.
Here's what happened: She faxed the papers to Blue Fox, Blue Fox faxed the papers to the mortgage company, and the mortgage company is restructuring her loan.
She didn't need Blue Fox, and Blue Fox knows that, but it charged this low-income single mom nearly $1,000 bucks anyway.
A Blue Fox representative defended the transaction, and while it may be legal, it appears the company took advantage of Ms. Graves and charged her a hefty fee for something she could have done for free if she had done it herself or consulted a much lower priced service in St. Louis.
The Blue Fox rep told us that if there was a problem it's because Graves didn't follow-up with the mortgage company, even though she had paid Blue Fox to do all the work.
But a customer service employee at Home Eq, Graves' mortgage company, says Graves has only been pre-approved for a lower five year fixed rate loan. Home Eq told us Blue Fox did nothing that Graves couldn't have done herself for free.
"If you're calling specifically about what that company did they really didn't do anything except give us her financial information, which she could have done on her own behalf," the Home Eq representative told us.
And, there's still no guarantee she'll get the lower rate.
In April, the Federal Trade Commission sued companies it claimed were involved in mortgage scams. Blue Fox was not one of those companies. Still, the allegations raised against those companies are similar to Ms. Graves's complaints about Blue Fox.
So, how can you avoid stumbling into a deal you may regret? The Better Business Bureau offers some good advice.
As I sat Ms. Graves's family room and listened to her painful story, it became clear to both of us that she could have avoided this mess by making a few phone calls to her mortgage company. In most cases, experts say that lenders are willing to modify the conditions of the loan so that you can pay them something toward the debt.
The St. Louis Urban League has a free program that will help you too.
If she had simply called her mortgage company as soon as it was obvious she wasn't going to make the loan payments, they would have probably worked it out without the cost and headaches that eventually prompted her to call us.
Obviously, it doesn't always work out, and many people complain that their mortgage companies are unresponsive, but that didn't appear to be the case for Ms. Graves, who told me that she hopes her story will help others avoid her problems.