ConsumerWatch: Defunct Pleasanton Loan Modification Firm Guilty Of Grand Theft

PLEASANTON (CBS 5) - A Pleasanton company that promised to help desperate homeowners get loan modifications is out of business and said it may reimburse some clients who paid up to $3,500 apiece.

The company went by as many as 20 names, including American Financial Funding, The Loan Guys, and Provident and Associates. It has operated out of an office at39 California Street in Pleasanton for the past four years.  It's not clear if any of its clients actually got loan modifications,  though the company's lawyer Sara Reif, said "some" of them did.  She could not provide numbers, however.

On Monday, the company pleaded guilty to Grand Theft, according to Alameda County Deputy District Attorney David Lim.

"They were preying on homeowners (and) charging advance fees, while doing little or no work," Lim said.

Under California and federal law, it is illegal to accept advance fees to do a loan modification.

Since the case was filed against the company, no one is going to jail. Lim said that's because of the difficulties involved in pursuing a case against the individuals who ran the company.

"We have to weigh the benefit of punishing one individual versus the ability to get restitution," Lim said.

As part of the agreement, the company said it will reimburse its customers, though whether there are funds available to do that is in question. On Thursday afternoon, company officials provided a spread sheet to Alameda County District Attorney with the names of paying clients.

Deputy D.A. Lim said there are 535 clients on the list - all paid between $1,500 and $3,500, for a total of $1,550,855.

The company's attorney certified letters would be sent to those clients in the next few days, informing them they are eligible for a refund. Whether those clients will actually see any money isn't clear.

"Refunds will be made until the money is expended," said Reif.

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