Watch Out for the Mortgage Vultures: Cash-Strapped Homeowners Face New Threat

Capitalizing on the collapse of the housing market, a Fair Oaks, Calif., company claimed to provide loan-modification services while siphoning money from clients on the brink of losing their homes, say several former clients and employees.

Superior Properties, formerly 2nd Chance Negotiations, operates by soliciting an up-front-fee from homeowners facing foreclosure in return for legal counsel, a lower principal on their mortgage, and a "100 percent money-back guarantee." It's the type of promise that the Federal Trade Commission says is typical of mortgage scams that are the subject of a recently announced nationwide crackdown by the federal government.

2nd Chance Negotiations attracted over 1,000 customers before the California's Department of Corporations (DOC) and Department of Real Estate (DRE) issued separate desist-and-refrain orders on March 24. The joint investigation that led to the desist orders stated that the business was "not licensed and/or legally authorized" to perform its promised services, nor to collect fees in advance -- fees that ran as high as $6,000.

Former employees say 2nd Chance co-founders Christopher Mesunas and Michael Garcia were largely undeterred by the legal orders to cease operations. According to Deborah O'Campo, who served as one of five negotiators at 2nd Chance from Feb. 10 to April 1, the company ceased operations for 48 hours before reopening under a new name, Superior Properties.

"They asked us to start calling banks before we had filed the requisite legal permission to negotiate on behalf of our clients under the name Superior Properties," O'Campo told the Huffington Post. O'Campo says she was the only licensed broker of the five negotiators employed by 2nd Chance.

When confronted with this allegation, Garcia questioned O'Campo's knowledge of the legal system. "There can't be one employee of mine who you talked to who has the skill to know what an appropriate document would be," he said. (Mesunas did not respond to requests for comment.)

Garcia also claimed that the DRE has been changing the rules. He says that only recently has the DRE required that mortgage negotiators have a broker's license.

"Now they [the DRE] want people negotiating on the phone with the bank to be licensed. As of last week, everyone on the phone with the bank is licensed, because that's when we got the information."

O'Campo says employees were "alarmed and befuddled" when Mesunas loaded 2nd Chance's case files into employees' cars after receiving the desist-and-refrain orders.

"Even our new 21-year-old assistant loaded files into his truck," said O'Campo. "Then they drove them around town for a couple days. When they finally came back and returned the files, there was no explanation to the staff, and Chris [Mesunas] refused to answer my questions."

The files that had been dispersed via car trunk throughout the Sacramento area included Social Security numbers, bank accounts and the complete contact information of 2nd Chance clients, said O'Campo.

Garcia responded, "Not all the files were taken out of the office. We had an attorney we were working with, and he wanted to see the files and he didn't want to come to our office." Garcia would not provide the name of this attorney. "I have a right to take the files wherever I want to take them. They're my files."

When these files were returned to the office days later, employees were told to contact each client and convince him or her to sign a release that would transfer their account from 2nd Chance to Superior Properties, allowing caseworkers to negotiate with banks under the new name. The reason given to customers followed a general story line -- 2nd Chance had folded and Superior Properties, which claimed to be completely separate company, would take on their caseload if the client just signed on the dotted line.

Mesunas had registered Superior Properties with the DRE in 2000 but did not begin using the name until 2nd Chance was served the desist orders. He has also operated under the names A Superior Mortgage, Realty Word -- Superior Realty, 2nd Chance Capital, Mesunas Properties Inc., and others.

Among 2nd Chance's clients were Pamela and Richard Zombeck of Salem, Mass., whose foreclosure story HuffPost featured in February. The Zombecks were driven to look for outside help after the government-sponsored Hope for Homeownership program failed to renegotiate their adjustable-rate mortgage with Ocwen Financial Services. The loan's interest rate was quickly climbing to more than 13 percent, and the Zombecks were exhausted from months of negotiation with Ocwen, where they say just getting someone on the phone was a battle.