South Jersey Families Losing Homes After Falling Victim to Nationwide Mortgage Scam

For the last 15 years, William Friedrich’s family has made a lot of memories living in their South Jersey home.

"It’s not so much me but it’s my kids. I mean, this is the only home they’ve ever known,” Friedrich said.

The Friedrich family fell on hard times last year and weren’t able to pay their mortgage. In a desperate attempt to save their Berlin home, he contacted a mortgage modification company after getting a flyer in the mail.

“We thought, you know, it was God sent this guy calling us. We got that paper, you know,” he said.

But the Federal Trade Commission says the company was a fraud. The Friedrichs lost thousands of dollars and are now being evicted. They have to leave by July 15.

"They're going to take all of this all away from all of us,” Karen Friedrich said sobbing.

The Friedrichs aren’t alone. The feds say 500 people across the country fell prey to this scheme. In the Philadelphia area, we spoke with nearly a dozen.

Every family has a similar story. They turned to Hope Services, also called HAMP Services, to modify their mortgages and lower their interest rates. Now, they're fighting to keep their homes.

“They told me that they were a government program. That they would make my home affordable,” said Margot Garcia of Pennsauken.

“I thought thank God somebody is helping me save my house,” said Sewell resident Deborah Krug.

Adding trust was the use of President Barack Obama’s name and professional looking information. Some thought it was a program started by the government, but in fact the name was slightly different.

The real government program is The Home Affordable Modification Program or HAMP. It uses a phone number ending in the letters “H-O-P-E.”

“They repeatedly reference government programs specifically programs related to Obama. They use Obama's name quite a bit,” said Federal Trade Commission attorney Jonathan Cohen.

Cohen said the homeowners had to make three payments to the phony mortgage modifiers.

“Hundreds of customers made these trial mortgage payments. Unfortunately, not a single one reached any of their lenders,” he said.

Instead, Cohen says, those behind this scheme stole around $2.5 million in payments.

According to court documents, the money was allegedly spent on things such as trips to Las Vegas, country club dues and sports memorabilia.

"This is devastating for these individuals that are individuals who have already experienced some form of financial hardship,” Cohen said.

The FTC went undercover and busted the group that they say took the money.


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Investigators asked Hope Services for a loan modification on a vacant lot, made the initial payment and then followed the money. The FTC recorded on video one of the suspect’s girlfriends cashing their check.

"Unfortunately these scams are very common," Cohen said.

For the Friedrichs and others, there’s little time to worry about what Hope Services did. Now they need a roof over their heads and a new place to call home.
“I’m not going to lie to you. It’s not going to be easy. We’re going to have a lot of hard times. There might be nights in motels. There might be nights in the car,” William Friedrich said.

“This is leaving family, family, friends. It’s like I don’t even know. It’s destroying, it’s destroying me inside,” Karen Friedrich said.

The FTC has filed a civil suit against five California men connected to Hope and HAMP services. NBC10 reached out to them. Only one of their attorneys responded saying his client did not solicit homeowners and was not aware HOPE and HAMP services were out of compliance with mortgage modification regulations.

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