Both the Federal Housing Administration and mortgage investor Fannie Mae recently have launched options in the energy conservation arena. Here’s a quick overview, with some pros and cons:

The FHA’s PowerSaver program allows eligible owners to borrow up to $25,000 at fixed rates between 5% and 7% for as long as 20 years to finance high-efficiency windows and doors, heating and ventilating systems, solar panels, geothermal systems, insulation and duct sealing, among other retrofits.

Although PowerSaver is officially a pilot program, Shaun Donovan, secretary of Housing and Urban Development, estimates that 30,000 such loans will be closed in the next two years. It eventually could become a major national program for residential energy upgrades, with total loans extending into the millions, he said.

One important element in the program is energy audits. Although they won’t be mandatory, most participating lenders are expected to encourage owners to sign up for an energy efficiency analysis by a certified specialist. The audit should pinpoint where your house is leaky or otherwise inefficient in energy use, and should recommend the specific types of upgrades or additions that could help cut your bills and reduce greenhouse emissions.
The FHA will insure loans to cover the improvements up to the $25,000 maximum under the following guidelines:

The house must be your principal residence, detached and single-family only. No rentals, no investor homes, no second homes.

You’ll need to demonstrate that you are a solid credit risk. Minimum FICO credit scores of 660 are required, plus your total household monthly debt-to-income ratio cannot exceed 45%.

Houses with negative equity will not qualify. You’ll need some level of equity in the property; there is no mandatory minimum stake, but the combined primary mortgage debt plus the PowerSaver second lien cannot exceed 100% of the appraised market value of the house. You could, for example, have a 10% equity position in a $200,000 home, and still qualify for up to $20,000 in a PowerSaver.

Lenders are likely to take an extra hard look at all your income and asset documentation because, unlike other FHA-insured mortgages, PowerSaver will cover only 90% of the lender’s loss or insurance claim in the event of a default.

An e-mail to local media was sent out Monday afternoon, following the decision made by the Board of Education at a special May 9 meeting.

“Sandy emerged as the front-runner from a group of superb and highly qualified finalists for the position,” said José Escarce, president of the board, in the e-mail. “Her intelligence, experience, personal warmth, focus on all students, and collaborative approach make her ideal for our schools and communities.”

Lyon has served as the Chief Leadership Officer in the Palmdale Unified School District for the past two years, where she supervised, evaluated, and provided support for the District’s twenty-four principals. She collaborated with all District departments to address issues of planning, communication, and implementation. While at Palmdale, Lyon also focused on improving middle school student achievement.

Prior to her work in Palmdale, Lyon served as the Superintendent/Principal of Hughes-Elizabeth Lakes School District. As Superintendent/Principal of this one-school district, Ms. Lyon wore many hats, working with the Board of Trustees to develop and update policies, with the Chief Business Officer in labor negotiations, and providing staff professional development and implementing new instructional programs and practices.

“We are thrilled that she will be assuming the leadership of our district this summer, and we look forward to working with her to make our schools better for all students,” Escarce said.

Her other administrative positions have included the Director of Curriculum, Instruction, and Assessment for the Lancaster Unified School District; middle school principal; and elementary school principal and assistant principal. Prior to taking on an administrative role, Lyons taught language arts and coordinated an after-school program for at-risk students.

Her efforts in Lake Hughes, including the implementation of a Response to Instruction and Intervention program and the creation of a climate of unity, trust, and enthusiasm among staff members helped the school to earn a California Distinguished School Award.

In addition to her experience in public education, Ms. Lyon has also been a journalist in Northern California.

“I’m thrilled to welcome Sandy Lyon to our School District,” said Ben Allen, board vice president. “We had a very strong pool of candidates, but were so impressed by Sandy’s combination of experience, leadership, warmth, and vision. Everyone who knows Sandy sings her praises, and I know that she’ll make an exceptional Superintendent for our District.”

SMMUSD’s current superintendent, Tim Cuneo, has been with the district since July 2008 and will retire in June 2011. To learn more about the selection process for the new superintendent, please visit smmusd.org/board/SuperintendentSearch.html.

This report was based on a release from the Santa Monica-Malibu Unified School District.

Increased scrutiny of how lenders foreclose on Americans has dragged the repossession process out to unprecedented lengths, driving down the pace at which banks are taking back homes.

Big banks are taking longer not only to push borrowers into foreclosure, but also to move homeowners through each stage of the process than in previous years, according to a report by Irvine-based RealtyTrac.

The extended timelines have meant a reprieve for troubled borrowers. But economists said the delays could hold back a national housing rebound if foreclosures remain a significant part of the market for years to come.

In April, U.S. foreclosure activity fell for the seventh month in a row on a year-over-year basis to the lowest point in more than three years, RealtyTrac said. The sharp April drop was the result of the foreclosure-processing slowdown and not an indication of a housing rebound lifting people out of default, experts said.

“The banks have had to slow down and get more lawyers involved because of all of the fuss over the robo-signing scandal,” said Christopher Thornberg, principal of Beacon Economics, referring to the revelations last year that banks foreclosed on properties using faulty paperwork.

Foreclosure filings— notices of default, scheduled auctions and bank repossessions — dropped 9% in April from March and plunged 34% from April 2010 as 219,258 U.S. properties received new filings in April. The number of bank repossessions fell 5% from the prior month and 25% from April 2010, with lenders taking back 69,532 U.S. properties. In all, 239,795 foreclosure filings were made, with some properties receiving multiple filings.

In California, 55,899 properties received new foreclosure filings, down 7% from the previous month and off 20% from a year earlier. But a 22% jump in home seizures compared with March contributed to keeping the state’s foreclosure rate the third highest in the nation, with 13,741 homes seized. That was still down 19% from April 2010.

One in every 240 California homes received a foreclosure filing in April, RealtyTrac said.

Houston Smith, a Hermosa Beach real estate agent who markets foreclosures for big banks, said that as a result of the paperwork fiasco, he has seen the pace of bank-owned properties released into the market slow significantly.

“[Lenders] are under increased pressure and encouragement to make every effort to do a loan modification, or a short sale, and that has been a dramatic change,” Smith said. “It does not mean that there are fewer properties in trouble.”

New laws have helped drag out the process in many states. Consumer advocates and attorneys also are increasingly challenging bank actions in courts and are ramping up their lobbying efforts to push for more mortgage workouts for borrowers in trouble.

“In the end it is really a sideshow,” said Alys Cohen, a staff attorney for the National Consumer Law Center. “The paperwork needs to be proper, but the real question is whether homeowners will get loan modifications when they qualify for them.”

Nationally, foreclosures completed in the first quarter of 2011 took an average of 400 days from start to finish, according to RealtyTrac, an increase from 340 days during the same period in 2010 and more than double the average of 151 days it took to foreclose during the same period in 2007.

The process has even slowed in California, where foreclosures remain largely outside of the court system. In California, the average foreclosure took 330 days in the first quarter, up from 262 days during the same period last year and more than double the average of 134 days during the period in 2007.

In states where a court order is needed to repossess a home, foreclosures are taking even longer.

The average timeframe from start to finish in New Jersey and New York was more than 900 days in the first quarter, more than three times the average in the first quarter of 2007 for both states, according to RealtyTrac.

In Florida, the average foreclosure took 619 days in the first quarter, up from 470 a year earlier and nearly four times the average of 169 during the same period in 2007.

Federal regulators last month ordered the nation’s biggest banks to overhaul their procedures and compensate borrowers injured financially by wrongdoing or negligence. A wider-ranging investigation conducted by a coalition of state attorneys general and other federal agencies is ongoing.

Several states have sought to put their own limitations on how quickly banks can take back homes. Homeowners also appear to be increasingly challenging foreclosures, particularly in states where a court order is required.

States with a judicial foreclosure process registered a 3% decrease in overall foreclosure activity from March, but a 47% plunge from April 2010. States with a non-judicial foreclosure process posted an 11% month-over-month decrease and a 26% year-over-year decrease.

Some economists are concerned that a slower foreclosure process will mean that the housing recovery will take longer to get going. Foreclosures tend to sell at a discount, and, when making up the bulk of sales in a market, give the perception that prices are falling. In addition, residential builders are struggling to compete with foreclosed homes. Home building has typically been an important boost to an economy exiting recession.

“Clearing this stuff out and getting this stuff over with is just essential, and so in the long run the faster these things can be resolved now, the better,” said Richard Green, director of USC’s Lusk Center for Real Estate. “That is the only point at which the market can resume normalcy.”

But Kurt Eggert, a professor at Chapman University School of Law, said that much of the slowdown in California and other states has been intentional by banks that do not want to see another steep drop in prices. Fewer foreclosures and more mortgage modifications would be a good thing, he said.

“If servicers foreclosed as quickly as they could, and they dumped all the properties on the market, you could get a downward spiral,” Eggert said. “As that happens, more and more borrowers go underwater and you could have a vicious cycle — just like the housing boom was fed by the perception that prices always go up, you could have a housing slump that is fed by the perception that prices always go down.”

alejandro.lazo@latimes.com

The Charlotte, N.C.-based bank has been clobbered by losses on high-risk home loans inherited when it acquired Countrywide Financial Corp. in 2008. It planned to announce its latest effort to deal with that problem at 6 a.m. PDT Thursday.

BofA already has 12 such centers nationally, including Southern California outreach offices in Brea and Glendale.

The bank said that over the next two or three months it would open 28 more, including one to serve South Los Angeles and the South Bay, one for the west San Fernando Valley and east Ventura County, one in the Antelope Valley, one in the Inland Empire, and others in San Diego, Bakersfield and Modesto. The exact addresses weren’t available.

Four years after loan modifications sometimes began making financial sense to home lenders as an alternative to foreclosure, BofA remains unable to reach one in four delinquent borrowers, spokesman Rick Simon said.

“One of the most difficult challenges we face is encouraging homeowners who are behind on their payments to respond to our invitations to work with them,” Rebecca Mairone, the executive heading efforts to engage troubled borrowers, said in the news release.

“We have made a commitment to double our outreach staff this year, provide our customers with more ways to contact us and in locations that are as convenient and comfortable for them as possible.”

– E. Scott Reckard

Enjoy passed appetizers + a Border Margarita! Special surprise tastes of one of Mary Sue’s Top Chef Masters dishes. Mary Sue is co-chef/owner of the popular, critically acclaimed Border Grill, serving modern Mexican food in Downtown Los Angeles and Santa Monica, California; Las Vegas at Mandalay Bay Resort & Casino; and on the Border Grill Truck.

Mary Sue is competing for “Share Our Strength”.

SHARE OUR STRENGTH® IS A NATIONAL NONPROFIT THAT IS ENDING CHILDHOOD HUNGER IN AMERICA.

Share Our Strength’s goal is to end childhood hunger in America. Working with others, we believe we can do this by 2015.

It’s not enough to make sure America’s children have enough to eat; we must make sure they are getting the nutrition they need to live healthy, active lives.

That is why Share Our Strength’s highest priority is to make sure that every child in America gets the nutritious food he or she needs to learn, grow and thrive. We are doing this by improving the access that families all across the country have to healthy, affordable food and by working at the state and city level. This is our No Kid Hungry strategy, and it has four key components that, together, provide children with the nutritious food they need where they live, learn and play:

Creating public-private partnerships at the state and city level to map out comprehensive, measurable plans to end child hunger in those areas.
Building public awareness about the problem of childhood hunger and solutions to end it.
Investing in communities with grants to organizations whose work improves access to nutritious foods or that educate families about such programs.
Educating children and families about nutritious, affordable eating.

We measure our progress by measuring participation in effective, existing programs that provide nutritious food to children at home (SNAP, or food stamps, WIC, and nutrition education), during school (breakfast and lunch, and through nutrition education) and when school is out (afterschool snacks and summer meals).

For more info, go to www.strength.org.

The still-bleak reading of a seasonally adjusted annual rate of 300,000 sales represented a 21.9% nose dive from March 2010 levels.

However, the level beat a MarketWatch-compiled economist estimate of 290,000, and February’s low reading of 250,000 was revised up to 270,000.

Analysts had attributed February’s weakness in part to winter storms that depressed figures in the East and the Midwest, as well as the expiration of a California tax credit. The data in March bore out that view.

Sales in the Northeast jumped 66.7%, those in the Midwest improved 12.9% and those in the West increased 25.9%, while sales in the South edged 0.6% lower.

By region, sales are 9.1% to 34% worse than the same period last year. The still-high unemployment rate, a glut of cheaper existing homes on the market and the large number of underwater mortgages have all combined to depress the market for new homes.

“Distressed sales continue to rob demand from new-home sales and construction activity,” said Yelena Shulyatyeva, an economist at BNP Paribas.

On a three-month moving average — which reduces the month-to-month variance in the volatile release — sales fell to a 294,000 annual rate from 305,000. The March reading has a margin of error of 21.7%, the Commerce Department said.

The median sales price rose 2.9% to $213,800 from an upwardly revised $207,700 in February, though prices are 4.9% below those from March 2010.

The average sales price fell 3.8% to $246,800, as the number of houses sold in the $400,000-to-$499,000 range dropped to 4% of the total from 9% of February’s total.

At the end of March, 183,000 houses were for sale, representing a supply of 7.3 months at the current sales rate, down from a supply of 8.2 months in February.

Inventories are at the smallest level since 1967 after a “relentless slide,” said David Resler, chief economist of Nomura Securities International.

“This lean supply of unsold homes may give builders some hope … that a pickup in sales will require new construction,” he said.

By Steve Goldstein

Reporting from Washington— Is the Federal Housing Administration losing some of its post-boom, post-bust oomph? Is the Obama administration’s plan to gradually throttle back the FHA’s home mortgage insurance volume already having effects — and if so, what might this mean to you as a buyer? There are definitely signs that something is brewing:

•Total applications for FHA-insured single-family mortgages are down 30% year over year through March, according to the agency’s data. Applications from prospective home purchasers are down 35%. The FHA’s popularity with buyers previously had sustained its high origination volumes.

•The FHA put its second increase in premium charges in six months into effect April 18. Higher premiums mean higher monthly payment requirements for buyers and could have the effect of squeezing some consumers with tight budgets out of the market entirely.

•The private mortgage insurance industry, which competes with the FHA for borrowers who make small down payments, is touting its newly resurgent conventional mortgage products, which may offer significant monthly savings compared with the FHA.

•Some of the agency’s long-standing advocates are wondering aloud whether the administration’s policy tilt toward more private-sector involvement in the mortgage arena may be hurting first-time buyers who can’t bring large cash resources or high credit scores to the table.

“Here you have our last refuge for ordinary people to buy a home, and the government is making it tougher to qualify” by raising insurance premiums, said Mario Yeaman, senior loan officer for Milestone Mortgage in Manhattan Beach.

Brian Chappelle, a principal of Potomac Partners, a mortgage banking industry consulting firm in Washington, D.C., said he worried about the direction the FHA had begun pursuing. “FHA’s role was designed to be the first rung on the homeownership ladder. If you raise fees, increase down payments and lower mortgage limits, it would be a serious impediment for future buyers and the economy.”

Chappelle’s concern about higher down payments stems from the Obama administration’s February “white paper” on housing reform in which policymakers called for higher down payments across the board — including at the FHA. To date, no increases have been proposed by the agency, but some analysts believe that a move to a 5% minimum down payment — up from the current 3.5% — would not be surprising in the months ahead. The FHA’s maximum loan amounts might also drop significantly in October if Congress does not renew the economic recovery law ceilings, which now top out in high-cost areas at $729,750.

Given these developments, how does FHA financing stack up against rivals in the low-down-payment space? Private mortgage insurers have a quick response: They say their lower monthly costs already are winning back some of the business they lost to the FHA during the recession.

For instance, Radian Guaranty Inc., a major home loan insurer, claims that in the wake of the FHA’s premium increases, a low-down-payment conventional mortgage carrying its insurance coverage requires monthly payments 15% lower than FHA-insured mortgages for borrowers with FICO credit scores above 720.

Radian provided this cost-comparison example to illustrate: Say you’ve got a FICO score above 720, and you need a $285,000, 30-year loan with 5% down at a 5% interest rate. The FHA mortgage would cost $1,806 in principal and interest a month. The same loan insured by Radian would cost from $1,530 to $1,753 a month, depending on the type of premium payment plan you chose.

Brien McMahon, chief franchise officer of Radian, said that as a general rule, private insurance on low-down-payment loans would beat the FHA whenever the buyer put down 5% and had a 720 or higher FICO score or put down 10% and had at least a 680 FICO.

So does this mean that all buyers with low down payments should abandon the FHA and switch to conventional loans? Hardly. David Van Waldick of Western Realty Finance in Carlsbad, Calif., said the majority of FHA users couldn’t fit into the private insurers’ high-FICO, strict-underwriting model, so those vaunted savings may be illusory.

The FHA, by contrast, continues to offer much higher and more flexible maximum debt-to-income ratios, far more generous underwriting and lower down payments, and will accept FICO scores that conventional lenders and private insurers won’t touch.

Bottom line: If you’re purchasing a home with a small down payment, check out both the FHA and the private alternative with your loan officer. It’s true that the FHA has just gotten a little more expensive. But it may still have the total package you need to do the deal.

By Kenneth R. Harney

You may have seen reports that the federal government is proposing new mortgage finance rules under which only home purchasers who can afford a minimum 20% down payment on a conventional loan would get a shot at the best interest rates and terms.

That is correct, and it’s deeply sobering news for large numbers of first-time and moderate-income buyers who can’t come up with that much cash or afford to pay higher rates.

But some of the other requirements that federal agencies and the Obama administration are proposing in the same plan have gotten much less attention yet could prove just as troublesome for consumers:

•Strict mandatory debt-to-income limits. Under the proposal, to get the best mortgage rates, you would need to spend no more than 28% of your gross monthly income on housing-related expenses, and you couldn’t have total monthly household debt that exceeds 36% of your income.

There would be no flexibility to go beyond these ceilings, unlike in today’s marketplace, in which Fannie Mae and Freddie Mac consider debt-to-income ratios along with other factors through their electronic underwriting systems. Freddie Mac, for example, has an overall debt-ratio limit of 45% of an applicant’s stable monthly income.

•To refinance your existing mortgage and replace it with one carrying the best interest rate, you’d need no less than a 25% equity stake in your house to qualify. If you sought to take any additional cash out through a refi, you would need 30% equity. Today’s typical requirements for a conventional refi are nowhere near as strict.

•Pristine credit standards. For example, if you were 60 days late on any credit account during the previous 24 months, you would be ineligible for a mortgage at the best terms.

These are all core features of what may be the most sweeping and controversial set of changes in decades for the housing and mortgage markets. The so-called “qualified residential mortgage,” or QRM, proposals were released at the end of March by banking, securities and housing regulators, along with the Department of Housing and Urban Development. The agencies were required by the 2010 financial reform legislation to come up with new standards for low-risk conventional mortgages.

Congress did not specify what a “safe” mortgage should look like but directed the agencies to consider such factors as full documentation of borrower income and assets plus avoidance of toxic features such as negative amortization and balloon payments. Congress was silent on the subject of minimum down payments.

Under the law, loans that do not meet the strict QRM tests will be pushed into a less-favored, higher-cost category: Banks and Wall Street securitizers would need to set aside 5% of loan balances in reserves to cover possible losses from defaults. This extra capital cost inevitably would be passed on to consumers.

Mortgage industry estimates of the interest rate differential between ultra-safe, QRM-qualifying loans and all others range from three-quarters of a percentage point to 3 percentage points. In today’s market, this would mean that mortgages that meet the federal agencies’ stringent new standards might go for 5%. But all others — the vast majority of today’s conventional loans — could cost from just under 6% to 7% and higher.

You can muster only a 10% down payment? Tough. You can’t quite fit into the tight confines of the QRM’s debt-to-income ratio rule? Pay up.

Where and when will this all start hitting the marketplace? The proposals are out for public comment through June 10 and probably won’t be put into effect until mid-2012. The agencies’ proposal, though not the legislation, exempts mortgages sold to Fannie Mae and Freddie Mac from the rule as long as both remain under federal conservatorship — a date uncertain. FHA and VA mortgages would not be subject to QRM either.

Meanwhile, builders, consumer groups, banks, real estate agents and others are readying campaigns to persuade the regulators and the Obama administration to back off some of the provisions. Michael Calhoun, president of the Center for Responsible Lending, argues that if adopted in its current form, the proposal would make it much tougher for modest-income and minority consumers to afford a first home.

Jerry Howard, chief executive of the National Assn. of Home Builders, says the agencies and the administration have strayed far beyond Congress’ intent, and their proposals threaten to wreck any recovery in housing and force millions of Americans to rent rather than to own.

“I think we’re in for a hell of a fight,” he says.

Kenneth R. Harney

To improve their odds, they said they turned to a law firm that said it could possibly cut their mortgage payment in half. They also signed on with a “debt management” company that, according to the Hunts, said it could eliminate their credit card debt.

After making thousands of dollars in payments, the Hunts said, neither business would return their calls or emails, and the couple received no assistance with their mortgage or their plastic.

“I don’t think they ever did anything to help us,” Faith, 47, told me.

With millions of people facing foreclosure, the Hunts’ experience highlights the potential perils of seeking assistance from businesses that claim they can ease your financial obligations.

Some may indeed be legit. But many others will be happy to accept your money and do little if anything to get you off the hook.

The Hunts own a four-bedroom house in the San Gabriel Valley. It’s an investment property that they rent out to tenants. They pay Chase about $1,700 a month on their mortgage.

In late 2009, the couple received a solicitation in the mail from Mesa Law Group in Costa Mesa saying it might be able to reduce their mortgage balance and payments as much as 50%. Intrigued, the Hunts set up an appointment to speak with a representative of the firm.

“We had talked to the bank about refinancing, but it seemed like it would be very hard,” Faith recalled. “But Mesa said they could lower our monthly payment to around $700.”

“They were very confident,” added Gary, 49. “They said it was almost 100% that they could do it.”

It would cost the Hunts $3,500 in legal fees, to be paid in two installments of $1,750. It’s illegal in California for upfront fees to be charged for loan modification assistance. But Mesa said it would tap the cash only as work was completed.

Meanwhile, the couple mentioned that they were carrying about $35,000 in credit card debt. They said the Mesa representative offered to sign them up with a company called National Debt Management Group that supposedly could eliminate their obligations within three years.

The Hunts said they were subsequently instructed by a National Debt Management representative to pay about $500 a month into an escrow account managed by the company that would be used to negotiate with their creditors.

Flash forward to February of this year. By that point, the Hunts said, Chase had turned them down for a loan modification not once, not twice, but three times. They also said about $2,000 was withdrawn from their escrow account, although National Debt Management apparently hadn’t done anything to reduce their credit card debt.

The Hunts asked Mesa Law Group for their money back and said they were thinking about reporting the firm to the State Bar of California for having charged an upfront fee.

In response, a Mesa representative sent an aggressive letter defending the firm’s actions.

“We consider this extortion,” the representative, Denny Lake, wrote. “Your letter is filled with lies and inaccuracies, and Mesa Law Group will aggressively defend ourselves against any false and fraudulent claims.”

He added that the Hunts would be “liable for any legal fees that we may accrue defending ourselves” and that “we will use every resource at our disposal to collect this from you.”

Not long after, the couple decided to contact me.
I did some nosing around and quickly discovered that Mesa Law Group and National Debt Management share the same address in an office building near John Wayne Airport, as well as the same phone number.

When I called the number, the woman who answered said National Debt Management was “a different department” of the law firm.

The Better Business Bureau gives Mesa a grade of F because the firm fails to respond to complaints and because of “grossly misleading” ads.

Paul Petersen, the head of Mesa Law Group, told me he couldn’t comment on the Hunts’ case because the dispute was ongoing.

But he said complaints are all too common from clients who didn’t see the outcome they’d hoped for. “Unfortunately, when people are not approved for a loan modification, they are not happy about it,” Petersen said.

He said Mesa has helped modify about 700 mortgages but that the firm never promises results. “We agree to process the paperwork and put our best effort in,” Petersen said.

He said National Debt Management used to lease space in his office building but is no longer there. He said National Debt Management “is not affiliated with nor is it any part of Mesa Law Group.”

I asked why the two companies share the same phone number. Petersen said this is because calls for both firms are handled by “a central answering service.”

All I know is that a couple of days after I spoke with Petersen, the Hunts said they got a call from someone at National Debt Management saying the company’s owner had decided to fully refund their money.

Petersen said he had recommended to the firm that it give the Hunts back their money.

A spokesman for National Debt Management, Jacob Meier, said the $2,000 deducted from the escrow account had been to cover fees. He said that money, plus other funds paid to the company by the Hunts, would now be returned to settle the matter.

The couple may not be as fortunate with Mesa Law Group.

If they’d taken a closer look at their contract with Mesa, they’d have seen language saying the firm doesn’t guarantee any results. Perhaps a Mesa representative gave the impression that a loan modification would be a slam dunk, but the contract makes no such promise.

Any business can say it will help with a loan modification or reduce your debt, but all it can actually do is serve as an intermediary. You can apply for assistance from your mortgage lender yourself, just as you can try to negotiate new terms with creditors.

Undeterred by Mesa’s threats, the Hunts did lodge a complaint with the State Bar. A spokeswoman for the agency said she couldn’t comment on whether other such complaints have been received or whether Mesa is currently under investigation.

Petersen said he couldn’t comment on what his firm will now do.

Gary Hunt, for one, is ready to wash his hands of the whole thing.

“We’ll write this off to experience and get on with our lives,” he said.

Probably a wise decision.

David Lazarus Los Angeles Times