When Stefanie Plank got the offer of help from Hope Alliance, she thought it was from the Hope Now Alliance, sponsored by the federal government.
So she went ahead and sent $1,500 to Hope Alliance, hoping to get her mortgage modified.
"We were current on our mortgage," she said, "and now we're in foreclosure."
Attorney General Richard Blumenthal warned homeowners not to pay up-front fees to anyone for mortgage modifications. He has demanded refunds for from Hope Alliance in Cheyenne, Wyoming. He's investigating Hope Alliance for alleged deceptive practices.
"Hope Alliance essentially is masquerading as Hope Now and misleading consumers into paying an advance fee when they can least afford it, and then leaving them in foreclosure," Blumenthal said.
Plank and her husband thought they could get better terms last November when they contacted Hope Alliance. Instead, they got thousands of dollars in legal fees and they could lose their home.
"Our lives have been torn apart," she said. "They have access to all of our information - social security, bank statements, because they needed all the financial paperwork. Everything just seemed legitimate. It's just been devastating."
She said Hope Alliance told her to stop paying her mortgage, so she did. Then it filed for bankruptcy for her, protecting her from foreclosure.
She got the bankruptcy status removed but two weeks later, she was served with foreclosure papers.
But before that she got her best friend, Lisa Gilmore, who recently became a single mother, to work with Hope Alliance to try to lower her mortgage payments on her home in East Hartford.
"They told me not to pay my mortgage for the past five months," she said.
The two of them went to the Foreclosure Prevention Workshop in Hartford Saturday, sponsored by the Federal Reserve Bank of Boston.
They met a representative from Hope Now, the government-backed mortgage modification operation, who explained Hope Alliance was not Hope Now.
Rep. Joe Courtney, (D) 2nd District, immediately put them in contact with Attorney General Blumenthal's office.
"The reason I'm here is to let everybody else out there know, please don't fall for something like I did," said Gilmore. "I thought they were going to help me."
