By Stephen Otto, Attorney at Law on Oct 10, 2007 in Collection Issues, Consumer Protection, Pennsylvania, Mortgages
As I discussed in the September 19th blog entry located on the blog entitled “Consumer Bankruptcy Representation and Developments Affecting the Consumer“, the failure of a Lancaster, Pennsylvania company called Image Masters, Inc. dba Personal Financial Management has endangered the loan status of hundreds of homeowners. Until it filed for chapter 7 bankruptcy protection in September, Personal Financial Management (PFM) had been attempting to profit from a unique investment product called an “Equity Slide/Wrap-Around-Mortgage program”.
Evidently, this program caused PFM to act as a middleman between the consumer and the consumer’s mortgage servicer. Homeowners who participated in the program would pay a “mortgage payment” to PFM in lieu of paying their mortgage servicer. PFM, through an arrangement with the mortgage servicer, would in turn invest the payment. The product was basically like having a stock market account secured by the investor’s residence. It worked well for homeowners until PFM went south, taking with it months of mortgage payments.
Many of PFM’s clients have been unsuccessful in their attempts to gain cooperation from their mortgage lenders. For that reason, State Senator Mike Brubaker of Lancaster County, Pennsylvania is vowing to help. Senator Brubaker plans to write a letter together with several other lawmakers from Berks and Lancaster counties which would comprise a joint plea to the mortgage lenders and servicers.
Source: WGAL, Lancaster PA.