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"He had my account number, he told me everything - that's why I thought it was legit," Johnson said. "I called my mortgage company... and let them know 21st Century had all my information, every bit of it. She said someone is leaking out the information. I was fixing to mess up."
Johnson was saved from taking the bait in what authorities all over the country are calling a scam by Brookhaven notary public Martha Arrington, who called in the middle of the night to raise the red flag and cancel the loan modification. Arrington said she too was contacted by 21st Century and asked to assist Johnson with her paperwork, but she had already received the warning from the National Notary Association.
Arrington said 21st Century instructed her not to leave Johnson's house without the $1,513.86 check and advised her not leave copies of the paperwork. She said notaries across the nation are being contacted to help in the alleged scam, but most easily spot such fishy details - especially considering none of the loan modification paperwork actually requires notarization.
"They're telling you they are going to take this paperwork to another lender to get you cheaper interest rates and lower monthly payments, but because you're paying this fee doesn't guarantee you are going to get a loan modification," Arrington said. "People don't see that."
Scared, broke homeowners looking for help may not notice the fine print, but authorities do.
The list of top cops filing suit against 21st Century Legal Services is impressive, and includes the attorneys general from Indiana and Ohio, with the Florida Attorney General investigating the company and the Wisconsin AG considering a suit. Similarly, the Arkansas Securities Department has issued a cease and desist order against the company.
Informal complaints about 21st Century Legal Services may be found pasted all over the Internet, including a listing at www.ripoffreport.com.
Mike Bates, a mortgage specialist listed in 21st Century's paperwork, said the company has changed ownership and would soon be known as Fidelity National Legal Services. Several members of NNA posted on their group forum that the company often changes names.
Company supervisor Garrett Reed did not immediately return a phone call seeking comment.
Specific action against the company has not been taken in Mississippi, but it could be next in a line of similar loan modification companies coming under fire from the Mississippi Department of Banking and Consumer Finance.
Commissioner of Banking John Allison said his department considers 21st Century and other loan modification companies to be pseudo mortgage companies and under the scrutiny of the state mortgage law. If confronted, he said such companies usually claim exemption from the mortgage law and claim the company is actually a legal firm, but then the group would have to have a nexus to practice law in Mississippi.
"They try to get around it that way, but we distinctly feel they're not following the law," Allison said. "We can get the attorney general involved or the Mississippi Bar Association."
Allison said his department is gathering information on 21st Century.
In the meantime, he said homeowners should stay away from lending or loan modification plans involving up-front fees.
He said the only up-front fee allowed under the state's lending law would be for appraisals, title searches or other "nominal" fees. Anyone approached by a company with such a plan should request proof the company is authorized under the Mississippi Department of Banking and Consumer Finance, he said.
"People asking for up-front fees is certainly a no-no," Allison said. "If someone is having trouble with a loan, they need to talk with their bank, not go through a third party. These things are too good to be true."
