Bad mortgage advice causes big problems for North Bend family



Posted on October 18, 2010 at 10:34 AM

Updated Monday, Oct 18 at 10:34 AM

NORTH BEND, Wash. - Dave and Amanda Richmond spent a decade saving for their North Bend home. Stuck in an adjustable mortgage, they needed to refinance quickly.

"We knew we wanted to stay in the house, and we wanted to be able to secure a 30 year and lock in an interest rate," said Amanda.

They went to a company called Mortgage Relief Servicing Group in Kirkland. They hoped to obtain a loan modification.

Amanda says their brokers were pushy.

"Fast talking car salesman types," she said.

But the Richmonds fell for it, paying the company $2,400. But the banks wouldn't cooperate.

"We could not refinance because our income was a little too high," said Amanda.

Dave and Amanda say they were advised to do something drastic.

"They told us to discontinue the automatic payments or do late payments or skip payments for two months so we could prove a hardship," said Amanda.

And with a hardship, getting a modification would be much easier.

They said they went for that because it made sense.

Dave and Amanda called me, and I learned that mortgage relief servicing group wasn't licensed to provide loans. That's required by state law.
Then there was more bad news. No modification would be on its way for the Richmonds.

"We've lost sleep over the past eight or nine months, it's truly kept us up at night," said Amanda.

And as we left their home the couple received certified letters from their bank. It was a notification of intent to foreclose on their home.

"This was not supposed to happen," said a tearful Amanda.

"The only reason we made those late payments was because we were told to," she said.

After seeing this, my very next stop was the doorstep of Kristopher Quigley, owner of Mortgage Relief Servicing Group. My first question - is this a licensed business?

"It's not a mortgage industry, uh we're not a mortgage office, no," said Quigley.

In July the state asked Quigley to discontinue any activity that requires a license. And he signed a cease and desist document agreeing to stop. So why does he still have clients?

"We're not taking on new clients, we're trying to close out the old clients for them," he said.

When I asked if he should even be doing that he said "I was very clear with DFI that we were going to help our clients and finish them out."

That's not what the state told me. The Department of Financial Institutions says Quigley's business is not authorized to act as a mortgage broker, no matter if cases are current or pending.

As an e-mail shows, as late as August the company was still working on the Richmonds' loan modification. That's a month after Quigley told the state he'd quit the business.

"All I'm doing is trying to close this out," he said.

The Richmonds say they wanted out but Quigley begged them to stay. 

"He kept saying just wait, hear me out, hear me out, we're putting together a class action lawsuit  against the banks, we really want you to be a part of it, just sit tight, listen to me," said Amanda.

Quigley has promised to pay $1,000 to clients who did not get financing. He is also currently in bankruptcy, while continuing to work beyond the scope of the law.

"This never would have happened if we didn't take their advice," said Amanda.

The Richmonds were able to get $1,000 from Quigley. They've been able to catch up and the foreclosure proceedings have stopped.
Quigley maintains his business never told clients not to pay their mortgages.

What's next?  DFI promises to take a hard look at this report and will respond to it tomorrow.