ROSEVILLE, CA – A well-known mortgage company that offered a money-back guarantee for loan modifications has notified its clients that it is going out of business and will not honor any refunds.

Pro City Mortgage had advertised heavily on Sacramento radio stations and boasted as recently as May about its success in modifying more than 1,200 mortgages.

But in a June 29 letter, clients were told that “the company no longer has the financial capability to continue its operations… at this time, Pro City does not have the money for any refunds.”

“They told us the money was going to be put into a trust,” said Kim Nessinger of Rescue in El Dorado County.

Nessinger and her husband Richard paid Pro City $4,390 in March 2009 to help them modify their first and second mortgages.  The Pro City contract said the money would be deposited in a trust account at Umpqua Bank, and that $1,265 would be refunded if both loans were not modified.

“In trust means it’s our money, not their money,” Nessinger insisted.

Nessinger said Pro City was successful in getting the first mortgage modified, but failed to make progress on the second.

After repeated phone calls, Nessinger went to the company’s office on Douglas Boulevard in person last month to demand the partial refund.  She was told the refund was being processed.  Then she got the letter and contacted News10.

“I think they used my money to pay wages to employees or whatever else they needed it for and so the money’s gone,” Nessinger said.

Even before the latest trouble, Pro City clients complained to News10 about about bad experiences with the company.

“They guaranteed results, but it was bait and switch,” said David Doss of Vacaville, who sought a loan modification through Pro City in March 2009.

Although Doss received a partial refund last summer, he still spent nearly $3,000 for a process that went nowhere.

“It seems like every time I called them, someone else was handling the case,” Doss said.  Doss eventually saved his house by refinancing through the Veterans Administration.

Chelsea Jacobs of Roseville had even stronger words about the nearly $4,000 she paid the company. ”Pro City is a fraud. They told me I qualified for a loan modification when I did not,” she said.

Pro City clients who spoke to News10 said the company had an excellent rating from the Better Business Bureau when they signed their contracts last year.  According to the BBB website, Pro City’s accreditation expired in May and the company now has an “F” rating.

News10 attempted to contact Daniel Florence, Pro City’s broker of record, but the phone call was not returned.  News10 was told to leave the building while attempting to visit in person.

by George Warren, GWarren@news10.net

News10/KXTV

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Tags: loan modifications, Mortgage, Real Estate