MILWAUKEE (WITI) -- How would you like to lower your mortgage payments and save lots of cash each month? Some companies make big promises -- but Contact 6 shows you how some refinance deals turn into a bait and switch.
"They made a tremendous offer, and at first I thought 'too good to be true,'" fraud victim Nerida Cuccia said.
Cuccia happened to be in the market to refinance her mortgage.
Ricardo White, the voice on the phone, said he could offer a 3.25% fixed interest rate the first year, and 5% fixed for the remainder of the loan.
She told White she was interested and also told him his tone made her hesitant.
"You`re so high pressure. You sound a little bit like you`re forcing me into something," Cuccia said.
He quickly apologized and because of the attractive rates, Cuccia decided to proceed with the refinancing.
"People get pulled in by the numbers and then they get -- in the end -- pay a high price," Cuccia said.
"They would misrepresent the terms of the loans to induce the consumers into refinancing. The homeowners unwittingly got a very high adjustable rate mortgage and the fraudsters got a nice commission," U.S. Postal Inspector John Marsh said.
Postal inspectors began tracking the case and found it was a classic bait and switch scam at closing.
"They will have you sign documents that say 2.25% or 3.25% fixed. But that is not true. That is a fraud," Marsh said.
At the same time, they will have you sign more documents for the actual mortgage they plan to submit to banks, with much higher rates.
In Cuccia's case, she was promised 3.25%. In reality, she signed a loan that started at 8% the first year and would go as high as 15%.
"The documents they leave with you in no way shape or form will tell you what the terms of the loan are," Marsh said.
This is done by design, and is at the heart of the scam.
"They don't want you to realize you have been hoodwinked," Marsh said.
"I felt like somebody walked into my house and robbed me blind," Cuccia said.
Postal inspectors say White, along with the ring leader, Gregory Cooper scammed more than 50 victims out of more than $2 million.
"To be able to face Mr. White in court and tell him how I felt nothing could ever, the money, nothing was as important as being able to look at his face once more time and know he was going to jail," Cuccia said.
White was sentenced to nine years in prison and the scam's ring leader, Cooper, is in jail for 17 years and owes more than $2 million in restitution.
If you are in the market to refinance -- always do your homework and reach out to reputable financial institutions. You should never feel pressured to sign papers you cannot read and evaluate at the time of closing.