Attorney predicted bad ending

Ford Elsaesser saw the Apply 2 Save Inc. train wreck coming down the track months ago. Now, the Sandpoint attorney has the task of sorting through the debris as trustee in the Coeur d’Alene mortgage-modification company’s bankruptcy.

Apply 2 Save filed for liquidation Tuesday. Elsaesser walked into its former headquarters Thursday to find mail unopened, checks inside.

“They just abandoned the facility,” said Elsaesser, who predicts neither unpaid employees nor unsatisfied clients will recover much of anything when he closes out Apply 2 Save’s books.

Not much of a surprise to Elsaesser, who in December advised The Spokesman-Review reporters that Apply 2 Save’s business model was a surefire disaster. In a letter prompted by my article reporting that the company had “found a promising niche in mortgage loan modification,” Elsaesser said, in effect, nonsense.

“It is not possible for anyone to make money with the concept of “$500 down, $500 upon a successful modification,” he wrote.

For-profit credit counseling in general is a scam, Elsaesser added, suggesting we track Apply 2 Save and another, similar company to see if they defied his expectations.

He was right, of course, as one would expect of the Inland Northwest’s pre-eminent bankruptcy attorney.

Elsaesser says Apply 2 Save might have had potential when it had a couple dozen employees somewhat familiar with the intricacies of mortgage lending. But as the work force exploded to almost 240, diluting what expertise was on board, the operation became a boiler room “preying,” in the words of a state of Idaho lawsuit, on homeowners facing foreclosure.

Elsaesser recommends, as he did months ago, that borrowers do for themselves what Apply 2 Save purported it could do better: work with their lenders, although he concedes the paper trail can be confusing.

Many hopelessly underwater will have to face the fact they paid too much for their homes, he says. They’ve become renters, not equity- holders. Stretching a 15-year loan out 30 years will not change that, he says, nor will a conversion to a fixed-rate loan from an adjustable-rate loan.

If consumers cannot work something out with their lenders, they should seek out a lawyer, file a Chapter 13 bankruptcy that will stay foreclosure, or both. Better either of those courses than pinning their hopes on a mortgage modifier.

Cecilia Glasgow, of Woodhaven, N.Y., tried it both ways, and learned a lesson.

The very pleasant Glasgow says she had refinanced the home she owns with her sister to help pay her daughter’s way through medical school. The monthly payments were a crushing $3,200. Her bank dithered when she sought help there, so she turned to Apply 2 Save.

Glasgow was quoted a fee of $3,000, but got a $595 “special” when she protested.

Apply 2 Save accomplished nothing. Meanwhile, her bank changed heart after she documented her expenses. The payments were cut to $2,400.

“I’m good with my mortgage,” Glasgow says.

Good for her. Too bad for thousands of others, myself included, who did not see it coming.